Hawaii OKs higher rates for HMSA, Kaiser


HONOLULU — State insurance officials have approved rate increases for Hawaii Medical Service Association and Kaiser Permanente Hawaii health plans that were going to be canceled as President Barack Obama’s health insurance overhaul takes effect.

The state Insurance Division approved increases of 9.2 percent for 11,000 individual plans and 5 percent for 26,300 small business plans administered by Kaiser, the Honolulu Star-Advertiser reported Tuesday.

HMSA will be allowed to increase rates on 14,300 individual plans by 7.5 percent. HMSA increased small business rates 6.8 percent for 118,000 members earlier this year.

Insurers say the increases are necessary to cover higher medical expenses, taxes and fees anticipated under the Affordable Care Act.

Hawaii asked insurers to extend the plans after the Obama administration reversed policy that would have canceled them.

Chief Financial and Services Officer Steve Van Ribbink said in a statement that 4.4 percentage points of the 7.5 percent increase on individual plans will cover costs related to the new law. Van Ribbink said 3.9 percentage points of the small business increase of 6.8 percent are related to the law.

“It’s important to our members and businesses that we only collect enough in premiums to pay for our members’ care, cover administrative expenses and meet our state and federal tax obligations,” he said.

The state is still considering rate filings for UHA, formerly University Health Alliance, and Hawaii Medical Assurance Association.

Tuesday is a deadline for people who want to keep current Kaiser plans to notify the insurer, which will otherwise switch members to plans under the federal overhaul. HMSA is automatically continuing current coverage unless members switched by Dec. 24.

“In many cases, it might actually be cheaper to purchase an ACA 2014 plan that has more benefits rather than staying with their current plan,” Insurance Commissioner Gordon Ito said. “For individuals and small businesses, they may be eligible for subsidies and tax credits, which would substantially reduce their net out-of-pocket cost.”