Thursday, October 18, 2001

Kaiser rates
to go up 8.7%

The HMO's small business
customers will begin paying
more for coverage Jan. 1

By Lyn Danninger

The state's largest health maintenance organization, Kaiser Permanente, will raise insurance premiums for its small business customers by an average of 8.7 percent effective Jan. 1, it said today.

The increase affects about 57,000 Kaiser members, or about 25 percent of the organization's total membership.

In 2002, the average monthly dues for Kaiser's most popular small-group plan will be about $205 for a single and $615 for family membership. The medical plan rate includes drug, dental and vision coverage.

Kaiser officials emphasized the 8.7 percent increase and monthly dues figures are averages. Each employer group will see different increases, either higher or lower.

Last year, Kaiser raised its small business rates by an average of 4 percent. The state's largest health insurer, Hawaii Medical Service Association, raised rates for small businesses in July this year by an average of 9 percent for its most popular preferred provider plan.

Kaiser's larger employer groups, those with more than 100 employees, renew their contracts with the organization throughout the year.

Kaiser President and Regional Manager Bruce Behnke acknowledged that that it has been difficult for the organization to hold down costs and keep plan rates stable in recent years.

"Unfortunately, the rising cost of providing quality health care, combined with our need to continually invest in our medical care program to benefit our members has resulted in the need for this rate adjustment," he said.

Behnke also noted that such things as new technologies, increased regulatory requirements, legislative mandates and needed capital improvements all contribute to increased costs.

Kaiser announced several weeks ago it will invest $200 million in construction and renovation projects at many of its facilities over the next five years.

Behnke noted that the organization also plans to invest in a new electronic medical records system.

"That will enable our medical personnel to have immediate access to our members' records at all times," he said.

Kaiser operates 17 outpatient clinics on Oahu, Maui and the Big Island and contracts with Kauai Medical Group to provide services on Kauai.

The organization has 325 affiliated physicians and 4,000 employees. It counts 225,000 members statewide.

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