More than half a million Hawaii residents in commercial health plans will see an average 6.2 percent rate hike Sunday.
The state Insurance Division estimates that 534,647 people will be affected by rising premiums at the start of the year, including 45,363 individuals who will see the highest average jump at 33.2 percent due to substantial increases for policies under the federal Affordable Care Act, or Obamacare. The state Insurance Division, which regulates health plan rates, approved a 35 percent rate hike for Hawaii Medical Service Association members and a 25.9 percent increase for Kaiser Permanente Hawaii’s Affordable Care Act policies.
An estimated 390,120 members in large-group policies under HMSA, Kaiser, HMAA (Hawaii Medical Assurance Association) and UHA (University Health Alliance) will see an 11.7 percent boost in premiums, while 99,164 people in small groups will see rates climb by 2.8 percent, the division said. Groups might have lower or higher increases from the averages depending on an employer group’s plan and insurer.
“It’s one of those things that seem to never ever go down. There’s always an increase, whether it’s modest or huge,” said Tim Lyons, executive director of the Hawaii Business League, a small-business advocacy group with 900 members statewide. “The health care industry and insurance industry don’t seem to have any shame as far as increasing costs. They’ve got a mandate going (Hawaii’s Prepaid Health Care Act, which requires businesses to provide health insurance to full-time workers), so people have to buy from them. The difficult thing, of course, is that small businesses generally exist because of service and price, and when you have these kind of increases, then it certainly makes them less competitive. They either have to absorb it, or they have to increase their prices. When you increase your prices, you’re slowly losing your edge over some of the big stores.”
Aiea Resident Kelii Lopez, who pays $326 a month for his individual plan under Kaiser, said his premiums will rise to $474 as of Sunday. “It sucks because prices go up but the service is the same,” he said. “Having to pay more has to come out of somewhere. It’s making me consider not keeping the insurance that I want because I can’t afford it.”
The Insurance Division said it lowered the combined average rate hike for individuals, small groups and large businesses to 6.2 percent from 12.3 percent.
“After the Insurance Division’s review, the current total average rate increase was reduced to approximately 6.2 percent, for a savings of more than $13 million. Even with this reduction … these types of increases are not sustainable,” said Insurance Commissioner Gordon Ito. “If these types of rate increases continue, health premiums will double in 10 years as it has done over the last 20 years. The reason is health care costs continue to rise at a rate of 6 percent to 8 percent a year. We must work collectively to address the health care cost drivers and bring down the annual health care cost increases to reduce premium increases.”
HMSA Said it is still determining the average rate hikes for large business groups with about 153,000 members. About 20,000 individuals will be affected by a 35 percent increase for ACA plans, while 12,400 members in small-group plans will see premiums climb 7.5 percent.
“Much of this year’s Affordable Care Act individual plan rate increase is because a small group of people are using significantly more health care services than we expected and the program did not attract enough young, healthy individuals. This has led to a $33 million loss on ACA individual plans over the past two years,” HMSA said. “We’re evolving the way we work to avoid this situation next year and, more importantly, better support these members’ health and well-being. That’s why we’ve assigned dedicated HMSA team members — registered nurses and care coordinators — to work closely with these individuals and their doctors, so they can reach their best health and gain better control over health care costs.”
Meanwhile, HMAA said it has proposed a 24 percent increase for 600 individuals in ACA small-group policies and a 10.3 percent decrease for 16,000 people in non-ACA plans. About 26,000 large-group members will see a 5.8 percent boost in premiums. UHA’s ACA small-group plans will rise 2.9 percent for about 5,300 members and 6.5 percent for about 22,600 people. Large groups covering about 27,100 members will see an average increase of 7.6 percent. The Insurance Division must still approve some of the rates that take effect Sunday.
Kaiser didn’t provide rate adjustments to the Honolulu Star-Advertiser.