Insurance oversight can't come too soon
Hawaii Medical Service Association's premiums are set to increase in July.
STATE Insurance Commissioner J.P. Schmidt can't say with certainty that the rate increase Hawaii's largest health insurer will impose come July
That's because a law allowing his office to oversee premium rates for the insurance, which the state requires employers to provide workers, lapsed last year after the Legislature fumbled the law's extension.
Though lawmakers corrected their error in the last session, the new measure will not take effect until January if Gov. Linda Lingle signs it, which she should.
The nonprofit Hawaii Medical Service Association will raise rates for its preferred-provider plan an average of 6.6 percent and an average of 5.1 percent for its health maintenance organization plan, affecting 143,000 members and 11,000 small businesses.
HMSA -- announcing the increase as it reported a loss of $687,382 in the first quarter -- predictably said rising costs that plague the health care industry require the boost.
Schmidt told the Star-Bulletin's Dave Segal he could not determine whether the increase was justified since he had no authority to review HMSA's data. Before the law expired, insurers would request an increase and present information to account for the amount, which the commissioner would review and determine equitably.
The process provided some assurances to businesses and employees that their interests were being considered, a necessity in a market with few competitors.
HMSA said the possible return of oversight did not affect the timing nor the level of the increase. Schmidt said he can only assume it is "meant to address the current trend of cost and expenses," but added it "may be anticipating the rate regulation that is to come."
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