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Premium rate hikes need tough scrutiny


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The cost of health insurance in Hawaii is comparable to that in most other states, but the continuing increases are enough to cast doubts about whether the medical treatment is worth the price. Both of the state's major health insurers again this year are calling for price increases, and the public is entrusting to the state Insurance Division the increasingly important job of keeping premiums at justified rates.

Kaiser Permanente Hawaii has filed a proposal to the state division that it increase premiums for about 162,000 members by an average of 8.8 percent on Jan. 1, following increases of 10.7 percent in 2010 and 12.6 percent this year. Kaiser posted a $2.8 million profit in the second quarter, reversing a $5.1 million year-earlier loss.

Hawaii Medical Service Association wants to raise premiums by an average of 3.6 percent for 84,000 members working at large companies after increasing them by 11.7 percent two years ago and 14.8 percent this year. HMSA posted a $5.8 million profit in the second quarter, reversing a $4.1 million year-earlier loss.

The premium-increase trend is national. While Hawaii was rated recently by the American Medical Association as the nation's fifth-least competitive commercial health insurance market, health care analyst Marilyn Matsunaga said the proposed increases are in line with national trends. That may be so, but that scarcely makes it easier on consumers and employer providers.

The federal health care overhaul allows businesses with fewer than 25 employees and average wages under $50,000 to obtain tax credits of up to 25 percent of their premium costs for two years.

It seems more could be done to make businesses aware of this help to defray costs. A national survey indicates 65 percent of small businesses haven't bothered to determine eligibility. In Hawaii, many small businesses already offer health insurance systems to employees as required by the Hawaii PrePaid Health Care act, and could qualify as well.

When the federal health reform law takes full effect, it will require that nearly all Americans buy insurance or pay a penalty. Medical care for Hawaii's uninsured now is paid by the premiums of the insured. Presumably, that expense will no longer be absorbed by the insured, although that aspect of the bill faces constitutional challenges.

The new law also requires health insurance companies wanting to increase their rates by 10 percent or more to submit their request to state or federal reviewers. Hawaii already has a review system through the Insurance Division.

Federal funds are available under the new law to "improve how states review proposed health insurance rate increases and hold insurance companies accountable for unjustified premium increases," reports the U.S. Department of Health and Human Services. Additional funds are available to states to improve their rate review processes.

"For far too long," Health and Human Services Secretary Kathleen Sebelius said in April, "families and small employers have been at the mercy of insurance rate increases that often put coverage out of their reach."

The federal health care law has been credited with reducing premiums significantly in Maryland, Rhode Island and Oregon. Prior to the new law, insurance companies in some states could raise rates with little scrutiny.

The rate hikes currently proposed by Kaiser and HMSA in Hawaii don't appear to qualify the state Insurance Division for federal help this year — but they would have, in the last two years, when both companies imposed double-digit increases. At the very least, creation of such consumer protections provides a starting point that could be useful in the future, especially if the increase-ceiling were to be lowered.






