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Saturday, May 20, 2000

Kaiser raising rates
about 4% in January

And HMSA's hike of about 8.5
percent takes effect in July

By Tim Ruel


A double blast of medical-insurance increases has rocked Hawaii's businesses.

"It won't help," said Bette Tatum, state director of the National Federation of Independent Business, referring to Kaiser's and Hawaii Medical Service Association's increases. "Anything hurts."

Yesterday, Kaiser Permanente Hawaii announced it will raise its health insurance premium rates by an average of 4 percent in January, Kaiser's third consecutive hike in three years.


Meanwhile, HMSA -- the state's largest medical insurance company with 625,000 members -- raised its rates last week by an average of 8.5 percent, effective in July.

HMSA said the increase, its second in 12 months, would affect about 10,000 businesses.

Monthly dues for Kaiser's most popular plan, Plan B, will increase $5 to about $145 per month for one person, and $17 to about $435 for a family.

Plan B does not include coverage for drugs, vision or corrective aids, such as pacemakers and crutches. Employers who pay for that coverage will see their rates go up an average of 6.5 percent, Kaiser spokeswoman Jan Kagehiro said yesterday.

Kaiser raised its rates 3 percent last year, and 2 percent the year before, with no increase in 1996 or 1997.

"If we average that out, they're doing very well," said Paul Tom, a health benefits consultant with Benefit Plan Consultants (Hawaii) Inc.

Kaiser's increases in the past few years have been relatively low, reflecting cost-cutting measures, Tom said.

"We are determined to keep our rates stable and predictable," said Bruce Behnke, Kaiser president and regional manager.

Kaiser has 211,000 members in Hawaii, and 16 clinics on Oahu, Maui and the Big Island.

"Everybody knew it was coming," said Tatum. He noted that Hawaii's companies must pay the bulk of insurance for employees, by long-standing state law, and have no choice when it comes to rate increases.

Kaiser President Behnke said rate increases are driven by rising drug costs, new technology, increased use of medical services and other factors.

"We are constantly challenged to strike a balance so that the net cost to the business community and their employees does not fluctuate wildly," Behnke said.

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