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Biggest Hawaii health carrier seeks 49.1 percent individual rate hike

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Hawaii Medical Service Association (HMSA) says it may increase individual premiums an average of 49.1 percent in 2016.

HMSA is preparing to raise small-group premiums an average of 7.7 percent.

The company has disclosed those proposed major medical premium changes in rate filing extracts available through a Hawaii Insurance Division site that gives users access to a portion of insurers’ rate filings.

See also: View: Sticker shock in preview of Obamacare rate hikes

HMSA had a 50 percent share of Hawaii’s individual market in 2013, the latest year for which complete figures are available, and a 48 percent share of the state’s small-group market, according to data from the Henry J. Kaiser Family Foundation.

The small-group filing would affect plans that had about 3,960 members in 2014 and an average of about $12,700 in written premium per member, according to the filing rate information summary. The plans had about 5,900 members this spring.

The individual filing would affect plans that had about 14,700 enrollees and an average of about $4,700 in written premium per member in 2014. These plans had about 21,000 members this spring.

A review of rate increase filing extracts posted on Monday suggests that, in several large states that use the federal health rate review system operated by the U.S. Department of Health and Human Services (HHS), typical requests for large 2016 rate increases are for increases ranging from about 15 percent to 20 percent.

See also: CMS posts 2016 health rate filings

HHS only puts information for 2016 increase requests for more than 10 percent in the rate review database, and it has left out filing information from some states that run their own rate review programs.

Those limitations mean that users can calculate average and median figures for a state’s big increase requests. Users can’t come up with a state’s overall average or median increase request, because the database excludes requests for rate cuts, requests to hold rates level, and requests to increase rates 10 percent or less.

The median increase request in the large-increase database is for about 18 percent in Florida, which has the most exchange plan enrollees; for 20 percent in Texas; for 28 percent in Pennsylvania; and for 17 percent in North Carolina.

In Hawaii, HMSA says it is asking for such a large increase partly because this is the first time it has had a full year of experience for policies that are fully compliant with the Patient Protection and Affordable Care Act (PPACA) underwriting rules, the PPACA benefit design rules and other PPACA rules that took effect Jan. 1, 2014.

The average cost for covering Hawaii residents on a guaranteed-issue basis “is much higher than anticipated, because there are many more high utilizers than we expected,” HMSA says. 

See also: PPACA three R’s programs: Insurers cry out

That effect was compounded by the government’s last-minute decision to let people with old-law coverage keep their plans, HMSA says. In Hawaii, HMSA says, many healthier people have stayed in the old-law plans.

HMSA also began to insure several thousand people from U.S. territories who had been in Medicaid plans. Many of those people have chronic health problems, HMSA says.

“We will do everything we can to help these members improve their health and take control of their own well-being,” HMSA says.

A leading competitor, a unit of Kaiser Permanente, is asking for an average individual 2016 rate increase of 8.7 percent, for plans that had about 10,000 policy holders, and an average of about $5,700 in written premium per policy holder. 

Gordon Ito, the Hawaii insurance commissioner, says in a statement that he’s not sure what he can do about the increase.

“If medical expenditures paid out for healthcare services under the [PPACA] individual plan are too high, the division’s ability to drastically reduce this requested increase will be limited,” Ito says.

See also: Feds firm up health rate filing calendar