Kaiser Permanente Hawaii is proposing to raise rates 8.7 percent for 13,000 Obamacare plan members in 2016.
The state’s largest health maintenance organization said the increase is necessary to cover rising medical expenses for individuals covered through the Hawaii Health Connector, the state’s health insurance exchange created by the Affordable Care Act, commonly referred to as Obamacare.
"We have made it a top priority to try and remain affordable for our members," said Kaiser spokeswoman Laura Lott. "We put a lot of time and focus into that over the last couple years. … People need access if we’re going to improve the health of the community."
The news comes a day after the Hawaii Medical Service Association announced an average 49.1 percent rate hike for 20,935 members in Obamacare plans next year.
The state’s largest health insurer said it filed its highest-ever rate request with state regulators because the exchange population is less healthy than expected. The ACA requires insurers to offer coverage to people who previously could not get private health insurance because of pre-existing medical conditions.
HMSA also projected higher medical costs next year for 4,000 members from the Compact of Free Association, who transferred into the insurer’s ACA plans from the state Medicaid program for low-income residents. The COFA migrants from the Federated States of Micronesia, the Republic of the Marshall Islands and the Republic of Palau, who often have high rates of chronic diseases, are expected to increase total claims by 4.5 percent, HMSA said. However, Kaiser said the deadline for COFA migrants to purchase coverage online was April 15 so "they haven’t been members long enough to have impact on this rate."
HMSA and Kaiser are the only two health insurers selling medical plans on the exchange, designed to provide subsidies and tax credits to lower the cost of coverage for qualified individuals and small businesses.
"The people who are not getting subsidies are going to have to bear the full brunt of the increases and this is happening all over the country," said Jeff Kissel, the Connector’s executive director.
Both HMSA and Kaiser also blame Obamacare for losses in the first quarter.
In its first-quarter earnings, HMSA estimated more than $62 million in premiums collected will be used to pay an ACA insurer fee to the U.S. government this year, in addition to $4.9 million in other costsrelatedtothelaw.The ACA fee insurers must pay the government jumped about 40 percent this year, the company said.
The insurer fee, which by law must be recorded at the beginning of the year, was "the primary reason" the plan recorded a loss of $57.2 million in the quarter ended March 31, up from a $30 million shortfall in the year-earlier period, HMSA said.
Kaiser, which is both an insurer and provider, reported $11 million in Obamacare fees and taxes in the quarter and posted a loss of $7.8 million, up from a year earlier deficit of $5.9 million.