| This story has been corrected. See below. |
The state has approved an 8.9 percent rate increase for Hawaii Medical Service Association’s small-business customers.
The rate increase will be effective July 1 and will increase the premiums for 110,000 consumers and 8,500 small businesses, the state Insurance Division said Friday.
Approximately 5 percent of the 2014 rate increase is for medical costs and 4 percent for fees related to the federal Affordable Care Act, also known as Obamacare, the state said.
Insurance Commissioner Gordon Ito said small businesses, defined as companies with fewer than 50 employees, can make use of tax credits offered through the Affordable Care Act.
"Eligible small businesses should take advantage of ACA tax credits to help offset increasing insurance premiums while the credits are available," Ito said. "We need to aggressively work toward reducing health care costs so premiums do not continue to rise year over year."
BY THE NUMBERS
HMSA rate increases for small businesses:
| YEAR |
RATE |
| 2014 |
8.9% |
| 2013 |
6.8% |
| 2012 |
2.6% |
| 2011 |
3.7% |
| 2010 |
7.6% |
| 2009 |
12.5% |
| 2008 |
9.9% |
| 2007 |
7.2% |
Source: State Insurance Division |
Ito said the Insurance Division has worked to reduce premium increases "while remaining sensitive to the financial solvency of Hawaii’s health insurers."
HMSA had requested a rate hike of 13.1 percent, the Insurance Division said. Reducing the increase to 8.9 percent saves about $21 million, the division said in a news release.
Elisa Yadao, HMSA senior vice president of consumer experience, said in a statement, "We know that small business owners are struggling. … That’s why we work so hard to responsibly manage every health care dollar we collect from them."
"While the Insurance Division’s estimate of what it will cost to sustain the health care needs of our members is lower than our prediction, we’re both committed to working together to do what’s best for small businesses in Hawaii," Yadao said.
Last year, HMSA requested an 8.6 percent rate hike, and the state approved a 6.8 percent increase for small-business premiums.
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CORRECTION: State Insurance Commissioner Gordon Ito said small businesses, defined as companies with fewer than 50 employees, can make use of tax credits offered through the Affordable Care Act. A Page B5 article Saturday reported that small businesses were defined as fewer than 200 employees.
