The state approved Friday a 5.3 percent bump in premiums for 155,000 Kaiser Permanente Hawaii members, the latest of a string of rate hikes for the state’s largest health maintenance organization.

The increase covers 5,200 companies, the bulk of Kaiser’s business, and is the lowest since 2009 when premiums rose 4.9 percent.

The HMO adjusted health policies to reflect higher rates Jan. 1, citing escalating medical costs.

"Rate adjustments are necessary to cover rising costs and continue delivering quality care," said Kaiser spokes­woman Laura Lott, adding that the HMO reinvests 95 percent of premium dollars back into its services. "This rate adjustment is below the national health care cost projection for 2013 because we continually look for new and better ways to deliver high-quality, affordable care."

Premiums also rose to $143 a month from $129 a month at the start of the year for 8,950 seniors in Kaiser’s supplemental Medicare coverage plans and jumped 9.7 percent for about 14,400 individual policyholders.

Up until this month, David Heard, director of marketing for disaster restoration firm Hawaii DKI, was a loyal Kaiser member. But when his portion of the premium rose to more than $100 a month, he decided to switch to another health plan.

"It hasn’t really been a big issue until recently with the recent increases because it was so exorbitant," said Heard, who’s been covered by Kaiser for at least a decade.

For businesses it’s just another expense that cuts into the bottom line.

Tim Lyons, president of the Hawaii Business League, which represents 900 small businesses, said many businesses can’t raise prices accordingly when rates rise because of fierce competition in the market.

"Businesses are trying desperately to find ways to cut costs. Even though the economy’s showing some signs of improvement, there’s been no gangbuster solution," Lyons said. "A lot of businesses would love to increase prices by 5 percent, but they just can’t or they’ll lose the business; one or the other. It seems (insurers) have this carte blanche for increases, and businesses that are paying it are having a difficult time increasing their own prices by even 1 percent."

Mike Tory, owner of Tory’s Roofing and Waterproofing Inc. in Pearl City, said he stopped offering Kaiser’s health plan to his 50 employees because of rising premiums.

"Everything’s getting raised on us: taxes, medical, material costs — that’s another thing we tend to absorb a lot of times," he said. "Especially in this economy, it’s very hard to raise your prices. Sometimes you can’t increase the price like how you want to. It all adds up at the very end, and you can’t keep absorbing that cost. Eventually you’re going to go out of business."

Mark Hollander, president and CEO of Crazy Shirts, added that although premiums continue to climb, health insurance is an essential benefit he must provide his roughly 250 Hawaii workers.

"It certainly affects business, but the health insurance companies are also a business and they have their own costs and own models they need to worry about," he said. "The benefit to our employees far outweighs the cost to our business."