Policies to be canceled due to Obamacare will continue at a higher price

The Hawaii Medical Service Association plans to raise rates by an average 7.5 percent for 14,300 individuals who were earlier notified their policies would be canceled at year’s end because they did not meet the minimum requirements of the federal Affordable Care Act.

President Barack Obama reversed his position Nov. 14, allowing individuals to keep health insurance policies for at least one more year even if they did not meet the minimum coverage standards set by the new law.

HMSA will allow the 14,300 individuals with plans ticketed for cancellation to keep their policies, but at a higher price.

The state’s dominant health insurer filed the rate increase request Friday with the state Insurance Division, the approval of which is required before the price hike can take effect. HMSA attributed most — 4.4 percentage points out of 7.5 — of the increase to Obama­care fees and taxes and the rest to an anticipated rise in medical costs.

"As a nonprofit, we ask for rates that will bring in just enough revenue to pay for our members’ care, cover administrative expenses, and meet our state and federal tax obligations," Elisa Yadao, HMSA senior vice president for consumer experience, said in an email.

State Insurance Commissioner Gordon Ito, who was out of the country Monday and couldn’t be reached for comment, earlier this month urged Hawaii’s health insurers to continue their existing plans temporarily. Ito said at the time that reinstating the canceled policies could cause rates to go up.

Between 25,000 and 30,000 Hawaii residents with individual plans and 140,000 people covered by small-business policies were in line to have their medical plans canceled or altered next year.

HMSA’s individual members will have the option of keeping their existing policies or switching to new Affordable Care Act plans, which are required to provide greater benefits under the health reform law, including prescription drug and pediatric vision and dental coverage.

"It’s not a good sign that everybody’s insurance is increasing under this law," said Nuuanu resident Abe Rodriguez, owner of Nueve Salon & Spa in Kakaako, who pays $159 a month for HMSA individual plans for his two young children, in addition to $300 a month for medications that aren’t covered by the policy. "It is an expensive law. I haven’t heard of anybody’s insurance going down under Obama­care."

HMSA was the first Hawaii insurer to agree to extend current health plans for another year for individuals and 8,000 small businesses.

Individual plan members who don’t choose a new Affordable Care Act plan by Dec. 15 will be automatically re-enrolled in their current plan for another year to ensure they don’t lose coverage, HMSA said. Small businesses will be able to re-enroll in their current plan when they renew their policies in 2014.

Meanwhile, Kaiser Permanente Hawaii, the state’s largest health maintenance organization, also has decided to extend existing policies through 2014, said spokes­woman Laura Lott.

"We are going to let people extend, but we are still dealing with all the system changes that need to happen," she said, adding that the HMO hasn’t yet filed new rates.