Small isle insurers shun Connector
By Kristen Consillio, The Honolulu Star-Advertiser | |
McClatchy-Tribune Information Services |
The state's two largest insurers -
"So far it's been the Unaffordable Care Act," said
"The passage of the first year has done nothing to encourage us to participate in the future," McCorriston said. "In fact, all reasonable-thinking people would see that
The Connector, which began offering health plans in October, was set up to give consumers one place where they could compare plans from several different companies, with the hope that the competition would drive costs lower. With only two companies offering plans in
HMSA, the state's largest insurer with more than 70 percent of the market, said in April, when it applied for a 12.8 percent rate hike for some of its plans, that 60 percent of the increase was due to added costs related to Obamacare.
"It is an additional administrative expense as well as fees and other costs to get on the Connector for no real benefit," said former state Insurance Commissioner J.P. Schmidt, who is heading
McCorriston said, "The experience of the two largest carriers, HMSA and Kaiser, proved a point. They went all in on the Health Connector, and I think they suffered economically because of it. Quite frankly it's a mystery why HMSA and Kaiser went all in."
As of
The Connector's interim executive director, Tom Matsuda, told lawmakers earlier this year that he didn't anticipate many businesses purchasing coverage on the exchange.
In addition to the low number of businesses using the Connector, the smaller insurers have opted not to join because the Connector allows small-business insurers to sell only the highest-level benefit, the Platinum and Gold plans. Those are the only plans that meet the minimum requirements of
"Since they don't allow (lower-level) Silver and Bronze plans, there's no difference between the Connector and the traditional market," Schmidt said. "It seems to me that the only way to really rescue the Connector and have it provide a significant benefit in
For UHA, Connector-related taxes and fees have added between 2.3 percent to 4 percent to its rates, which rose about 7 percent this year for its 52,500 members.
"Taxes alone are impacting the rates, and that's before the medical trend," said
McCorriston said the state would be better off using the federal exchange rather than the state-based exchange. "That way we could avoid the expense and unnecessary fees that everyone is incurring as a result of the Connector."
Thirty-six states opted to join the federal health insurance exchange rather than set up their own. The Hawaii Connector received
"This whole Health Connector business was a step backwards," McCorriston said. "It does have some elements that are very good. It's just that unfortunately, the nice little stones came with a boulder. The little bit of good came with a lot of bad, so we just got to figure our way through it. Hopefully there will be more reasoned judgments rather than political judgments as to what do to so we can have a system that really works well."
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