Lawmaker urges HMSA to cut premiums

By Lynda Arakawa
Advertiser Capitol Bureau

The chairman of the Senate Commerce, Consumer Protection and Housing Committee yesterday called on the Hawai'i Medical Service Association to roll back future health premiums and reduce patient co-payment costs for medical bills.

"Given HMSA's large cash reserves and tax-exempt, nonprofit status, the company could also have the financial ability to reduce rates," said Sen. Ron Menor, D-18th (Waipi'o Gentry, Wahiawa), whose committee oversees insurance issues.

The Advertiser last week reported that HMSA, the state's largest health insurer, had accumulated more than $502 million at the end of last year while raising rates for most if its members in recent years. State law requires HMSA to keep only a minimum reserve balance of $95 million.

HMSA spokesman Cliff Cisco has defended the company's reserves, saying the surplus is used to pay for operating losses while rate increases cover inflation and other expected costs. He also attributed the growth in the reserves to the strong stock market.

Menor yesterday expressed concern over the cash reserve, saying many Hawai'i residents still seek affordable medical insurance.

He said he also will ask state Insurance Commissioner Wayne Metcalf to explore equitable reimbursements for physicians' groups and other health providers. He also said he wants to look at the issue of health insurers' reserves in the next Legislative session.

House Consumer Protection and Commerce Committee Chairman Ken Hiraki, D-25th (Downtown, Ala Moana), also has said he is exploring creating a state health care consumer advocate position to evaluate health insurance costs and assess how much reserves insurers should be able to maintain.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or 525-8070.