The Hawaii Medical Service Association’s biggest rate increase in 20 years for small businesses has been cut slightly after a review by the state Insurance Division.

There will be an average 12.1 percent increase for its popular Preferred Provider Plan including vision, drug and dental. That’s instead of the average 12.7 percent it had requested. The Insurance Division also cut rates on other plan increases HMSA sought.
Deputy Insurance Commissioner Gordon Ito said the reduction in rates will save HMSA customers $2 million annually off of what had been proposed.
“We questioned some of the trends and they agreed,” said Ito. The rates go into effect for about 11,000 community-rated groups that are primarily small businesses on July 1. The group employs about 103,000 of HMSA’s 703,500 members.
HMSA filed for approval of the increase in April, saying it had been buffeted by costs that were rising faster that premium increases and that it still needed the double-digit percentage increase after trying to control its own costs.
HMSA Executive Vice President Steve Van Ribbink released a statement acknowledging the state’s largest health insurer understood these are difficult times for business owners.
“The last thing we want to do is make things harder,” said Ribbink. “But the fact is that this adjustment is necessary, and it’s good to know that an outside independent party like the state Insurance Division agrees that it is necessary.”