Friday, November 17, 2006


Letter writes of steep HMSA premium increase--now that they are unregulated

This letter in today's Honolulu Advertiser may indicate that HMSA is about to unleash predatory rate increases now that their premiums are no longer regulated by the Insurance Commission:

HMSA is raising its rates by 4.9 percent next year for small businesses. I have its Plan 6, which is basic coverage for individuals, and my rate is going up by 24 percent!

In its letter explaining the rate increase, HMSA states that prescription drug costs are escalating. That's odd — my plan doesn't cover prescription drugs. I go to the doctor about 12 times a year due to a medical condition and have done so for several years.

According to the statement from the clinic, HMSA pays about one-third of my rate to the clinic. This means the other two-thirds HMSA collects is for administrative costs and for reserves. Worst of all, HMSA wants to do away with my plan and get me into another plan. Something is not right. I think HMSA should be investigated.

Clinton Abe
HMSA's insurance premiums are no longer regulated because Rep. Bob Herkes replaced a simple bill extending the sunset contained in the original law with complicated language written, he admitted, by the industry (HMSA and Kaiser lobbyists). At the same time, Rep. Herkes was harboring an "intern" in his office who was the executive administrator of HMSA Foundation. The industry-written bill failed to make it, and so the insurance commissioner's ability to regulate premiums died. Or should I say, was killed by an industry-sympathetic legislator?

The House leadership shares responsibility for whatever rate increases small businesses and individuals will have to bear because it refused to allow a hearing for the companion bill and failed to intervene and recommit the conference committee changes so that Herkes' alterations could be repaired.

Insurance rate regulation can be re-established this coming legislative session if the small businesses of the state will join together to protect their profits from being snatched up by their insurance carrier.

Perhaps it's also time to look into whether HMSA is truly a "mutual benefit society" and deserving of the tax relief of a non-profit. It's almost impossible for its membership to influence its board of directors without something like 18,000 signatures (a change from 100, the previous requirement).

Do nothing and we all will pay more and more each year to fill HMSA reserves and pay executive salaries.


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