At the start of 2005, state and county employees will have one option for health insurance. Kaiser Permanente, which has served Kaua‘i residents since the mid 1990s, will cease operations on the island beginning next year. With Kaiser deciding to
At the start of 2005, state and county employees will have one option for health insurance.
Kaiser Permanente, which has served Kaua‘i residents since the mid 1990s, will cease operations on the island beginning next year.
With Kaiser deciding to pull out of Kaua‘i, Hawaii Medical Service Association (HMSA) is the only insurance option for state and county employees on Kaua‘i.
Two other insurers, Hawaii Management Alliance Association (HMAA) and University Health Alliance (UHA), offer coverage on the island, but are not an option for those government workers.
“We are doing what we can to provide alternatives,” said J.P. Schmidt, state insurance commissioner. “I am working to bring more insurers to the state in order to stimulate competition. We are certainly looking to fill the void (on Kaua‘i) left by Kaiser.”
According to Alison Russell, the Kaiser Permanente Hawai‘i director of media relations, the main reason for the move is high costs of contracting services on the island.
“Kaiser Permanente is an integrated health-care delivery system, and it was difficult to provide that model on Kaua‘i where we were contracting with another medical group,” said Russell.
“Another reason is that the cost of providing care outside our system proved financially tough, meaning that we have higher costs when we use outside providers rather than stay within our existing clinics and hospital.”
Currently, Kaiser serves 4,700 Kaua‘i residents, many of whom are state and county employees.
Commercial employer group members will lose their Kaiser insurance plan on Dec. 31, 2004, while state and county employees whose plan coverage begins July 1, 2004 also will be affected by the move.
According to Russell, with the open-enrollment period for state and county employees coming up in April, the change will be included in coverage-option booklets going out affected employees next month.
The company has recently sent out a letter to all of its members discussing the termination of coverage.
“We are notifying employers almost a year in advance so they have a lot of time to make their arrangements with another health insurer,” said Russell.
“Individuals who receive their coverage through a prior employer should contact that employer to discuss their options. Individuals who receive coverage directly from Kaiser Permanente will need to contact other health insurers to discuss their options,” she said.
Kaiser has provided health coverage to its Kaua‘i members under a contractual arrangement with Kauai Medical Clinic for physician services, and Wilcox Memorial Hospital for in-hospital services.
The company also served a small group of commercial business customers with branches statewide, and provided coverage for some national employers.
“I am not happy about this at all,” said Schmidt. “I would like to have a number of companies providing services. On the other hand, the government cannot force (insurance) companies to do business.”
Schmidt discussed a piece of legislation, the Trade Association Health Plan Bill, that will be on the ballot in November.
The bill would allow trade organizations such as Chambers of Commerce or real estate agent associations to provide health plans for members.
Business Editor Barry Graham may be reached at 245-3681 (ext. 251) or mailto:bgraham@pulitzer.net.
