Friday, July 17, 2015


Hearing will explore how Hawaii consumers are protected against unfair health insurance rate increases

by Larry Geller

An informational briefing has been called for Thursday, July 23, 2015 by three legislative committees “to brief the above legislative committees on the health insurance rate review process and on the rate increases being requested for individual health plans being offered for health care services covered in 2016.”

This could be an important educational experience for new legislators in particular. Sadly, it’s not unusual at all for only the chairs and almost no one else to attend these briefings. One hopes that as many as possible will attend this hearing.

Health insurance rate regulation has been a particular concern of mine.

Around 2006 Disappeared News protested the loss of the rate regulation law due to actions taken by then House corporate consumer protection chair Bob Herkes. That action was inextricably entwined with the struggle to evict an “embedded lobbyist” from Herke’s office:

Why would Rep. Herkes kill a bill that has such wide popular support? I don't know. I did find out, however, that Rep. Herkes office has been infested with an intern who might know something about this, so I went over there. I asked for Mark Forman, but he was out. Staff did confirm that he works there as an intern, assigned via the Majority Staff Office. Now, isn't Mark Forman, the intern, also the Executive Administrator of HMSA Foundation? He's on their staff list. He's simultaneously embedded in Rep. Herkes office.

[Embedded lobbyists distort democracy in Hawaii, 3/18/2006]

When the term “embedded lobbyist” was adopted from my blog by then Governor Lingle, it instantly jumped to the commercial TV news, and the rest is history. After two complaints to the Ethics Commission, one by me and one by Rep. Bev Harbin, the practice of disguising corporate representatives as “interns” was ended at the Legislature, and a bill to restore insurance rate regulation passed into law the following session.

But a law is only as good as its enforcement. For rate regulation to be effective at protecting the consumer, the Insurance Commissioner needs to carefully review the often outrageous demands of the monopoly insurance carriers for rate increases. The review can be a complicated matter involving actuarial studies. Of course, the insurance companies will high-ball their request because they want to see how much the Insurance Commissioner will slice away. Actually, I’ve forgotten exactly how it works myself—I think the Commissioner just rejects, and the insurer has to come back and justify a lower proposal. So I better attend the hearing myself for a refresher course.

The slicing does depend on who is the Commissioner at the time of the rate request, and how willing that person is to do an investigation. Actuarial work is complicated, done well.

So a hearing on the subject might reveal just how this commissioner plans to proceed, and how well consumers will be protected.

As to seniors covered under HMSA and other Medicare Advantage plans who endured huge and unexpected premium increases this calendar year, I’m told that those rates don’t fall under the Insurance Commissioner’s control. Perhaps this question will come up as part of the briefing.

Hint to legislators: someone may be checking on Thursday to see who shows up.

DATE: Thursday, July 23, 2015
TIME: 9:00 a.m.
PLACE: Conference Room 329
State Capitol
415 South Beretania Street


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