State lets Kaiser, HMSA raise rates [The Honolulu Advertiser]

Dec. 31--Rates will rise by an average of 10.7 percent for most of Kaiser Permanente Hawaii's members under a premium increase approved yesterday by the state Insurance Division.

The state also said it approved an average 11.7 percent increase by the Hawaii Medical Service Association for 17 large employer groups renewing policies in 2010.

The Kaiser rate hike covers 150,000 of its roughly 220,000 members and is expected to take effect as commercial accounts renew agreements next year. Both Kaiser and HMSA have been struggling to keep up with increasing medical and drug costs as well as lower investment returns on their reserves.

Kaiser and HMSA had sought the increases earlier this year because of increasing health care expenses. Under state law, health insurance rates must be approved by the Insurance Division, which has 60 days to act.

"We're pleased that the

insurance commissioner agreed that our rate filing is consistent with the increasing cost to provide health care," said Kaiser spokeswoman Lynn Kenton.

Kaiser had hoped to have the rates approved earlier, but the Insurance Division requested more information after the initial filing, which took more time to analyze. The rates take effect tomorrow.

"We obviously looked at this very closely and asked a lot of questions about it," said state Insurance Commissioner J.P. Schmidt. He said the state had a nationally known actuary review the initial filing and additional information before issuing approval.

"We determined the rates were justified," Schmidt said.

He said the Kaiser increase is made up of an average 9.5 percent increase for groups who were contacted by Kaiser before Oct. 1, and an average 12.3 percent increase for those who were notified after that date.

Schmidt said the state also approved HMSA's hike at the rate it requested.

In addition, he said his division also approved rate increases for about 30,000 people with health insurance through University Health Alliance, or UHA.

Schmidt said there would be an 11.5 percent increase for people under the UHA 3000 plan and a 13 percent rise in rates under the UHA 600 plan.

Reach Greg Wiles at [email protected].

To see more of The Honolulu Advertiser or to subscribe to the newspaper, go to http://www.honoluluadvertiser.com.

Copyright (c) 2009, The Honolulu Advertiser

Distributed by McClatchy-Tribune Information Services.

For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.