Roughly 16,000 Hawaii seniors opened their mailboxes this week to find letters from HMSA informing them that their current Medicare Advantage plan will not exist come 2027. The insurer has discontinued its Akamai Advantage Complete Plus and Akamai Advantage Standard Plus plans, forcing thousands of kūpuna to pick new coverage before the end of the year or risk losing prescription drug benefits entirely.
The notices, required by federal regulators, went out under a strict template that HMSA says it could not modify or supplement with other materials in the same envelope, according to Honolulu Civil Beat. The insurer told the outlet it has already fielded a wave of inquiries since the letters went out Monday, and it plans to mail a second packet explaining the changes in plainer language before October 15, when Medicare's annual enrollment period begins.
What's Replacing the Old Plans
HMSA has rolled out three new Medicare plans to replace the discontinued options, but the math looks different for many enrollees. The old Akamai Advantage Complete PPO charged a $20 monthly premium with a $7,700 cap on in-network out-of-pocket costs, per the Civil Beat report. The cheapest of the new PPO options runs $55 a month and raises the out-of-pocket ceiling to $8,200.
One alternative, called Select Plus, carries a lower $45 monthly premium and a $5,200 maximum in-network spending cap, but it's structured as an HMO rather than a PPO. That means patients need referrals to see specialists, and the plan carries higher potential costs for anyone who seeks care outside its network, the outlet reported.
HMSA Says It's Not Leaving the Medicare Market
Kimberly Takata Endo, HMSA's vice president of Medicare, said the overhaul reflects an industry squeeze rather than a retreat from senior coverage. The company said the new plans will expand member choice and support the long-term sustainability of locally based Medicare coverage, per Civil Beat, and stressed that HMSA will not leave the Medicare market altogether. HMSA described the move as a difficult decision made to keep offering affordable, high-quality care, and apologized for the inconvenience the changes are causing enrollees.
The numbers behind that decision are stark. HMSA reported a $117.4 million operating loss in 2024 despite collecting $4.4 billion in premiums that year, remaining profitable only through investment and other income, according to the same report. It isn't the first time the insurer has restructured its Medicare offerings under financial pressure — HMSA discontinued five Akamai Advantage plans affecting 46,000 seniors back in 2014, after estimating a $64.1 million loss the prior year from higher-than-expected claims and lower federal reimbursements, and replaced those plans with higher-premium options at the time.
Part of a Nationwide Retreat
HMSA's changes mirror pressure building across the entire Medicare Advantage industry. Major national insurers including UnitedHealthcare, Aetna and Humana are also raising out-of-pocket costs and exiting some regional markets, while narrowing provider networks, Civil Beat reported. Centene is pulling out of 344 counties nationwide for 2027, a contraction tied to margin pressures and updated federal reimbursement benchmarks, according to Healthcare Dive.
Federal reimbursement rate growth has slowed even as medical-service use and overall care costs keep climbing, and Hawaii's hospitals and insurers have been losing money while patients report trouble finding doctors, per the Civil Beat account. The Trump administration also ended national subsidies for Medicare drug premiums, a shift HMSA cited among the forces squeezing its Medicare business. Meanwhile, the Inflation Reduction Act's cap on Part D out-of-pocket drug spending is set to rise from $2,000 to $2,400 for the 2027 plan year, according to TheStreet, pushing insurers nationwide to redesign premiums and drug formularies.
CMS has also approved enrollment capacity caps for 65 Medicare Advantage plans nationwide for 2027, including five HMSA plans in Hawaii capped at between 5,000 and 12,800 members, as reported by Becker's Payer Issues. Those caps close plans to new enrollees once they hit the threshold while letting existing members stay enrolled. Even so, CMS projects the national weighted average Medicare Advantage premium will actually fall 16.5% to $12 a month in 2027, a trend that stands in contrast to the higher costs many Hawaii enrollees are now facing.
What Affected Kūpuna Should Know
Seniors who received a non-renewal letter automatically qualify for a federal Special Enrollment Period that runs through late February, along with guaranteed-issue rights to buy certain Medigap supplemental plans without health underwriting. Enrollees who take no action will default to Original Medicare on January 1 without drug coverage, a deadline HMSA's letter itself warned recipients about, telling them they must act before year's end to avoid losing prescription benefits. HMSA's letter also said the company hopes to serve these members again in the future, and included contact information for the federal Medicare hotline, per Civil Beat's reporting.
Keali‘i Lopez, Hawai‘i state director of AARP, which counts more than 130,000 members in the islands, said Medicare options can be genuinely confusing and advised consumers to shop around rather than default into whatever plan feels familiar. AARP does not sell insurance itself, but it offers free workshops to help kūpuna sort through their choices, Lopez told Civil Beat.
Seniors looking for free, unbiased one-on-one guidance can also call Hawaii SHIP's helpline at 808-586-7299, a counseling service run through the Hawaii Department of Health's Executive Office on Aging and staffed by more than 100 trained volunteers statewide. Enrollment decisions come due as Medicare's annual open enrollment period begins October 15, giving affected members a narrow window to compare plans before locking in 2027 coverage.
The shakeup also lands amid broader questions about HMSA's role in the islands' health care market. Hawaii lawmakers held hearings in January examining a proposed partnership between HMSA and Hawaii Pacific Health, called One Health Hawaii, which drew objections from rival systems including The Queen's Health Systems over fears of reduced competition, according to Becker's Payer Issues.
