The Hawaii Medical Service Association plans to discontinue its five Medicare Advantage plans for 46,000 seniors on Dec. 31.
The state’s largest health insurer, which covers the bulk of Hawaii’s Medicare population, estimates it lost about $64.1 million last year on its plans — called Akamai Advantage — due to higher-than-expected medical claims as well as lower federal Medicare reimbursements.
In 2015 the company will begin offering four new, higher-premium plans priced at either $70 or $126 per month on Oahu and either $152 or $195 per month on the neighbor islands. HMSA currently has five Akamai Advantage plans with premiums ranging from zero to $91 per month.
"Our new Akamai Advantage plans will have monthly premiums that are higher than our current plans," HMSA spokeswoman Elisa Yadao said in a statement. "We know this will cause a hardship for our Medicare members, so it was difficult and painful for us to make these changes. But we had to do it to be able to continue offering the benefits and services our members expect from HMSA. The new plans will help keep HMSA financially stable so we can continue to serve our Medicare members for years to come."
HMSA said it is not changing its Medicare plans to save money, but to "better reflect the benefit needs and cost of caring for our members," she added. "We don’t want to abandon this important group as some other plans in Hawaii have done once they lost money on their Medicare Advantage plans. We want to be here for our members so they can continue to see their own doctors."
Medicare is the federal health insurance program primarily for people who are 65 or older and provides basic coverage, including hospital stays and doctor visits. Original Medicare can be obtained directly through the federal government.
Medicare Advantage is an alternative to original Medicare and is offered by six Hawaii health insurers contracted by the federal government to provide plans that vary in benefits and price.
UnitedHealthcare, the nation’s largest Medicare provider, announced a year ago it would eliminate certain Medicare Advantage health plans in Hawaii this year for nearly 4,000 members, mostly on the neighbor islands, as a result of rate reductions under President Barack Obama’s Affordable Care Act, sequestration cuts and new insurance premium taxes.
AlohaCare announced last month that it is ending its main Medicare Advantage health insurance plan in 2015, a move that will affect 1,300 senior members, after losses of $18.5 million since 2006.
Declining Medicare reimbursements, which typically do not cover the cost of medical services, have put a strain on health plans and providers both locally and nationally. AlohaCare is paid a flat fee of $8,000 on average per member per year by the Centers for Medicare & Medicaid Services for the Medicare Advantage plan.
"Obviously, the health care of our senior citizens is of utmost importance to all of us," said John McComas, AlohaCare’s chief executive officer. "One of the things that’s clear is that the finances aren’t working for a number of the Medicare Advantage plans. It’s an unusual situation where in two years several of the existing plans have had to pull back because of adverse financial outcomes. We all want stability in our lives, especially for seniors. These changes cause potential instability and uncertainty, so it just creates an extra burden on seniors."
Kaiser Permanente Hawaii said there will be no significant changes to its Medicare Advantage plans.
Ohana Health Plan said it will offer just two plans next year. Humana also will offer two policies in 2015, down from four this year, according to its website.
$70 to $126: New premium range on Oahu
$152 to $195: New premium range on neighbor Islands
$0 to $91: Current premium range
