From the April 9, 2004 print edition
Hawaii employers may see lower-cost health options
Kristen Sawada
Hawaii employers may finally see lower-cost options
as health insurers compete for small-business renewals
in July.
Hawaii Medical Service Association is launching a new
health plan to lower premiums for employers, a Nevada-based
health
insurer is opening shop and a rate-regulation law has
forced Kaiser Permanente to lower rate increases for
Hawaii employers.
Businesses, which pay the bulk of premium dues, for years
have had few options to lower costs.
But health insurers are gearing up to attract and retain
more members after proposed rate hikes this year for
nearly 14,000
employers.
HMSA's new plan, which covers 80 percent for most benefits
and has no deductible, lowers premiums by 7 percent for
employers compared to its most prevalent plan and transfers
more of the costs to workers.
HMSA promoted the plan this week to small businesses
at The Pacific Club in downtown Honolulu.
"There's more momentum today than in my 22 years
in this business," said Ken Gilbert, president of
Business Consulting
Resources, with five full-time employees covered by HMSA. "Anything
that begins to stimulate discussion or actions to offer
small businesses alternatives is going to be good."
It is hoped the new plan will push consumers to take
more responsibility for their health and make better
decisions, said
Christine Camp Friedman, principal of Avalon Development & Consulting
and chairwoman-elect of the Chamber of
Commerce of Hawaii.
The state Department of Labor and Industrial Relations
already has approved the new offering, which the Insurance
Division is
reviewing.
Shaking up the market
A new Nevada-based for-profit health insurer wants to
shake up the health-plan market, opening just in time
for small-business
renewals on July 1.
Summerlin Life & Health Insurance Co. is awaiting
approval of its application with the state Insurance
Division.
Summerlin is approximately the size of University Health,
the state's fourth-largest health insurer, and also will
target
Medicaid-Quest members.
It expects to have more than 100,000 combined members
within 24 to 30 months through self-funded employer plans
or union
groups.
For-profit insurers have been reluctant to enter the
Hawaii market because of a 4.5 percent premium tax, which
puts them at a
disadvantage competing with the state's insurers, which
are all not-for-profit and exempt from the tax.
"The more Hawaii gets on the map the more Hawaii
will become exposed as a national market and the more
other insurance
entities are going to continue to look at the market
to compete," Gilbert said.
Meanwhile, the year-old rate-regulation law is forcing
insurers such as Kaiser to lower rates.
The company last week announced it will raise rates 11.7
percent and not appeal the state Insurance Division's
denial of a
larger increase that took effect on Jan. 1.
In March, the Insurance Division rejected Kaiser's 14.5
percent rate hike for 2,000 employer groups, which affects
about
190,000 of its 235,000 members.
Group purchasers and individuals will receive credit
adjustments retroactive to Jan. 1. Kaiser likely will
trim patient-care
operations and administrative areas and said it would
make no guarantees to avoid job cuts.
"The Insurance Division has certainly let everybody
know that we want to try to provide affordable plans
for people and more
options," said Insurance Commissioner J.P. Schmidt.
More options and competition is a positive sign for small
businesses, says Wally Parcels, Bikefactory SportShop
president. But
in order for insurers to maintain and attract loyal customers,
he says, "They have to be fair in their comparisons
of the services
rendered for the premiums paid."
Reach Kristen Sawada at 955-8036 or ksawada@bizjournals.com
Pacific Business News (Honolulu) - April 12, 2004
http://pacific.bizjournals.com/pacific/stories/2004/04/12/story5.html
© 2004 American City Business Journals Inc.
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