The state has approved Hawaii’s fifth commercial health insurer, which says it will offer policies for less cost than the statewide average.
Family Health Hawaii, a nonprofit mutual benefit society run by former state Insurance Commissioner J.P. Schmidt, won conditional approval in March to establish a new insurance firm. On Wednesday the state gave the green light to Family Health to beginning coverage Oct. 1.
The average monthly premium for medical coverage for individuals will be $290, said Schmidt, the company’s chief executive officer.
"There are lower rates and higher rates depending upon numerous factors, but I believe that the rates will be the lowest of any health insurer in Hawaii," he said, adding that the statewide average premium here is about $405 a month.
The health plan also will offer dental, drug and vision options, as well as wellness and disease management programs.
Family Health Hawaii contracted two outside parties to handle other business functions. Hawaii-Mainland Administrators LLC will take care of claims administration, and Health Management Network will provide the physicians. Both HMA and HMN were previously owned by IMX Cos., former parent company of defunct Summerlin Life and Health Insurance Co., the last health insurer to open in Hawaii in 2004. Summerlin withdrew from the market in 2010 after failing to gain enough market share in an industry dominated by Hawaii Medical Service Association and Kaiser Permanente Hawaii.
Smaller carriers Hawaii Medical Assurance Association and UHA (University Health Alliance) have managed to find a niche in the market.
Family Health’s entrance into the competitive market comes as the state prepares to launch on Oct. 1 its first health insurance exchange, known as the Hawaii Health Connector, designed to provide individuals and small businesses access to affordable health insurance as part of the federal Patient Protection and Affordable Care Act, also known as Obamacare.
The startup health insurance company has set an ambitious goal to enroll as many as 50,000 members in five years and might eventually consider participating in the exchange, Schmidt said.
"A new company coming in is a good thing … because it provides additional choices and competition for the people of Hawaii which they need," he added.
However, delays in getting final approvals to begin operations has hindered Family Health’s ability to capture a share of the small-business market that renewed health policies in July. The insurer had hoped to begin selling health plans in May.
"July 1 was a period when a lot of plans were either renewed or a new plan was (chosen), so we missed that," Schmidt said. "Since we’ve been delayed for months, those are months we haven’t had revenue coming (in), so it certainly will affect our revenue for this year."
