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Kaiser seeks 5.3% hike in rates

The increase will affect 150,000 members and 5,000 businesses

By Kristen Consillio

LAST UPDATED: 8:20 a.m. HST, Nov 1, 2012

Kaiser Permanente Hawaii is proposing a 5.3 percent rate increase on Jan. 1 for more than 150,000 members covered by employer-sponsored health plans.

The state's largest health maintenance organization said the rise in premiums — the smallest since 2009 when rates rose 4.9 percent — is driven by escalating medical costs. The increase will affect more than 5,000 businesses.

Earlier this week Kaiser said it will increase premiums next year for its supplemental Medicare coverage.

"We continue to look for greater efficiency, redirecting resources to better meet evolving customer and member needs, and consolidating administrative functions to support standardization and simplification in process," said Kaiser spokes­woman Laura Lott. The company recently laid off 35 employees as part of a reorganization.

At the same time, the HMO is proposing to raise premiums by 9.1 percent for more than 14,000 individuals, according to the state Insurance Division, which regulates health plan rates. Insurance Commissioner Gordon Ito said the division is still reviewing the proposed rate adjustments.

"(Health premiums) are eating everybody alive," said Steve Marlette, president of MC Architects, which has six employees, some of whom are covered by Kaiser. "(Rates) are all going up relatively consistently, seems like every year. At the same time, it appears that they're cutting services, too. They keep tweaking the plans so we're paying a little bit more and getting less service."

Lott said the nonprofit organization's rates "need to cover the costs of providing quality health care to our members and customers."

The company reported a $200,000 loss in the second quarter, its most recent earnings report, reversing gains of $2.8 million in the year-earlier period.

Kaiser's financial problems don't stop there.

The organization also is being sued by the Queen's Medical Center for more than $4 million for allegedly underpaying Queen's for care given to Kaiser members.

Kaiser raised rates for most members by 8.8 percent this year, 12.6 percent last year and 10.7 percent in 2010.

"It's just another one of those things that adds up. Everybody passes it on. You have to, so everything gets a little more expensive," Marlette said. "It never seems to go away. We don't have any option here. You suck it up and hope for the best."

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