HMSA Looks to Boost Premiums

HMSA recently filed a request with the state Insurance Division to raise premiums for our individual Affordable Care Act health plans for 2016.

“Our request for an average 49.1 percent increase is the highest premium increase we’ve ever asked for. It’ll affect about 3 percent of our membership and will cover the much higher than expected medical costs for these members,” HMSA noted in a letter to members. “At HMSA, we understand the frustration of rising health care costs. We’re a local company that employs more than 1,600 Hawai’i residents. We care about all of our members who are often our family, friends, and our neighbors.”

HMSA says the company explored additional options to find an alternative for a smaller premium but found that the increase was necessary.

In response to HMSA’s request to raise premiums, State Insurance Commissioner Gordon Ito said in statement, “This is the highest premium increase ever requested by HMSA. The requested increase for an average of 49.1 percent for the ACA individual plan will be closely scrutinized.”

Ito continued, “The Insurance Division will actively seek reductions to the proposed request, where possible, to ensure fairness to all parties involved. If medical expenditures paid out for healthcare services under the ACA individual plan are too high, the division’s ability to drastically reduce this requested increase will be limited.”

According to HMSA, reasons for the increase include:

The large number of individuals who are covered by health insurance from their employer, Med-QUEST, or Medicare. Those who are not covered often have serious health conditions. These individuals purchase HMSA ACA plans.

In addition, ACA plans, which began in 2014, are still new. HMSA says this will be the first time that the company can use actual claims and health information from members to price the plans. In some cases, members have used a larger than expected amount of medical services and prescription drugs.

ACA plans were purchased this year by several thousand members from the Compact of Free Association. HMSA says the members came from the state Med-QUEST program and many have conditions that require medical services and expensive prescription drugs.

According to HMSA, the premium increases won’t affect individuals who receive their health plan through their employer, an Akamai Advantage plan, or a pre-ACA health plan.