Hawaii: Weighted Avg. 2016 Rate Request: 33.7% (ouch), plus a Mystery Solved...

Thanks once again to Louise Norris for doing the heavy lifting in the Aloha State:

Hawaii Health Connector offers individual plans from two carriers: BCBS’s Hawaii Medical Service Association (HMSA), and Kaiser Permanente.

For 2016, HMSA has proposed a 45.5 percent rate increase for their individual HMO plan, and nearly a 50 percent rate hike for their individual PPO plan (49.1 percent overall). The carrier justified their rate hikes based on claims costs, explaining that while virtually everyone in Hawaii was already insured, the uninsured pool – many of whom purchased new ACA-compliant plans – had significant medical needs.

Ouch. Yup, that's a pretty ugly requested increase, no way around it.

The following day, Kaiser proposed an 8.7 percent rate increase for their individual market policies.

That sounds much more reasonable, though of course I have no idea what the current typical premiums are for either company. For all I know, HMSA way undercharged this year and is only bringing their rates up to the norm, though the description doesn't make that sound too likely.

Louise also, to her immense credit, finally resolved Hawaii's 30,000 Enrollee Mystery which I've written about a good half-dozen times before:

HMSA’s rate increase would apply to about about 21,000 people, while Kaiser’s would apply to about 13,000 people. There have been very conflicting reports about Hawaii Health Connector’s total enrollment over the last year and a half (the executive director’s report from July 10 shows 33,479 individuals enrolled, but HHS was reporting only 8,200 people with effectuated coverage as of March 31).

So I contacted the exchange to clear up the confusion. Executive Director Jeff Kissel explained that the larger number is much more accurate. He said that the discrepancy stemmed from a significant lag time in enrollment reporting from carriers. Kissel confirmed that the Connector’s current in-force enrollment numbers are roughly 20,000 people with HMSA and 11,000 people with Kaiser.

Huh. Um...ok, then. Not that this amounts to much at this point, I suppose, but it also means I can increase the national tally by about 21,000 people (Hawaii's official QHP Selection tally as of 2/21/15 was 12,625). The extra 21K currently effectuated enrollees also adds more support to my estimate of appx. 10.4 million being currently effectuated nationally.

Here's the relevant part of the report she refers to:

I don't really deal with dental-only plans, but the 2,082 SHOP enrollees is handy to know.

This number has more relevance when it comes to weighting the averages:

That accounts for nearly all of the individual enrollments that are slated to be impacted by the proposed rate increases for HMSA and Kaiser – apparently very few of them are off-exchange enrollments. And as far as market share for Hawaii Health Connector, it looks like HMSA has about 65 percent of the current effectuated enrollments, while Kaiser has the other 35 percent. That puts the weighted average proposed rate increase at just under 35 percent (if you include off-exchange plans as well, the proposed weighted average rate increase is slightly lower, at 33.7 percent).

  • HSMA: 49.1% x 61.8% market share = 0.30326471
  • Kaiser: 8.7% x 38.2% market share = 0.033264706
  • Total: 0.33652941 = appx. 33.7%

(Sigh) Not a pretty picture, but as Norris notes, that insane 49% hike might be chopped down to size yet.