Column: HMSA’s policies put healthcare at risk | Honolulu Star-Advertiser
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Column: HMSA’s policies put healthcare at risk
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Every week, we see new patients who had to wait months to refill prescriptions or get a checkup. Hawaii County has a 43% provider shortage that is projected to worsen to 50%-60%. Rural health clinics like mine operate on thin margins to care for the community, but Hawaii’s dominant health insurer isn’t making it easy
This crisis began in May when the Hawaii Medical Service Association (HMSA) issued an operationally impossible 60-day notice that it was radically changing the payment structure for primary care providers (PCPs). Recognizing the catastrophic threat to clinic survival and patient access, Gov. Josh Green intervened to negotiate a transition deferral to Jan. 1, 2027
Instead of honoring that agreement, HMSA imposed new 60-day notices. Beginning Sept. 1, tens of thousands of HMSA patients will be stripped from their provider’s panels if contingencies aren’t met. Any patient who has not had an electronic claim processed within the preceding 18 months is dropped from a provider’s panel. If a patient sees more than one PCP in a calendar year, HMSA reimburses only the single provider logging the highest number of visits. Secondary providers receive zero compensation for care rendered.
Bottom line: HMSA is tightening control, moving away from patient choice and moving toward assigned PCPs
We’ve been having monthly meetings with Hawaii Health Partners (HHP), a network of providers that includes my group, Waimea Primary Care. In a recent meeting with an HHP executive, she said that she told HMSA:
“This is a significant shift, especially to the independent docs. This is putting people in critical scenarios of trying to understand how they will continue to see patients and keep their lights on. HMSA is receiving a lot of feedback and concerns around this
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“I meet with HMSA every week and we continue to raise these issues, talk through all the various scenarios that could happen, and will happen, based on these changes. It’s a really unfortunate situation. We’re letting them know this is impacting small businesses. We have told them that the 60 days is not sufficient. There are gonna be practices who probably have been in practice for generations that are no longer going to be in existence, because of this shift.”
HMSA is a corporate titan controlling 70% of the state’s health insurance market. Operating as a tax-exempt “mutual benefit society,” HMSA avoids an estimated $200 million annually in state general excise taxes on approximately $4.8 billion in annual premiums. HMSA cites a $117 million net loss in 2024 — 2% of overall revenue — to justify aggressive payment changes. Yet state regulators subsequently approved premium rate hikes expected to yield HMSA an additional $500 million
Where is that money going? It certainly isn’t reaching the clinics keeping island families healthy. HMSA allocates a mere 3.5% of premiums to primary care, after adjusting reimbursements for administrative costs. By comparison, states like California and Maine dedicate 10% to 15%. At one-fourth the compensation share of other states, it is no wonder why Hawaii cannot retain doctors despite being a world-class destination
HMSA frames these changes as necessary cost containment, but draconian measures fueling executive windfalls could lead to healthcare collapse. In 2023 HMSA laid off 200 employees, moved positions oversees, and then granted record bonuses to its executives and board members, in the millions. HMSA is underfunding doctors while its CEO earns $3.2 million annually
Hawaii’s leaders must decide whether they answer to a multibillion-dollar corporate monopoly or to Hawaii residents, whose lives depend on a stable, competitive healthcare market. In a few weeks HMSA will remove 450 patients (40% of my panel), resulting in a $162,000 annual loss. Two Hilo practices have already closed in response. I just hope we’re not next
Kaleo Correa, Ph.D, is an advanced practice registered nurse at Waimea Primary Care on Hawaii island and a member of the Hawaii Healthcare Task Force
