Editorial
Don't rush health insurance review

Whether the state's insurance commissioner should be given more control over Island health insurance policies is an important issue that definitely should be taken up by the Legislature. But it is far too complex a matter to be considered in this month's special session, as the governor has proposed.

Under a draft proposal sent to legislators, the commissioner would be able to order health insurers to change rates it they are found to be excessive, inadequate or discriminatory. And, it would require insurers to disclose increases in healthcare costs when increasing rates.

Insurance Commissioner Wayne Metcalf said the oversight is needed "in times of economic dislocation." That may be true, but no compelling reason has been put forward for haste on this issue.

Health insurance is justifiably a capstone of Hawai'i's effort to provide for the basic needs of its citizens. Hawai'i law mandates health insurance coverage for most employees. That means the state has the responsibility for strict oversight of the insurers, particularly as competition in that field continues to shrink.

For example, the Legislature should take a serious look at the reserve levels maintained by the state's largest health insurer, Hawai'i Medical Service Association. HMSA's reserves have more than tripled during the last 10 years while rates have grown for most HMSA members.

HMSA said the reserves are necessary to pay for operating losses when premiums don't cover expenses. And indeed, HMSA's members may find themselves well-served by HMSA's reserve levels during this current economic downturn. We hope that will be the case.

Already, HMSA has announced a $50 million program to help struggling employers and those who have lost their jobs. HMSA said that for those members laid off because of the economic impact of the Sept. 11 terrorist attacks, it will subsidize healthcare coverage payments for anyone without access to alternative health coverage. And, financially struggling employers will get an allowance that would equal about 5 percent of the health plan dues.

Kaiser Permanente has been working with employer groups who need help on a case-by-case basis.

All this suggests there is no need to rush into oversight of the health insurance industry's rates and reserve levels. There was a need for a review before the current crisis, and insurers have signaled flexibility for those in need.

Both the industry and the people it serves deserve a reasoned, careful review. Let's step back and wait until January and the regular session of the Legislature for any action.