The Hawaii Medical Service Association is proposing to increase its rates by an average of 49.1 percent for individual Affordable Care Act health plans in 2016.
HMSA, the state’s largest health insurer, in a statement released Monday said that the rate hike would affect about three percent of its membership. It is necessary to cover “much higher than expected medical costs for these members.”
“At HMSA, we understand the frustration of rising health care costs,” HMSA President and CEO Michael Gold said in the statement. “Our decision to ask for this premium increase was truly difficult.”
HMSA said it explored alternatives for a smaller premium but was determined it necessary to ask for the increase for the following reasons:
– Almost everyone in Hawaii already has health insurance from their employer, Med-QUEST, or Medicare, and “the small number of people left without coverage often had serious health conditions. Many of these previously uninsured people purchased our ACA plans.”
– The plans began in 2014 and are still new. “This is the first time we’ve been able to price these plans using actual claims and health information from these members. We’ve learned many of these members are using substantially more medical services and prescription drugs than we expected. Now we have a much clearer understanding of the true cost of caring for these members.”
– Several thousand members from the Compact of Free Association (COFA), originally on Medicaid, purchased individual ACA health plans from HMSA this year. “These members came to us from the state Med-QUEST program and we’re honored to serve them. However, many of these members have conditions that will likely require intensive medical services and expensive prescription drugs.”
“The ACA has helped thousands of Hawaii residents get health coverage. That’s good for the well-being of our state,” Gold said in the prepared statement. “But it comes with a price that we’re seeing now.”
He continued, “We’re not alone in asking for a large individual ACA plan rate increase. Other health plans around the country are reporting premium requests as high as 51 percent.”
State Insurance Commissioner Gordon Ito said the proposed increase for the individual plan is the highest ever requested by HMSA. He added the request will be closely scrutinized.
“The Insurance Division will actively seek reductions to the proposed request, where possible, to ensure fairness to all parties involved,” Ito said. “If medical expenditures paid out for healthcare services under the ACA individual plan are too high, the division’s ability to drastically reduce this requested increase will be limited.”
