HMSA and Kaiser to raise Obamacare rates Jan. 1

Health insurance premiums are rising for Hawaii residents in 2018.

The state approved an average 19.8 percent rate hike for Hawaii Medical Serv­ice Association and a 24.1 percent increase for Kaiser Permanente’s Obamacare health plans.

The Insurance Division, which regulates health plan rates, released Wednesday — the start of open enrollment for policies that begin Jan. 1 — final decisions on premiums that will affect about 34,000 individuals covered by the federal Affordable Care Act. HMSA initially asked the state to approve a 27.1 percent increase, while Kaiser filed for a 25.2 percent hike.

Next year’s rates were affected by higher use of medical services by some of the newly insured population and the “immense uncertainty on the national front regarding the ACA,” including the federal government’s discontinuation of payments to insurers for cost-sharing reduction subsidies, even though health plans are still required to offer those subsidies.

“Kaiser Permanente, along with all other health providers, previously received revenue to cover cost-share reductions from the government. Given the federal decision to cease funding of CSRs, we needed to adjust rates to make up for this deficit,” said spokeswoman Laura Lott. She added that complex administrative requirements, changes in programs and rules, new medical technologies and higher costs of prescription drugs are also factored into the rates.

PREMIUMS were also affected by the possibility that the feds won’t enforce former President Barack Obama’s signature law requiring most Americans to obtain medical coverage or face tax penalties. President Donald Trump and congressional Republicans have been working to repeal and replace Obamacare.

“Earlier this year President Trump made it clear that he intends to stop paying cost-sharing reductions for people with a silver ACA plan,” said Elisa Yadao, HMSA senior vice president. The federal government reimburses insurers for cost-sharing reductions passed to doctors and other providers to reduce costs for people with lower incomes. “Without these payments, HMSA and health plans around the country have had no choice but to significantly increase premiums for many silver plans in 2018.”

HMSA added: “Members have affordable options from HMSA and, in some cases, lower-costing plans when people purchase an ACA plan directly from us. Our priority is to make sure that HMSA members continue to get high-quality health care that fits their budget.”

Consumers may be eligible for federal premium tax credits to help lower monthly payments when purchasing through HealthCare.gov.

“Those who qualify for federal subsidies may find greater value for coverage in 2018,” said Insurance Commissioner Gordon Ito. “It is worth the time to shop and compare plans across the various metal offerings. This year, a gold plan could be more affordable than a silver plan. Bronze plans can be as affordable as $5 to $10 per month depending on your age and income. It’s best to take into consideration more than just monthly premium rates, but also the deductible amounts and out-of-pocket maximums to determine the right plan for your insurance needs.”

FOR INSTANCE, a 40-year-old Honolulu resident with an income of $30,000 could be eligible for premium tax credits that would reduce premiums to $172 in 2018 for the lowest-cost silver plan compared with $437 a month without the subsidies, according to the Kaiser Family Foundation.

“Overall nationally and in Hawaii, for insurers there are double-digit average rate hikes across all plans. There are pretty significant differences by metal level that affects the change people are going to see,” said Rabah Kamal, a policy analyst at the Kaiser Family Foundation. “People who are unsubsidized and not receiving tax credits to help with premiums are generally the ones who will face the brunt of these premiums hikes.”

The state is encouraging consumers to apply for federal subsidies that can be obtained only if buying ACA coverage through HealthCare.gov. Obamacare plans can also be purchased directly through Kaiser and HMSA.