Hawaii Medical Service Association is forging ahead with double-digit rate hikes for 148,000 members renewing health plans next month in the face of an economic recession.

Hawaii's largest health insurer received state approval this week to boost rates on Jan. 1 by an average 18.2 percent for 18,000 individual plan members and by 11.4 percent for about 150 large businesses with 130,000 members.

The Hawaii Insurance Division also approved a 4.9 percent jump for Kaiser Permanente Hawaii's rates - the highest since 2005 - which will affect 6,000 companies and 167,232 members.

“;I'm shocked that the rates are that high,”; Tim Lyons, executive director of Hawaii Business League, said of HMSA's rate increases.

The primary driver for the hike in rates for the high-risk individual plan group is increased utilization in addition to higher fees HMSA is paying hospitals and doctors, according to HMSA spokesman Cliff Cisco.

“;It's the nature of the population; unlike group coverage where an employer provides coverage to all their employees - all the well and sick people mixed together - sometimes people don't seek individual coverage unless they have a health-care problem,”; he said.

For the year, HMSA projects revenue of $41.7 million from its individual plan, though payments to providers is estimated at $42.2 million before administrative expenses, said Steve Van Ribbink, HMSA's chief financial officer.

HMSA had about 705,000 total members at the end of November.

“;We've got a fairly substantial loss ratio on this business and that's why we had to raise the rates,”; he said, adding that HMSA has recorded losses for the individual plan group for at least a decade.

Still, the rate hikes will be hard for both individuals and businesses to swallow in the current environment.

“;No matter whether you're a small or large business, all businesses are having a hard time making ends meet,”; said Lyons, whose organization represents about 1,250 small businesses. “;When you have increasing costs of that magnitude, you have a hard time balancing that when there's not a corresponding increase in income.”;