Kaiser to raise
health rates 3%
on Jan. 1

Climbing drug costs, new
technology and people's longevity
are cited for the increase

By Russ Lynch
Star-Bulletin staff

Facing higher costs, Kaiser Permanente Hawaii said today it will increase its health insurance rates an average of 3 percent on Jan. 1.

The boost follows a 2 percent rate hike last year and no increase in either 1996 or 1997.

The rates next year for Kaiser's most popular plan, its Plan B, will be about $140 a month for a single person and about $420 a month for a family of three or more. Kaiser said 78 percent of its 209,000 members subscribe to Plan B.

Rates for Plan A, used by about 16 percent of Kaiser members, will rise to about $119 a month for a single person and $357 for a family.

Neither plan covers drugs, vision or dental care. Plan A is less expensive because members must pay half their laboratory and x-ray costs.

Claudia Schmidt, Kaiser business development director, said that most Hawaii workers buy their health insurance at work and the 3 percent rise is an average since different employers are charged different rates.

How consumers will be affected depends on the share of the premium cost absorbed by their employers, she said.

Hawaii law requires employers to pay a major portion of their workers' health premiums.

Bruce Behnke, Kaiser president and regional manager, said the health plan has been able to keep its rates "stable and predictable" by careful use of its resources despite climbing costs for prescription drugs and new technology.

Health care costs also are driven up by the fact that people are living longer, he said.

Competing Hawaii Medical Service Association raised its small-business premium 8 percent, affecting about 120,000 of HMSA's 600,000 members statewide.