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By Kristi Van Pernis
Unbelievable! HMSA is asking for yet another rate increase instead of initiating internal cost cuts on themselves! Enough is enough!
All HMSA rates went up 12.1% last year. Eight months later, they are asking for another increase on various plans by 7.8% to 15.1%. If approved, this is an obscene rate increase of 19.9%% to 27% plus in less than a year.
Let’s state the facts. Nothing HMSA has done has cut member prices while providing “affordable, quality, health care” which they state as their non-profit mission.
President and CEO Robert Hiam received a total of $1.3 million this past year, Executive VP and Chief Operating Officer, Michael Gold received $965,219, Steve Van Ribbink, HMSA’s Executive VP and Chief Financial Officer, received $633,660 and on it goes.
HMSA needs a huge reality check – in this recession, they need to pay themselves less, (just like the rest of us do), cut out the waste, the ridiculous amounts of mailings and redundant print materials (including the glossy little magazine), the TV ads, and the excessive expense of web designing and maintaining of a site that offers medical advise over the internet (incidentally, this is the same information that you can get for free on MSN.Health or Health.Nih.Gov).
They have increased our rates while pushing dubious generics, Internet medical advise, and decreased benefits while upping prescription co-pays and their salaries, all the while lobbying to influence attempts to reform health care which included increased medical reimbursements to doctors.
A summary of the last decade of HMSA rate increases is incredulous, starting with the year 2000, up 8.5%; 2001, up 9%; 2002, up 5.8%; 2003, up 9.9%; 2004, up 7.7%; 2005, up 5.0%; 2006, up 3.8%; 2007, up 6.7%; 2008, up 10.4%; 2009, up 12.1%; 2010, depending on your plan type, up 7.8%, 10.5%, or 15.1%. (Source: HMSA)
Can anyone name another industry that can jack up rates every single year as much as HMSA does and still stay in business? No wonder they say Hawaii is such a hard place to do business. Undoubtedly, many small businesses will be forced to cut back full-time employees to 20 hours or less which means more people without insurance. (Health care reform, anyone?)
HMSA’s tax exempt status gives them an $80 million a year exemption. Great! I want them to build their reserves, I don’t even mind that a “non-profit” can pay it’s CEOs so well, but when that pay comes at the cost of consistently screwing over member business owners and doctors to pay themselves more while masquerading as a non-profit, it’s illegal.
I think it’s insane that Gov. Linda Lingle doesn’t demand a public audit for the State’s largest insurer. A public and/or private audit with transparency is long overdue. Also long overdue is the State Insurance Division’s reply which should just be “NO”.
Kristi Van Pernis is a resident of Kailua-Kona
Kristi, I feel your frustration, but I see lies and hypocrisies in almost every sentence you wrote. I guess you just need someone to blame, and guess what? It isn’t HMSA. 1 – You say that HMSA has not initiated any internal cost cuts. It says in their press release that 96.3% of dues went to providers (meaning that only 3.7 keeps the company operating). That’s their biggest admin cut ever. They have also had a hiring freeze for over a year (I know) and layoffs, and all of the top execs have taken pay cuts. Where did you get this fact? 2 – You claim the increases are in less than one year. Actually, the rate adjustments are done annually, at the same time every year. If you read the statement, it say it will go into effect in July. 3 – I think it’s funny that you say “Let’s state the facts,” and then don’t state any. Just like every other business, I’d imagine they’re doing everything they can to keep their customers. 4 – Finally, here’s something that’s true: “They need to pay themselves less.” Guess what? That are. Check their press release. Their CEO took a 3.4% pay cut. 5 – Show me one health insurer – or any successful company for that matter – that doesn’t have a website. Bad idea. 6 – You’re mad they’re pushing generic drugs? Don’t you understand that’s a way for members to save money? (Oh that’s right, they’re not helping members save money…) 7 – “Can anyone name an industry that jacks up their rates every year?” Where do I begin… Try pretty much every business in the country. 8 – I find it amusing that in your sixth paragraph, you complain that HMSA is lobbying for health care reform, then 2 paragraphs later, lobby for it yourself! 9 – Do you seriously want HMSA to become for-profit? Think about what you’re saying… And by the way, their reserves keep shrinking every year. 10 – Transparency is overdue? Perhaps you missed every annual press release stating – in detail – HMSA’s losses and gains, the amount in their reserves, and compensation for their executives. But how convenient that you forgot to mention in your rant that HMSA just posted its biggest loss ever and that the state stopped reimbursing HMSA for QUEST members. Also kept out of your rant is the fact that you should be lucky you live Hawaii, where health insurance costs are about 1/3 what they are on the Mainland. Did we read the same report? Get your facts straight.
Unfortunately, “Happy To Have Health Care†seems more of an HMSA apologist than an engaged citizen observer. The first contention- that HMSA used just under 4% of its dues to fund operations – is simply inaccurate. While they may have used over 96% of dues to pay for medical expenses (i.e., claims), the reason they keep dipping into reserves is because 4% simply isn’t enough to fund their vast operation. While HMSA may have had great influence in keeping insurance costs lower in Hawai‘i than in other states, they’ve clearly not used their enormous influence to do the same for the cost of care by leading a transformation of a system that is clearly broken. I won’t cry for executives taking 4% pay cuts when people are losing 100% of their pay due to layoffs caused by out of control insurance premiums that force businesses to close or pare down staff. As a former HMSA employee for several decades, I can tell you forthrightly that if you think what you read in press releases and annual reports constitutes transparency great enough to understand what really goes on in that organization, or paints a clear picture of how the economics of health care actually work, then you are sadly mistaken.