Transportation

Between Feb. 23 and Feb. 26, Alaska’s biggest regional airline has laid off 130 of its 400-plus employees.

At this point, the nine communities served by Ravn Alaska can expect fewer flights, though none of its destinations will be eliminated, a company spokesperson said.

The decision was unfortunate and driven by a lack of profitability on certain routes, Ravn Alaska CEO Rob McKinney said through the spokesperson. The privately held company has shared little else about the layoffs and impacts they will have on the rural Alaska communities it serves, or its three Lower 48 destinations under the New Pacific Airlines brand.

Unanswered questions about the future of the Anchorage-based airline abound.

“So everybody’s kind of on pins and needles,” said Alaska travel expert Scott McMurren.

He runs the newsletter Alaska Travelgram and has been following Ravn’s situation closely, including monitoring fares and routes. As of Wednesday, he had yet to see changes in Ravn’s schedules.

Jessica Caplan, a representative of the Ravn branch of the labor union Air Line Pilots Association, International, said in a post on the union website that the layoffs were “shocking and disappointing.”

“Even more surprising: management has not mentioned the layoffs in any communications with us,” Caplan wrote the day after employees were informed. “We are all impacted in some way when a layoff affects our fellow employees, our friends and their families, or us directly.”

She called for more transparency from Ravn management. She wrote that 22 pilots were among the 130 people laid off.

Her web posts were initially public, but are now password-protected for union members. Caplan declined an interview request and referred inquiries to a media contact who did not respond.

McMurren said whatever changes do come will hit Ravn’s rural destinations harder.

“So they have an outsized influence in the markets that they serve because, in addition to, you know, having the most traffic and so forth, they have the biggest planes,” he said. “The Dash 8-100 series seats up to 37 people.”

Smaller communities are otherwise mostly served by nine-seat planes, McMurren said.

“Think about places like St. Paul Island and Dutch Harbor and, you know, the communities that they serve: Cold Bay, Sand Point, St. Mary’s, Unalakleet,” he said. “And particularly St. Paul Island. They’re the only air carrier that flies out there on a scheduled basis.”

Michael Baldwin has lived in St. Paul, a Bering Sea community of about 400, for more than 40 years. He’s the school principal and superintendent, and also has a side gig offering island tours in his side-by-side. It’s an off-the-beaten path destination for birders.

“Yup, it’s the birding,” Baldin said. “We have a lot of birds out here that people pay good money to come see.”

During past airline shakeups, St. Paul has gone without regular service to Anchorage. The workaround, Baldwin said, was to fly to Dutch Harbor or Cold Bay, hope the weather held, then switch airlines to get to Anchorage.

“We really depend on that bigger flight,” he said. “There’s some days that we might have, you know, 15 people trying to get out of here.”

The reduced service can be especially problematic if someone has medical issues they’re trying to take care of, he said. Fewer flights also means fewer birders.

“It’s kind of going through the community, and we’re kind of worried about what’s going to happen, because when you lay people off, the next step is possibly cutting off services to places,” he said. “Whether that same schedule holds, keeps going the same, or they’re gonna change it again, we’re not sure.”

Baldwin just flew back to St. Paul from Anchorage on Tuesday. His original flight was scheduled as the layoffs were happening. The Ravn rep who called him didn’t explain why his flight had to be changed, but he said he assumed it was related.

After federal authorities rejected Alaska’s four-year statewide highway project funding plan earlier this month, the state Department of Transportation is racing to submit revisions by Friday. State officials say they’ve removed or changed high-expense projects in the process, although the exact changes are not yet public.

On Feb. 9, federal agencies responsible for approving the Statewide Transportation Improvement Program or STIP rejected the proposal, which includes more than $5 billion in highway projects across Alaska. The department now has until March 1 to fix the five most serious issues with the plan before resubmitting, and a longer timeline to revise secondary issues.

In a Senate Finance Committee meeting Wednesday morning, Transportation Commissioner Ryan Anderson updated lawmakers on the revision.

Some senators expressed worry about what will happen to the state’s construction industry and anticipated highway projects if the STIP is not approved, or only conditionally approved. Sen. Lyman Hoffman, a Bethel Democrat, pointed out Alaska’s unique position.

“It’s my understanding that we’re the only state that’s been asked for a resubmittal, and I think that’s a drastic step by the federal government,” Hoffman said.