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HonoluluHawaii wrote:
Kaiser is asking 8.8% and HMSA is asking 3.6%. Something is not right in Denmark. I know. I want a 200% increase in my bank account. Can I have some money?
on November 7,2011 | 01:45AM
Anonymous wrote:
The additional money is needed for donations to selected non-profits...
on November 7,2011 | 02:52PM
Maipono wrote:
Welcome to Obamacare, "you have to pass it, to see what's in it" Nancy Pelosi. All our representatives were in favor of it, including our present Guv Abercrombie, Mazie, Colleen, Inouye, and Akaka. You get what you vote for.
on November 7,2011 | 04:38AM
BarkingEagle wrote:
This is all about the insurance companies, not Obamacare, which doesn't take effect for three more years (2014).
on November 7,2011 | 06:02AM
Maipono wrote:
Unfortunately, it is Obamacare, the health insurance companies see the overbearing regulations in the future and taking advantage of that today. Since they all see what the costs are going to be, they increase premiums and don't get any arguments from their competitors, who are busy raising premiums in response. It is the old "unintended consequences" that we have seen in the past over and over again when you get government involved in what the private sector should handle. Add to all of this a great monopoly that the state government has given our "non-profit" Hawaii based insurance companies, and you have what we see today, ridiculous increases in premiums, lowering of benefits, and more doctors leaving town. Again Hawaii, think before you vote along party lines, it has put us in this predicament.
on November 7,2011 | 08:53AM
kauakea wrote:
Illogical. If the federal health care law is credited with reducing premiums significantly in Maryland, Rhode Island and Oregon, why wouldn't it reduce premiums nationwide? After all, it is a national law and should impact all state equally.
on November 7,2011 | 05:48AM
BarkingEagle wrote:
Get rid of the insurance companies and go to a Medicare for all system. We don't need the expensive middle men. Other countries, especially non-English speaking countries, do well with national health insurance. Insurance companies shouldn't be standing between the patient and the doctor. They're just there to take their pound of flesh and ad nothing but cost to the system.
on November 7,2011 | 06:01AM
LL808 wrote:
Who is this health care analyst Marilyn Matsunaga, who does she work for? She "said the proposed increases are in line with national trends". So what, that doesn't mean anything. The increase rates are paying for what? Exec bonuses, raises for staff, etc.? Who is watching out for us, the tax payers? Not the state as usual... though they are supposed to.
on November 7,2011 | 06:39AM
Maneki_Neko wrote:
The head guys make more than $1 million/year. Paid for by your premiums. But you cannot do anything about it, can you? There is a real asymmetry of power here where the customer is hostage to the vendor.
on November 7,2011 | 07:16AM
Anonymous wrote:
Yep, something is defnitely wrong. Why is it that I got Blue Cross coverage in the State of Washington, that was almost 1/2 to cost of HMSA's plan. Also, ever compared the cost of a sole proprietor plan (non corporation) to a corporate plan with 1 employee. It is just CRAZY!
on November 7,2011 | 07:22AM
CactusKid wrote:
I don't recall the newspaper ever doing an editorial on a local health plan that lost millions of dollars because use of benefits by its members exceeded the money brought in by premiums. Be careful who you focus your anger on.
on November 7,2011 | 07:38AM
dalawyer wrote:
HMSA should be investigated by the Feds! Shouldn't a customer with dual HMSA coverage being paying "zero" out of pocket cost? The primary carrier (yours) picks up the bulk of the medical cost with the secondary carrier (spouses) picking up the remaining balance. My HMSA plan is fully funded by my current employer. Spouse also covers me under her HMSA family plan. Posed this question to HMSA several years ago and they said it doesn't work that way. Yet they collect from both employers! Also, I would figure that the lifetime coverage amount would be double, however, this isn't so! Wonder how many other individuals fall into this catch-22 situation? Seems like HMSA is ripping off the consumers by collecting health premiums without providing the corresponding medical coverage/reimbursements! Sounds like FRAUD to me!
on November 7,2011 | 07:43AM
LemonySnickets wrote:
Better to have Health Insurance than none at all. Paying a few hundred a month plus can save you thousands in costs for a major surgery which can be close to hundred thousand plus. Even in emergency a cut on leg can cost 1300 dollars to fix without Health Insurance. I paid 75 dollars out of my pocket and HMSA paid the rest. I consider this a good deal.
on November 7,2011 | 08:19AM
Kuniarr wrote:
Really?
on November 7,2011 | 09:54AM
LemonySnickets wrote:
Glad you agree, Mrs. Heckler Pundilla.
on November 7,2011 | 01:28PM
LemonySnickets wrote:
Wrong as usual. Really?
on November 9,2011 | 12:25AM
LemonySnickets wrote:
Wrong as usual. Really?
on November 9,2011 | 12:25AM
Kuniarr wrote:
Why the hike if they still have profits?
on November 7,2011 | 09:56AM
LemonySnickets wrote:
"Why the hike if they still have profits" ~ Kuniarr. What kind of broken English is that. "It they still have profits" How do you still have profits?
on November 7,2011 | 11:53AM
LemonySnickets wrote:
(correction) "If they still have profits"
on November 7,2011 | 11:55AM
LemonySnickets wrote:
(correction) "If they still have profits"
on November 7,2011 | 11:55AM
LemonySnickets wrote:
at Kuniarr. Agains SA needs to repeat my comments so you can understand.
on November 7,2011 | 11:56AM
LemonySnickets wrote:
Wrong.
on November 9,2011 | 12:34AM
LemonySnickets wrote:
Wrong.
on November 9,2011 | 12:34AM
stanislous wrote:
How about Tort Reform.... ? Get the lawyers out of the picture and prices would come way down.
on November 7,2011 | 10:18AM
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