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Friday, May 12, 2000


HMSA raising rates
for small businesses

By Peter Wagner
Star-Bulletin

Tapa

Citing rising drug costs and insurance claims, the Hawaii Medical Service Association said today it is raising rates for small employers by an average of 8.5 percent.

The hike, to take effect July 1, will affect 10,000 companies with fewer than 100 employees _ less than 20 percent of HMSA's total membership.

"Skyrocketing drug costs, higher utilization and expensive diagnostic and treatment technologies continue to drive health care costs upward," said Cliff Cisco, senior vice president at HMSA.

Last week, the association announced net income of $35.9 million for 1999, up more than three times the $10.1 million net for 1998. However, the group also said it had a $17.7 million operating loss for 1999, on revenues of $1.039 billion and expenses $1.056 billion.

The loss was offset by stock market investment gains, according to a company spokesman.

The rate increase is aimed at small employers because claims filed in that group outstrip payments to the association.

A similar review of other subscriber groups could lead to rate increases, or decreases, the spokesman said.

Monthly dues for HMSA's "Preferred Provider Plan," used by more than 70 percent of small employers, will rise 5.2 percent to $168.56 for a single plan and $505.68 for a family plan. Drug, dental and vision coverage on the same plan would increase dues an average of 8.5 percent.

Dues for the association's "Health Plan Hawaii Plus," chosen by about 30 percent of small business subscribers, will go up 10.8 percent to $160.12 single and $480.36 family. Drug, dental and vision benefits under the plan would raise dues by 12.4 percent.

According to Cisco, drug costs increased an average of 19 percent last year while medical costs went up an average of 8 percent from 1998 to 1999.

HMSA, a nonprofit founded in 1938, has 625,000 members.



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