Anderson said some projects were removed from the plan. He wasn’t able to answer questions in committee about what exactly has been removed from the STIP for the revision, and said those changes were still ongoing as of Wednesday morning.

But the Cooper Landing Bypass on the Central Kenai Peninsula, one of the department’s most expensive capital projects, did come up. Although a critical aspect of that project, the Juneau Creek Bridge, has already been funded and is underway, Anderson told Sitka Republican Sen. Bert Stedman in an exchange that future segments of that project will no longer be in the STIP.

“At this point in the STIP, you won’t see any planned expenditures — obligations, I should say — for Cooper Landing between 2024 and 2027,” Anderson said.

He said other projects that will be pulled from the plan include work on the Parks, Richardson, Sterling and Seward Highways, although in most cases, they’ll just be broken up into different segments, not removed entirely.

“So you will see where the projects are still in there, but there’s one phase of it, versus the whole thing,” he said.

A DOT spokesperson said the department will publicly release the full list of removed projects once the revised STIP is finalized, within a few days.

After the March 1 deadline, Anderson said, the department will focus on second-tier issues over the next six months, including more coordination with local transportation groups in Anchorage, Fairbanks and the Mat-Su.

“I mean yeah, we’re gonna get there,” he said. “It’s gonna take some resources.”

Anderson described difficulties with moving to a digital public comment system for the STIP, the challenges of high inflation and new rules about what should and shouldn’t be listed in the plan. He said the state is committed to not ending up in this situation again, and is looking at a “rolling STIP” model employed by other states, which would allow the department to perpetually update its STIP rather than create a new one every four year.

Anderson described the department’s progress on the revision as being at 90%, in advance of the Friday deadline for resubmission.

After DOT submits its revised STIP, federal transportation officials have 30 days to approve or respond to it.

Debra Prichard was a retired factory worker who was careful with her money, including what she spent on medical care, said her daughter, Alicia Wieberg. “She was the kind of person who didn’t go to the doctor for anything.”

That ended last year, when the rural Tennessee resident suffered a devastating stroke and several aneurysms. She twice was rushed from her local hospital to Vanderbilt University Medical Center in Nashville, 79 miles away, where she was treated by brain specialists. She died Oct. 31 at age 70.

One of Prichard’s trips to the Nashville hospital was via helicopter ambulance. Wieberg said she had heard such flights could be pricey, but she didn’t realize how extraordinary the charge would be — or how her mother’s skimping on Medicare coverage could leave the family on the hook.

Then the bill came.

The patient: Debra Prichard, who had Medicare Part A insurance before she died.

Medical service: An air-ambulance flight to Vanderbilt University Medical Center.

Service provider: Med-Trans Corp., a medical transportation service that is part of Global Medical Response, an industry giant backed by private equity investors. The larger company operates in all 50 states and says it has a total of 498 helicopters and airplanes.

Total bill: $81,739.40, none of which was covered by insurance.

What gives: Sky-high bills from air ambulance providers have sparked complaints and federal action in recent years.

For patients with private insurance coverage, the 2020 No Surprises Act bars air-ambulance companies from billing people more than they would pay if the service were considered “in-network” with their health insurers. For patients with public coverage, such as Medicare or Medicaid, the government sets payment rates at much lower levels than the companies charge.

But Prichard had opted out of the portion of Medicare that covers ambulance services.

That meant when the bill arrived less than two weeks after her death, her estate was expected to pay the full air-ambulance fee of nearly $82,000. The main assets are 12 acres of land and her home in Decherd, Tenn., where she lived 48 years and raised two children. The bill for a single helicopter ride could eat up roughly a third of the estate’s value, said Wieberg, who is executor.

The family’s predicament stems from the complicated nature of Medicare coverage.

Prichard was enrolled only in Medicare Part A, which is free to most Americans 65 or older. That section of the federal insurance program covers inpatient care, and it paid most of her hospital bills, her daughter said.

But Prichard declined other Medicare coverage, including Part B, which handles such things as doctor visits, outpatient treatment, and ambulance rides. Her daughter suspects she skipped that coverage to avoid the premiums most recipients pay, which currently are about $175 a month.

Loren Adler, a health economist for the Brookings Institution who studies ambulance bills, estimated the maximum charge that Medicare would have allowed for Prichard’s flight would have been less than $10,000 if she’d signed up for Part B. The patient’s share of that would have been less than $2,000. Her estate might have owed nothing if she’d also purchased supplemental “Medigap” coverage, as many Medicare members do to cover things like co-insurance, he said.

