HMSA Granted Reduced Small Business Rate Increase
State regulators have granted a rate increase to Hawaii’s biggest health insurer, but not as large as was sought.
Hawaii Medical Services Association had asked the state to allow it to increase rates for small businesses – those who employ less than 100 workers – by 8.6%.
Insurance Commissioner Gordon Ito approved a hike of 6.8%. The rate increase will go into effect July 1.
The lower rate will save Hawaii consumers and businesses approximately $10 million, according to a news release from the Insurance Division of the Department of Commerce and Commerce Affairs.
The request involved HMSA’s “community rated group” coverage which includes the Preferred Provider Plan, CompMed Plan, Student Plan 19 and several Health Plan Hawaii plans. Together, they cover more than 118,000 consumers.
“The biggest issue we face with health insurance rates is the increases in health care costs,” Ito said. “Year over year, health care costs have risen on average 6 to 8 percent, far outpacing inflation and wages.”
Factors in the increase include fees associated with the Affordable Care Act, also known as Obamacare, which account for 2% of the increase.
Ito encouraged small businesses to take advantage of the small business tax credit component of the Affordable Care Act.
“Eligible small business owners can receive thousands of dollars in credits for what they contribute to their employees’ premiums,” he said.
Starting in October, the Hawaii Health Connector, which is Hawaii’s online health insurance marketplace created through the ACA, will begin offering alternate insurance plans for individuals and small businesses which is designed to give Hawaii residents more choices, the DCCA said.