HMSA plans 8.8% rate hike [The Honolulu Star-Advertiser]

Dec. 29--Hawaii Medical Service Association is boosting rates by an average 8.8 percent for 13,000 individuals renewing health insurance policies Tuesday.

The state Insurance Division reduced HMSA's proposed increase from 9.8 percent in a move estimated to reduce costs for the individual group market by $300,000 to $400,000, Insurance Commissioner Gordon Ito said in an email.

"HMSA's rate filing was for 9.8 percent, even at this, HMSA projected a medical loss," Ito said. "The individual market continues to be a challenge with a high volatility of claim expenses and a small pool to spread the risk out. The individual filing was not deemed excessive, but we felt the profit estimate of 7 percent, primarily as a result of investment income, could be reduced to provide a rate relief to the individual group."

HMSA said many factors are contributing to the rate hike, including a rise in medical costs and utilization.

"We are optimistic that our programs, like patient centered medical home program and our pay for quality programs, are slowing the growth of costs and we will continue to invest in programs that provide our members with access to quality care at a reasonable cost," the insurer said in a statement.

But for individuals, particularly sole proprietors and independent contractors, a rise in premiums could have a major effect on their finances.

Monthly premiums will rise by $100 next year for Sabrina Hue Sing, who has been paying for individual coverage with HMSA for the past 15 years.

Her monthly rates are rising to $488, not including a $500 deductible she is required to pay before insurance kicks in, she said.

"The first $500 has to be paid upfront, too -- that's ridiculous," said Hue Sing, a substitute teacher for Kamehameha Schools and the state Department of Education. "Because I own a condo and I rent it, I'm increasing the rent. I'm socking it to my tenants to pay more money, too, so that's the way it works. That's a chain reaction. That's what people do because they have to pay their medical insurance."

Nuuanu residents Abe and Joelle Rodriguez said HMSA's individual rates for their two young children rose nearly 60 percent over the past few years.

"It's been rising significantly like all the time," Joelle said. "Every little bit impacts us. It takes away from other areas of need."

Abe added that while premiums have more than doubled, coverage has remained the same. The couple has been paying $250 a month for one maintenance drug not covered by the plan.

"That's super excessive. The bad part of the HMSA plan is their (rates have) doubled, and they don't even cover anything except basic antibiotics," he said. "I can understand if they increase the rate and we got a better service for it, but we're not."

The state's largest health insurer also is seeking an average 1.2 percent rate increase -- the lowest in more than five years -- for 90 large employers with roughly 78,000 members renewing health plans next year. Rates for large businesses with 100 or more employees are largely determined by the amount of health services used by workers.

The Insurance Division, which regulates health-plan rates, said it has approved a 4.1 percent average rate hike for just 20 large businesses renewing policies next year, after rejecting a 4.9 percent increase proposed by HMSA.

"We question the drug trend. As a result, the filing was amended," Ito said. "The resulting savings is approximately $250,000."

Rates for the remaining large-business groups are still under review, he added.

The division also is reviewing a proposed 5.3 percent premium hike for roughly 5,000 businesses with more than 150,000 members covered by Kaiser Permanente Hawaii, the state's largest health maintenance organization.

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