Nicole Michel, a spokesperson for Global Medical Response, the ambulance provider, agreed with Adler’s estimate that Medicare would have limited the charge for the flight to less than $10,000. But she said the federal program’s payment rates don’t cover the cost of providing air ambulance services.

“Our patient advocacy team is actively engaged with Ms. Wieberg’s attorney to determine if there was any other applicable medical coverage on the date of service that we could bill to,” Michel wrote in an email to KFF Health News. “If not, we are fully committed to working with Ms. Wieberg, as we do with all our patients, to find an equitable solution.”

The resolution: In mid-February, Wieberg said the company had not offered to reduce the bill.

Wieberg said she and the attorney handling her mother’s estate both contacted the company, seeking a reduction in the bill. She said she also contacted Medicare officials, filled out a form on the No Surprises Act website, and filed a complaint with Tennessee regulators who oversee ambulance services. She said she was notified Feb. 12 that the company filed a legal claim against the estate for the entire amount.

Wieberg said other health care providers, including ground ambulance services and the Vanderbilt hospital, wound up waiving several thousand dollars in unpaid fees for services they provided to Prichard that are normally covered by Medicare Part B.

But as it stands, Prichard’s estate owes about $81,740 to the air-ambulance company.

The takeaway: People who are eligible for Medicare are encouraged to sign up for Part B, unless they have private health insurance through an employer or spouse.

“If someone with Medicare finds that they are having difficulty paying the Medicare Part B premiums, there are resources available to help compare Medicare coverage choices and learn about options to help pay for Medicare costs,” Meena Seshamani, director of the federal Center for Medicare, said in an email to KFF Health News.

She noted that every state offers free counseling to help people navigate Medicare.

In Tennessee, that counseling is offered by the State Health Insurance Assistance Program. Its director, Lori Galbreath, told KFF Health News she wishes more seniors would discuss their health coverage options with trained counselors like hers.

“Every Medicare recipient’s experience is different,” she said. “We can look at their different situations and give them an unbiased view of what their next best steps could be.”

Counselors advise that many people with modest incomes enroll in a Medicare Savings Program, which can cover their Part B premiums. In 2023, Tennessee residents could qualify for such assistance if they made less than $1,660 monthly as a single person or $2,239 as a married couple. Many people also could obtain help with other out-of-pocket expenses, such as copays for medical services.

Wieberg, who lives in Missouri, has been preparing the family home for sale.

She said the struggle over her mother’s air-ambulance bill makes her wonder why Medicare is split into pieces, with free coverage for inpatient care under Part A, but premiums for coverage of other crucial services under Part B.

“Anybody past the age of 70 is likely going to need both,” she said. “And so why make it a decision of what you can afford or not afford, or what you think you’re going to use or not use?”

KFF Health News, formerly known as Kaiser Health News (KHN), is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — the independent source for health policy research, polling, and journalism.

Emmarie Huetteman of KFF Health News edited the digital story, and Taunya English of KFF Health News edited the audio story. NPR’s Will Stone edited the audio and digital story.

Copyright 2024 KFF Health News. To see more, visit KFF Health News.

Gov. Mike Dunleavy issued 12 executive orders at the beginning of this year’s legislative session. One of those would bring big changes to a board tasked with overseeing Alaska’s ferry system.

Right now, legislative leaders in the Alaska House and Senate have the power to appoint four of the board’s nine members. The executive order would change that — allowing the governor to appoint all nine.

The order didn’t get a formal look from senators until this week, when it came before the Senate Transportation Committee. It’s scheduled for public testimony tomorrow at 1:30 p.m.

Alaska Public Media state government reporter Eric Stone spoke to KTOO’s Katie Anastas about what the board does and why some lawmakers are skeptical.

LISTEN:

Katie Anastas: So, this executive order is all about the Alaska Marine Highway Operations Board. Let’s start with the basics — what is this board?

Eric Stone: So, it’s a committee made up of nine members. It’s supposed to help the AMHS plot its future course, so to speak. They’re also supposed to give advice on basically how to run the ferry system better. It was created by the Legislature to replace the previous version, the Marine Transportation Advisory Board, which was criticized as ineffective. And there are all kinds of folks on it. There’s a union member, a representative of a tribal group, there’s a deputy transportation commissioner, and then six members who have specific expertise in a variety of areas that are helpful to the Marine Highway System. 

