Saturday, May 21, 2022
Hawai'i Free Press

Current Articles | Archives

Thursday, September 17, 2015
Report: Challenges Facing Hawaii 40 Years After the Prepaid Health Care Act
By News Release @ 2:38 AM :: 4424 Views :: Hawaii Statistics, Health Care

Hawaii’s Health Insurance Premiums on the Rise, Burden to Employers

News Release from HHIC, September 15, 2015

Hawaii’s health insurance premiums for small businesses have risen an average of seven percent annually since 2003. That’s according to “The Challenges Facing Hawaii 40 Years After the Prepaid Health Care Act (PHCA),” a study conducted by Hawaii Health Information Corporation, the state’s premier healthcare data collector and analyzer.

Healthcare data

Passed in 1974, the State’s PHCA has contributed to one of the lowest uninsured rates as well as the lowest and slowest growing health insurance premiums in the nation. Still, the cost of health care—physician, hospital and insurance services, prescription drugs, equipment and supplies—is steadily increasing.

ACA is Impacting Rising Costs

On top of increasing health care costs, premiums are expected to rise further as a result of various Affordable Care Act-related fees. For example, HMSA’s fees in 2014 totaled $65.4 million, and as was done across the country, fees were passed directly on to consumers. Four out of nine percent of HMSA’s premium increases for small business was attributed to ACA-related fees in that same year.

The most significant ACA-related fee is the insurance provider fee, imposed on all insurers to subsidize health insurance for eligible individuals who purchase a plan on a health exchange. In implementation year 2014, $8 billion was collected nationwide. Nearly 60 percent of HMSA’s 2014 ACA-related fees—$39 million—represented the insurance provider fee. The insurance provider fee is permanent and expected to increase two to three percent per year to cover the subsidies for health care premiums. The fee is projected to reach $14.3 billion in 2018.

The second fee helps finance the Patient-Centered Outcomes Research Institute. Initially set at $1 per insured person during FY 2013, the fee increased to $2 per insured person on all plans during FY 2014. Going forward, the fee will be adjusted based on the U.S. average rate of health care inflation, which was nearly three percent per year from 2010 to 2013.

Since the ACA prohibits denying individuals health insurance based on pre-existing conditions, the third fee involves subsidizing high-risk enrollees through the transitional reinsurance and risk-adjustment programs. Scheduled to last only three years, the transitional reinsurance program collected and distributed $10 billion in 2014 (translates to a $63 fee per covered life); $6 billion is anticipated in 2015 and $4 billion in 2016. The risk adjustment program is permanent; insurers with lower-risk enrollees will pay insurers with higher risk enrollees within the same state.

The final fee is a sustainability fee to finance health insurance exchanges since federal funds have been exhausted. By the end of 2014, Hawaii imposed a two percent sustainability fee on premiums purchased that year on the then state-run exchange. Since Hawaii no longer has a state-based exchange, sustainability fees collected will go to funding the federal marketplace, HealthCare.gov.

The employee-employer cost share structure laid out in the PHCA, rising health care costs and in recent years, these ACA-related fees, has led to employers in Hawaii paying an increase of more than 3,000 percent to cover their portion of employer-based healthcare coverage since 1974.

“The Affordable Care Act, while a real advance for the rest of the country, is placing a special burden upon Hawaii, which has already achieved much of what the ACA has set as health goals for the nation,” said Peter Sybinsky, CEO of HHIC. “These burdens—payment reductions, high insurance taxes, additional health benefits—all make it more difficult to maintain the historical commitment to universal coverage that has made Hawaii a leader in health reform.  As a community, we need to work together to respond appropriately to this major challenge.”

About Hawaii Health Information Corporation

Established in 1994, HHIC maintains one of the largest comprehensive healthcare databases in the state, comprised of local and national inpatient, emergency department and financial data. The research and data compiled are analyzed and disseminated statewide and are used to help shape healthcare policy and educate decision makers, healthcare providers and industry experts. Through Insight Reports, HHIC seeks to inform the public about important healthcare topics.

For more information, visit www.hhic.org.

“The Challenges Facing Hawaii 40 Years After the PHCA,” can be downloaded here.

Its companion study, “Hawaii’s PHCA 40 Years Later,” can be downloaded here.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

ACA Signups Hawaii

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Back da Blue Hawaii

Ballotpedia Hawaii

Better Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Life Alliance

Hawaii March for Life

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT