The state Insurance Division has approved an 8.4 percent rate hike for Hawaii Medical Service Association policies for more than 8,250 individuals.
HMSA, the state’s largest health insurer, originally requested a 19 percent premium increase in September.
The increase is for policies known as transitional "grandmothered" plans, which existed before the Affordable Care Act took effect in January. The policies aren’t compliant with the ACA, also known as Obamacare, which requires greater benefits in new insurance plans that began this year.
"The hard work and in-depth analysis done by our health actuary and division staff resulted in the disapproval of a 19 percent increase, and therefore a savings for individuals of $2.3 million," Insurance Commissioner Gordon Ito said in a press release. "To date, the division will save health plan purchasers $25 million from mid-2014 into 2015."
In response to the ruling, HMSA said in an email, "Unfortunately health care costs continue to rise and we need to raise rates to cover these increases. Rates for some of our individual plan members will go up next year, such as those in our transitional grandmothered plans, and go down for others, like many of those enrolled in our Affordable Care Act plans."
In November 2013, President Barack Obama said states could decide whether to allow existing small-group and individual insurance policies to be extended through 2015.
Separately, HMSA will raise rates an average 3.8 percent for 3,141 members Jan. 1 but is cutting premiums by an average 6.2 percent for 6,527 individuals, previously saying it expects "most of our ACA individual plan members to use fewer health services than last year, leading to a lower average rate."
HMSA, which had 721,135 members at the end of the third quarter, saw profits soar 26-fold from the year-earlier period to $10.4 million.
The insurer said investment gains masked an operating loss of $8.5 million that was largely attributable to $6.3 million in fees and taxes related to Obamacare.
The company also boosted rates for small-business groups by 8.8 percent on July 1 for 110,000 consumers and 8,500 small businesses.
The Insurance Division is reminding consumers interested in signing up or changing health plans for 2015 to do so before open enrollment ends Feb. 15. The division earlier released a health insurance premium comparison guide at cca.hawaii.gov/ins.
Consumers with questions and concerns can contact the division at 586-2790 or insurance@dcca.hawaii.gov.