Here’s Sen. James Kaufman. He is an Anchorage Republican, and he was one of the architects of the board:

James Kaufman: We wanted to be sure that, in aggregate, that the board had, not any one person, but when pulled all together, that the board had the technical competencies around enterprise management, quality management, the different things that help.

Eric Stone: And I spoke with Rep. Louise Stutes, the former speaker, in early February about this — she’s a Kodiak Republican and a big ferry system booster  — and she says the board and its structure was the product of consensus:

Louise Stutes: We really took a lot of time and care to work on it. It was a bipartisan, bicameral piece of legislation that passed both bodies unanimously. So it’s a little bit difficult for me to accept redoing the whole board.

Katie Anastas: And so the executive order would allow the governor to appoint all members, and not just a majority of them.

Eric Stone: That’s right.

Katie Anastas: And do we know why the governor wants that change?

Eric Stone: I was wondering that for quite a while, actually. Until this week, all the administration had really said about this publicly is that the executive order made the government more effective and efficient and provided mechanisms for accountability, but they hadn’t really explained how. And we did get something of an explanation from the Department of Transportation on Tuesday. DOT’s Andy Mills works with the board pretty closely. He’s also the legislative liaison for the Department of Transportation. And he told the Senate Transportation Committee that the administration wanted the board to be accountable to the governor:

Andy Mills: How the board appointing power works does create a layer of accountability that may not exist for the board to work with the department and again, my words, my characterization, but sometimes interactions and again, very specific interactions, not the entire board. It’s been more adversarial than advisory, which is unfortunate.

Eric Stone: DOT Commissioner Ryan Anderson says the board isn’t delivering the short- and long-term plans that it’s tasked with crafting, and he compared the board with some of the other boards that have all the members appointed by the governor, like the Roads and Highways Advisory Board.

Ryan Anderson: Alignment is a word that I think of quite a bit when we’re talking about these boards that you know, boards that are aligned that come together, move things forward quickly.

Katie Anastas: And did those ideas ring true for lawmakers?

Eric Stone: Some lawmakers were skeptical. Sen. Kaufman took issue with the idea that it’s the board’s job to come up with short- and long-term plans for the ferry system. Kaufman says the board’s job is to give advice on plans that DOT is supposed to come up with, thus it’s not quite right to say that the board isn’t doing its job. Sen. Jesse Kiehl, he’s a Juneau Democrat, big booster of the ferry system. He took issue with the commissioner’s characterization that certain members weren’t aligned with one another. He said in past years, he’s seen marine highway leadership pretty well aligned…   

Jesse Kiehl: …making tens or hundreds of millions of dollars of decisions, sometimes in ways that have turned out to be inefficient, sometimes in ways that have turned out to be failures. Quickly achieving alignment may or may not be in the best interest of the system at all.

Eric Stone: So Anderson, the DOT commissioner, he emphasized later in the meeting that two of the members that are appointed by the Legislature — who happen to be the chair and vice chair of this board — would not necessarily be replaced if this order takes effect. But, of course, all the members would serve at the pleasure of the governor, and that means that they could be replaced at any time.

Katie Anastas: Okay, got it. So what comes next?

Eric Stone: So, the Senate Transportation Committee will hear some public testimony, and then they’ll likely move it out of committee to the Senate floor. From there, the path is a bit murkier. The Legislature has until mid-March to take a joint session vote on disapproving the governor’s executive orders, and that would prevent them from taking effect. But the House has to invite the Senate into joint session for that to happen, and all this objection we’ve been hearing has been on the Senate side. Last we heard, the House was open to a joint session, but they hadn’t quite worked out the details of how that would work. And even if they do come into joint session, it’s no guarantee they’ll wind up voting the orders down. So you’ll just have to stay tuned.

Katie Anastas: Alright. That was Alaska Public Media’s Eric Stone. Eric, thanks for being here.

Eric Stone: Thanks for having me.

On Valentine’s Day, the new cruise dock float was scheduled to be delivered to Skagway’s Ore Dock redevelopment project. Measuring 500-by-50 feet, the float traveled from Anacortes, Washington. But disaster struck near Ketchikan when the float broke into three pieces.

Skagway’s assembly chamber was more crowded than usual at the Feb. 15 meeting and double the number of people watched on Facebook, as news broke that day of the cruise dock float mishap. Traveling from the manufacturer, Transpac Marinas Inc. in Anacortes, the crucial piece of infrastructure for the Ore Dock Redevelopment Project suffered damage near the end of its journey.

