Hawaii News Kaiser seeks 8.8% increase By Kristen Consillio Nov. 1, 2011 Mahalo for supporting Honolulu Star-Advertiser. Enjoy this free story! Read more Mahalo for reading the Honolulu Star-Advertiser! You're reading a premium story. Read the full story with our Print & Digital Subscription. Subscribe Now Read this story for free: Watch an ad or complete a survey Log In Already a subscriber? Log in now to continue reading this story. Activate Digital Account Print subscriber but without online access? Activate your Digital Account now. Kaiser Permanente Hawaii is seeking to boost premiums for about 162,000 members by an average 8.8 percent on Jan. 1. The largest health maintenance organization in the islands recently filed the proposed increase with the state Insurance Division, which regulates health plan rates. Kaiser said the increase is needed to cover medical costs that are rising because Hawaii’s aging population requires more health care. For the same reason, Kaiser raised rates an average 12.6 percent at the beginning of this year and an average 10.7 percent in 2010. Kaiser also wants to raise rates an average 9.1 percent for about 14,400 individuals renewing in January. "Our rate increases over the past three years have been so exorbitant that we don’t have anyone on Kaiser anymore," said Don Wakeman, owner of Aloha Key, Awards & Gifts, which earlier this year was notified of a 31 percent rate increase. The Kakaako business, which has 25 workers, moved its last employee from the Kaiser plan in May, he said. "If they wanted to get rid of the small groups, they succeeded." Hawaii Teamsters Local 996 President Ron Kozuma said the union moved 1,000 members from Kaiser coverage this year to a self-funded health program because of double-digit rate increases the past few years. Kaiser spokeswoman Laura Lott said Monday the company understands that many businesses in Hawaii are struggling, and as medical costs continue to rise, "rate adjustments are necessary to maintain our facilities and continue to provide quality care to our patients." Insurance Commissioner Gordon Ito said he hasn’t reviewed the filing yet and couldn’t comment. "In the U.S. there’s three things certain in life: death, taxes and insurance rate increases," said health care consultant Paul Tom, president of Benefit Plan Solutions. "In some shape or form you’re going to see an increase. Especially in health care — health care (costs) haven’t abated." Passing on rising health insurance costs to workers is difficult for businesses because of limits built into Hawaii’s Prepaid Health Care Act, which requires an employee’s health premium contribution — not including add-on coverage such as dental, drug and vision — be no more than 1.5 percent of gross wages. "We absorb 98.5 percent of it — we absorb it all. It’s one of the reasons Hawaii’s so expensive for small businesses," Wakeman said. "If I owned this company on the mainland, I wouldn’t even offer health care — I couldn’t afford it." An older population, costs of drugs and medical technology and equipment, as well as increased hospital and physician expenses all add to the cost of doing business, he said. "None of it’s going down. None of it will ever go down, not in my lifetime," Wakeman added. Kaiser’s projected rate increases do not include a group’s use or demographics — including age, sex and family content — which affect the final renewal rate. Kaiser, whose membership totals 229,400, also insures roughly 25,000 members each in Quest, Hawaii’s Medicaid program, and Medicare Advantage. Kaiser ended the second quarter with a $2.8 million profit, matching first-quarter earnings and stemming a year-earlier loss of $5.1 million. Previous Story State sees high-rises jutting from skyline Next Story Students' scores rise but still trail peers'