Kaiser Permanente Hawaii plans to boost rates by an average 9.2 percent for 11,000 individuals who were earlier notified their health insurance policies would be canceled at year’s end because they did not meet the minimum requirements of the federal Affordable Care Act.
The state’s largest health maintenance organization said it filed the proposed rate hike this week with the Insurance Division to cover higher projected medical expenses next year, costs associated with an aging population and taxes and fees related to the federal Affordable Care Act.
Earlier this week the Hawaii Medical Service Association said it plans to raise rates by an average 7.5 percent for 14,300 individuals in a similar situation.
The rate increases come after President Barack Obama reversed a policy that would have forced insurance companies to cancel plans on Dec. 31 that did not meet minimum coverage standards set by the Affordable Care Act. The minimum standards include benefits such as prescription drug and pediatric vision and dental coverage.
Kaiser and HMSA first informed individual policyholders, whose plans did not meet the minimum, that their policies would be canceled. Now those policyholders will have the option of keeping their plans, but at a higher price.
"Pretty soon we’re going to have to find a second job just to pay for medical insurance," said Aiea resident Kelii Lopez, 37, who pays $370 a month for Kaiser’s individual plan. "You hear that Obamacare is supposed to be better for people, but I’m still trying to figure out which people."
Kaiser said another 2,000 small businesses also will see rate adjustments at their contract renewal date, though the HMO didn’t provide an average increase.
Individuals and small businesses who want to keep their current health policies must notify Kaiser by Dec. 31. Otherwise Kaiser will place them in new Obamacare plans.
"We have taken great care to match our members to new ACA-compliant plans that most closely resemble their existing health plan and there are many more Kaiser Permanente plans from which to choose," Kaiser spokeswoman Laura Lott said in an email. "We believe that the increased coverage and benefits in the new ACA-compliant health plans are good for the community and provide our members with added protection. We hope that individuals and small groups will consider taking advantage of these improvements."
Consumers also can apply for tax credits to reduce health insurance costs if they purchase plans that comply with the Affordable Care Act. To get the tax credits, consumers must apply through the online marketplace known as the Hawaii Health Connector, designed to match low-income residents with subsidized coverage.
Between 25,000 and 30,000 Hawaii residents with individual plans and 140,000 people covered by small-business policies were in line to have their medical plans canceled or altered next year.
