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The Honolulu Advertiser
Posted on: Wednesday, April 24, 2002

Legislature 2002: Time is running out fast

With the end of the 2002 session fast approaching, lawmakers appear to be slipping into that end-of-session freeze that often transforms a good session into a mundane one.

It's understandable, in a way. Until the final conference committee negotiations on major issues, most of what happens at the Legislature is tentative, marginal and subject to change. But the conference committee is where the deal is closed.

Recent stories out of the state Capitol suggest lawmakers are either backing away from, or watering down, some of the most high-visibility legislation of the session. This includes campaign finance reform, regulation — or oversight, if you will — of health insurance rate-making, prescription drug plans for seniors and substantive reform of the public school system.

The schools will benefit, however, from a solid repair and maintenance program for public school facilities that appears likely to pass. But on governance and classroom performance, legislators have run out of gas.

The issue of rate regulation for health insurers is complex and sensitive. Local insurers, the fee-for-service Hawai'i Medical Services Association and the health maintenance organization Kaiser Permanente strongly oppose the idea. They say oversight of their rate-making practices is just the first step toward inevitable regulation of rates.

And in a way it might be, since opening the door on their rate-making practices would allow the Insurance Commission to determine if the rates were excessive, inadequate or unfairly discriminatory. The insurers say they are not, and there is no reason to assume otherwise.

Still, other lines of insurance, such as casualty and homeowners, are subject to rate regulation in Hawai'i, and those industries appear to be thriving.

Hawai'i has a reputation for widely available, high-quality medical insurance. It's a system that is worth protecting. If rate oversight appeared to threaten that system, it would not be worth the effort. But no one has made a convincing case that the harm would outweigh the benefits.

As for campaign spending reform, legislators appear ready to compromise all the life out of what appeared to be a sensible and straightforward series of changes. The plan was to model Hawai'i law after federal law, banning all corporate and union contributions. In addition, it would have placed a ban on the award of nonbid contracts to campaign contributors, thus breaking the nexus between contribution and contract.

The compromise would simply ban contributions from banks and unions, while allowing others to continue with business as usual. That's an awkward compromise at best. As for giving contracts to contributors, the latest proposal would allow it except where a "majority" owner of a corporation had made a contribution.

That's an idea that would have little impact on big companies but would hit directly at small firms and sole proprietorships, exactly the opposite from what should be done.

In these and other areas, it is not too late to come up with solid, forward-thinking, courageous legislation that sends a strong signal that the Legislature has the people's interest first. But time is running out.