New health insurer to try Island market
By Deborah Adamson
Advertiser Staff Writer
A new health insurer is expected to enter the Hawai'i market this year to compete against Kaiser and HMSA as a nonprofit, the state Insurance Commissioner said yesterday.
Summerlin Life & Health Insurance Co., a newly created subsidiary of Tempe, Ariz.-based i/mx Companies, hopes to get all its regulatory approvals by March and set up shop in time for policy renewals on June 1, said Commissioner J.P. Schmidt.
It's not yet clear what type of health plans Summerlin will be selling, he said. Products might include life insurance as well.
If the insurer's way is cleared, it will be the first major competitor in recent memory for Kaiser Permanente and HMSA, the state's largest medical insurer.
Summerlin wanted to come in as a for-profit company but was deterred by the 4 percent premium tax levied on insurers, Schmidt said. Nonprofits don't pay the tax, which is the industry's equivalent to the excise tax for other businesses.
As a nonprofit, Summerlin still has ways to legitimately make money for its investors, Schmidt said.
The commissioner said he had been in talks with several insurers, whom he didn't name, but Summerlin was the only one "with a real solid plan."
He said insurers are not beating a path to do business in Hawai'i for several reasons: The premium tax, a relatively small healthcare market that's isolated, the Prepaid Health Care Act that has restrictions on the way insurers can do business and the dominance of HMSA and Kaiser.
i/mx already knows the Hawai'i market. It owns HMA Inc. in Honolulu, a third-party claims administrator whose clients include the Hawaii Teamsters Health and Welfare Trust. The health plans of i/mx cover more than a million people nationwide.
Reach Deborah Adamson at email@example.com or 525-8088.