Family Health Hawaii

Former state Insurance Commissioner J.P. Schmidt has taken the job of CEO of Family Health Hawaii, a startup health insurance company, and said he hopes to have as many as 50,000 members in five years.

Family Health Hawaii, which is preparing to enter the Hawaii market in the next few months, will be the state's fifth commercial health insurer, competing with Hawaii Medical Service Association, Kaiser, Hawaii Medical Assurance Association and UHA (University Health Alliance).

Family Health Hawaii received conditional approval to sell insurance from the state's Prepaid Health Care Advisory Council on Thursday, said Paul Tom, council chairman. The council reviews health insurance plans to ensure they meet the requirements of the 1974 Prepaid Health Care Act, the law mandating employer-sponsored health insurance for full-time workers.

The new health plan will offer lower premiums for small businesses and help drive down the rates of other insurers as well, Schmidt said.

Hawaii's health insurance market is dominated by HMSA and Kaiser, which controlled 77 percent and 21 percent of the market, respectively, in 2010, according to the American Medical Association.

"We believe that our premiums will be very competitive and, in many cases, lower than what the current health insurers provide," Schmidt said.

"That is what our aim is. Family Health Hawaii has been set up with a very efficient structure — a structure that we believe will enable us to provide health insurance at a lower premium rate."