Saturday, March 13, 2004

Kaiser rate
hike eased

The state Insurance Division
suggests a rate increase of up
to 11.7 percent, not the 14.5
percent Kaiser had sought

The state Insurance Division has denied Kaiser Permanente's request to raise its premiums by 14.5 percent. Instead, the division has suggested a rate increase in the range of 11.5 percent to 11.7 percent.

The rate increase would be retroactive to Jan. 1.

The state Insurance Commissioner, J.P. Schmidt, was traveling out of state yesterday and could not be reached for comment. Kaiser spokeswoman Alison Russell said the organization has not decided whether it will appeal the decision.

"One option is an appeal and we are considering that," Russell said.

The rate increase would affect 2,000 groups, or about 190,000 people, she said. Kaiser has about 235,000 members. Those not affected by the increase are members enrolled in government programs such as Medicare and Medicaid.

Russell said Kaiser will continue to work with the insurance division about the rate increase, but said anything less than 14.5 percent would have an impact on its program.

"If the rate he suggests prevails, there are going to be a lot of hard decisions in front of us," she said.

Kaiser operates 16 clinics on Oahu, Maui and the Big Island and its Moanalua Medical Center. It recently reported net income of $10.8 million for 2003. The company is in the middle of a $200 million construction and renovation plan to meet growing member demand.

Kaiser competitor Hawaii Medical Service Association also wants to raise its rates, and reported net income of $47 million in 2003. The company asked for a 11.5 percent increase this year for its 11,000 small-employer group customers, but was granted an 9.6 percent increase by the insurance division. That increase for its most popular Preferred Provider Plan takes effect July 1.


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