The state has approved rate hikes for reinstated health plans that were set to be canceled today because they did not meet the requirements of the Affordable Care Act.
The state Insurance Division said Monday that Kaiser Permanente Hawaii would be allowed to boost premiums by an average 9.2 percent for individual plans with 11,000 enrollees and by 5 percent for 26,300 small-business policyholders at their contract renewal dates.
Hawaii Medical Service Association also got the green light to bump up rates by 7.5 percent for 14,300 individuals. HMSA had been cleared earlier this year to increase small-business rates by 6.8 percent effective this past July for 118,000 members.
"We’re just kind of accustomed to everything going up these days," said Lee Anderson, co-owner of Hawaiian Brian’s, which is continuing existing HMSA coverage for 15 employees at the billiards and party venue. "We would probably stay just because we don’t have time to think about it. But if everything continues to go up, how can you survive?"
Both HMSA and Kaiser said the rate adjustments were necessary to cover higher projected medical expenses and taxes and fees related to President Barack Obama’s signature health care law.
Steve Van-Ribbink, HMSA’s chief financial and services officer, said in a statement that 4.4 percentage points of the 7.5 percent increase for individual plans are to cover ACA-related costs. For small-business policies, 3.9 percentage points of the 6.8 percent increase is related to ACA costs.
"It’s important to our members and businesses that we only collect enough in premiums to pay for our members’ care, cover administrative expenses, and meet our state and federal tax obligations," Van Ribbink said.
The state’s largest health insurers notified individual policyholders and small businesses earlier this year that their plans would be discontinued at the end of the year because they did not comply with provisions of the Affordable Care Act. In many cases, these were policies that offered a lower level of coverage for a lower premium.
But Obama reversed the policy that would have forced carriers nationwide to cancel plans that did not meet minimum ACA benefits such as prescription drug and pediatric vision and dental coverage.
"Individuals and small businesses have many choices in 2014. They can continue with their existing plans or they can choose to purchase new ACA 2014 plans that contain 10 essential health benefits," state Insurance Commissioner Gordon Ito said in a statement. "Everyone should shop and compare their current premiums against the new 2014 ACA plans and benefits."
Rate filings for UHA (formerly University Health Alliance) and Hawaii Medical Assurance Association are still pending government approval.
Individuals and small businesses that want to keep their current health policies must notify Kaiser by today, otherwise Kaiser will place them in new ACA plans. HMSA, by contrast, is automatically continuing existing coverage unless members opted to purchase new ACA policies by Dec. 24. Members can still switch plans until open enrollment ends in March.
Consumers also can apply for tax credits to reduce insurance costs if they purchase plans that comply with the Affordable Care Act. To get the tax credits, consumers must buy coverage through the online marketplace known as the Hawaii Health Connector.
The Insurance Division released a premium comparison sheet at cca.hawaii.gov/ins/ to help consumers estimate what their insurance costs would be for an ACA policy.
"In many cases, it might actually be cheaper to purchase an ACA 2014 plan that has more benefits rather than staying with their current plan," Ito added. "For individuals and small businesses, they may be eligible for subsidies and tax credits, which would substantially reduce their net out-of-pocket cost."
