HMSA ends plan over battle for money

By Susan Hooper
Advertiser Staff Writer

The Hawaii Medical Service Association is ending a health plan for Medicare recipients, saying federal reimbursements are inadequate.

The plan, called Health Plan Hawaii Classic, has about 2,500 members, according to Cliff Cisco, HMSA's senior vice president.

Members were notified in a letter dated Aug. 1 that the plan would be ending Dec. 31, he said. The letter also told members of insurance alternatives, he said.

Members have the option of switching to HMSA's Plan 65 C Plus; to a plan offered by Kaiser Permanente Hawaii; or to supplemental plans like those offered by the American Association of Retired Persons, Cisco said.

Those eligible for Health Plan Hawaii Classic were people 65 or older, and Medicare-eligible disabled people of any age, Cisco said.

Monthly dues were $55 for Health Plan Hawaii Classic, which is a health maintenance organization plan, Cisco said. Monthly dues for Plan 65 C Plus, which is a fee-for-service plan, are $72.75.

HMSA started Health Plan Hawaii Classic about two years ago when the federal government was promoting HMO coverage for Medicare recipients, Cisco said.

"The funding from the government as to what they're willing to pay in Hawai'i for this small plan was just not adequate," he said. "We estimate that we lost about $1.7 million in the year 2000. ... We were hoping there would be more reimbursement in the program, but it didn't happen."

Hawai'i counties receive some of the lowest federal reimbursements in the country for these types of plans, Cisco said. Other health insurance plans on the Mainland also have stopped offering this type of coverage because of reimbursement problems, he said.

Jan Kagehiro, a spokeswoman for Kaiser Permanente Hawaii, said Kaiser has no plans to make changes in its Medicare plan, which is called Senior Advantage.

Kaiser, Hawai'i's second-largest health insurer behind HMSA, is an HMO.

Kagehiro was unable to comment yesterday on whether federal reimbursement was also an issue for Kaiser. But, she said, "Regardless of what happens, we remain committed to offering the Senior Advantage plan to our members."

Correction: The monthly dues for the Hawaii Medical Service Association's Plan 65 C Plus insurance are $72.75. A previous version of this story had a different figure.