About 10,000 Hawaii seniors will pay as much as 50 percent more for medical expenses starting Jan. 1 when Kaiser Permanente Hawaii boosts co-payments for doctor visits and other medical services.
The changes put an additional burden on members of Kaiser’s Senior Advantage Medicare plans, most of whom are on fixed incomes and do not have retiree medical benefits from former employers.
But Kaiser is facing higher costs driven in part by a growing elderly population, expensive new technology and pharmaceuticals.
"The rising health care cost trends have resulted in financial losses for Kaiser Permanente Hawaii over the last few years, which in turn threatens our ability to maintain our high level of care and quality," said spokeswoman Laura Lott. "Plan adjustments are necessary to allow us to continue to provide quality care to our patients."
The state’s largest health maintenance organization "works hard to keep costs down and health care affordable for our members," with adjustments to plans and products only as needed, Lott added.
Kaiser will raise co-payments to $15 from $10 per office visit — the first increase in four years — for its Senior Advantage Enhanced HMO plan, which covers roughly 8,600 members. The HMO will increase by the same amount co-pays for X-rays, outpatient hospital visits and in-network urgent care, while decreasing out-of-pocket fees for annual physical exams. Office visit co-payments for another 1,400 seniors in its basic Medicare plan rise to $29 next year from $25 this year.
The increases will be hard on the retirement community, said Makiki resident Roy Kruse, 80, a Kaiser Senior Advantage member.
"Elderly people mostly have a set income that sustains their quality of life," he said.
Holding down costs is particularly challenging for Kaiser when it involves government programs such as Medicare, because private insurers must compensate for reimbursements that do not keep up with increases in medical costs, Lott said.
Some of Kaiser’s employer-sponsored plans increased co-payments for doctor office visits to $15 from $10 in July.
The out-of-pocket hike is not a big deal for many younger, healthier members who see the doctor just a few times a year, according to Kaimuki resident Luana Holi, 40.
"It’s actually a reasonable co-pay" compared with insurers that charge members between 10 percent and 30 percent of the bill, she said. "As far as inflation goes, that’s actually pretty good."
Kaiser, which recorded a $3 million profit in the third quarter, is also seeking to boost premiums 12.6 percent on Jan. 1 — the largest increase in seven years, which would affect about 6,800 employers and 164,000 members. In addition, the HMO is seeking an average 8.6 percent rate increase for about 14,000 individuals.
Kaiser recently notified Senior Advantage plan members that their monthly premiums will rise on Jan. 1 to $129 from $116 this year.
"It wouldn’t be so bad, but everything else is going up along with it," said Kona resident Shirlee Shumway, 82, who fractured her thighbone in June. "I have a budget I try to stick by and keep my savings for emergencies and things that I’m going to need. I have to dip into it all the time because everything goes up."
Generally speaking, as health care costs rise, private insurers are passing on the cost to patients with higher deductibles, co-payments, premiums and co-insurance, according to Bruce Bottorff, AARP Hawaii associate state director.
The impact is worse for seniors, many of whom have chronic conditions that require multiple doctor visits for each ailment.
"These things put a squeeze on people, and making ends meet gets that much harder," Bottorff said. "That’s where co-pays and medical increases really hit hardest."
In fact, 30 percent of Hawaii’s Medicare beneficiaries are living at or near the federal poverty level, according to the American Medical Association.
Many AARP members cite prescription drug and medical costs as two of the most prominent cost issues in their lives, Bottorff said.
"It’s getting to be a struggle because just everything is going up this next year at the same time," said Shumway.
"Maybe I’ll have to get a job, so I’ve got to start walking."