Borough Manager Brad Ryan described what happened.

“The barge was being held in the Ketchikan area, doing circles, waiting for the weather to calm down,” Ryan said. “And then it took off Monday morning to come up to Skagway. And sometime shortly after it took off Monday morning, I got a phone call that the dock had broken into two to three pieces and barges out there were wrangling the pieces. It turns out it was three pieces, which left one large intersection and two end pieces.”

According to Ryan, who immediately flew out to survey the damage, barges were able to tow all three pieces back to Ketchikan.

Ryan described the setback as a surprise. He had been following the float’s progress on his phone.

“Very unexpected in the sense we thought they’d made most of the big crossings, the big wider crossings,” said Ryan. “Surely by the time you get to Ketchikan, we were all feeling pretty good about it.”

But Ryan said the float is “fixable.”

“If we can source the metal plate for the new flanges and the pipe, they believe they can get these pieces manufactured and up to Ketchikan and installed in time to still have the dock come into Skagway before that mid-May ship,” Ryan said. “There’s always some caveats to that, you know, supply chain and those kinds of things. But they’re working on that already. And so, we’re working under that timeframe that we think we can still get it on before the first cruise ship.”

It’s not clear how much the dock breakup will cost the municipality. Ryan said the insurance companies are communicating. A special assembly meeting is scheduled for Feb. 22, after press deadline. Part of that meeting will be an executive session.

Mayor Sam Bass said while he is also hopeful Ore Dock will be ready to receive cruise passengers on time this spring, he and all necessary partners “will work to develop alternative options if that becomes necessary.”

Federal officials have rejected Alaska’s proposed multi-year transportation plan, which could disrupt the summer construction season and endanger billions of dollars in federal grants for roads, trails, ferries and bridges.

In a letter dated Feb. 9, the head of the Federal Highway Administration in Alaska said problems uncovered in a “joint and thorough review” made it impossible to approve Alaska’s State Transportation Improvement Program, or STIP, a document required by federal law that designates four years’ worth of federally funded construction projects.

It’s an extraordinary action — no other state is facing a similar situation, and most have had their plans approved for weeks, if not months or longer.

Alaska has previously submitted plans without incident, and the issues identified by the Federal Highway Administration aren’t minor: An attachment to the FHWA letter listed 24 pages of problems with Alaska’s latest plan.

Some of the issues appear similar to ones identified in an August hearing conducted by the House Transportation Committee, and in letters submitted by regional planning officials to the Alaska Department of Transportation and Public Facilities, which is in charge of writing the STIP.

Minor issues with the plan may be fixed in amendments, but the FHWA identified several major problems that must be fixed before a March 1 deadline.

Shannon McCarthy, a spokesperson for the Department of Transportation, said some summertime projects will go forward even if the state misses the deadline. Others will not.

“This really does affect our guys’ ability to go to work this summer,” said Joelle Hall, president of the Alaska AFL-CIO.

“This is thousands of jobs, thousands and thousands of jobs,” she said.

The scale of the problem and potential consequences have alarmed state legislators, many of whom only became aware of the issue this week, after political writer Jeff Landfield published a copy of the FHWA rejection online.

The plan currently contains $5.6 billion in projects, and all but $522 million of that figure would come from the federal government — but only if the STIP is approved.

“It isn’t just one area,” said Rep. Louise Stutes, R-Kodiak. “It will affect just about every district. And that has a huge, huge impact.”

Some legislators said they’re reserving judgment until they see how the Department of Transportation addresses the situation.

“I would say it’s concerning, but it shouldn’t be alarming,” said Sen. James Kaufman, R-Anchorage and chair of the Senate Transportation Committee. “I don’t think we’re going to get into the worst-case scenario where we just don’t have a (construction) season.”

Rep. Kevin McCabe, R-Big Lake and the chair of the House Transportation Committee, declined comment through a spokesperson, saying that he’s adjusted the committee’s previously scheduled Thursday meeting to include a briefing on the issue from the DOT commissioner.

Trey Watson, the spokesperson, said McCabe wants to get information directly from the commissioner before commenting.

McCarthy, of DOT, said the agency plans to pull problematic projects from the STIP in order to focus staff time and attention on the problems that must be addressed before approval.

“We anticipate being able to address those corrections and resubmit the STIP by the end of next week, February 23,” she said by email.