State OKs health insurance rates

Health insurance rates for nearly 13,000 individuals will rise Jan. 1, while close to 33,000 people may be pleasantly surprised to see premium decreases.

The state Insurance Division has approved an average 9.2 percent rate hike for 9,600 individuals covered by Kaiser Permanente Hawaii and 3.8 percent increase for 3,141 members with the Hawaii Medical Service Association.

Kaiser also got the green light to drop rates by 2.8 percent for 4,800 small businesses with roughly 26,200 members at the start of the year, while HMSA received approval to cut rates by an average 6.2 percent for 6,527 individuals.

The rates are for medical plans offered on the Hawaii Health Connector, the online insurance marketplace created by the Affordable Care Act, as well as policies outside the exchange.

"The 2015 rates reflect the market adjustment for (the Affordable Care Act)," said Insurance Commissioner Gordon Ito. "It includes decreases for HMSA individual plans and Kaiser small-group plans, which are very uncommon. (Without) the ACA fees of 3 to 4 percent (insurers add to rates), the decreases would have been even larger."

In addition, health plans on the Connector are rated by age rather than utilization, meaning a business with an older workforce would get higher premiums than one with younger employees.

HMSA and Kaiser are the only insurers offering health plans for individuals on the exchange; Kaiser is the only option for small businesses.

"What I am seeing right now is significant success both locally and nationally to keep the rates … of health care down," said Thomas Risse, chief financial officer of Kaiser. "In aggregate, Kaiser is bringing its cost trends down at an industry-leading rate. It is certainly our hope, drive and mission to maintain the highest quality and affordability is one in the same."

Kaiser said it covers approximately 10,000 individuals and more than 700 small business groups with more than 1,000 workers on the exchange. Its total membership is 230,691.

This year Kaiser raised rates 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.

At the time, the company said rate adjustments were necessary to cover higher projected medical expenses and taxes and fees related to President Barack Obama’s signature health care law.

HMSA expects "most of our ACA individual plan members to use fewer health services than last year, leading to a lower average rate," said Steve Van Ribbink, chief financial officer and treasurer of the company, which has 730,745 members. HMSA also raised rates for small business groups by 8.8 percent on July 1 for 110,000 consumers and 8,500 small businesses.