News Release: Insurance Commissioner Reduces HMSA’s Rate Increase Request

Posted on May 30, 2014 in News Releases

DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
Insurance Division

NEIL ABERCROMBIE
GOVERNOR

KEALII S. LOPEZ
DIRECTOR

GORDON ITO
INSURANCE COMMISSIONER

 

FOR IMMEDIATE RELEASE
May 30, 2014

Insurance Commissioner Reduces HMSA’s Rate Increase Request

HONOLULU – Insurance Commissioner Gordon Ito approved an 8.9 percent rate increase for Hawaii Medical Service Association’s (HMSA) community rated group plans (CRG). Initially, HMSA requested a rate hike of 13.1 percent. The reduction of 4.2 percent saves about $21 million for more than 110,000 consumers and 8,500 small businesses in health care premiums.

Approximately 5 percent of the 2014 rate increase is for medical costs and 4 percent for federal Affordable Care Act (ACA) fees. The new rate increase will be effective July 1, 2014.

“Eligible small businesses should take advantage of ACA tax credits to help offset increasing insurance premiums while the credits are available,” said Ito. “Moving forward we need to aggressively work toward reducing health care costs so premiums do not continue to rise year over year.”

“The Insurance Division has worked toward reducing premium increases while remaining sensitive to the financial solvency of Hawaii’s health insurers. Between 2007 and 2010, CRG rates increased 9.3 percent per year on average. The rate increases significantly declined from 2011 to 2014, when premium increases averaged only 4 percent per year. Even with the addition of ACA fees, we are still seeing slower growth rates for CRG plan premiums compared to prior years.”

CRG Rate Increases Excluding ACA Fees, 2007-2014

Year                     Rate Increase
2007                            7.2 percent
2008                            9.9 percent
2009                            12.5 percent
2010                            7.6 percent
2011                            3.7 percent
2012                            2.6 percent
2013                            4.8 percent
2014                            4.9 percent

In the coming months, the Insurance Division will increase its efforts to educate consumers and businesses on how to address increasing healthcare costs. Even though medical and drug cost increases have slowed, healthcare costs still outpace inflation and wage growth. The addition of ACA fees further impacts the cost of providing health care, which ultimately affects the bottom line of local businesses.

“Let’s Talk SHOP” Forum

The Insurance Division will host “Let’s Talk SHOP,” a forum on the ACA and how it affects small businesses, on Friday, June 6. The insurance commissioner will answer questions business owners, managers and human resource personnel may have regarding their employees’ health insurance options. For more information, visit cca.hawaii.gov/ins or call (808) 586-2790.

The DCCA Insurance Division oversees the Hawaii insurance industry, issues licenses, examines the fiscal condition of Hawaii-based companies, reviews rate and policy filings, and investigates insurance related complaints.

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Media Contact:
Lindsay Chambers
Insurance Division
Multimedia Education Specialist
(808) 587-6735
[email protected]
cca.hawaii.gov