"Now when we're old, they don't need us," said Harold Nakamoto, 75, the president of the Hawai'i Barber and Barber Stylists Association, which comprises 1,000 Hawai'i barbers and stylists. "Our medical bill gets high when we get older and they're trying to get rid of us because they're not making money."

The letter, signed by Hawaii Medical Service Association enrollment manager Tracey Villeza, went to 50 barbers with HMSA coverage. It offered no explanation for canceling their coverage.

But Nakamoto said he was told by HMSA officials that the 50 barbers were no longer eligible for coverage — despite a 42-year relationship — because they do not have workers' compensation coverage.

All but one or two of the barbers, however, are sole proprietors who have no employees, Nakamoto said.

And they're therefore not required to comply with rules governing such things as workers' compensation, the prepaid healthcare act and temporary disability insurance, said James Hardway, assistant to the state director of labor and industrial relations.

Business owners with employees are required to have an unemployment insurance number so the state can track their compliance, Hardway said.

"Those laws were put in place for employers with employees," Hardway said. "It doesn't make sense for us to track coverage or provide coverage in an area where there are no employees."

After an inquiry from The Advertiser, Cliff Cisco, HMSA's senior vice president, said HMSA is re-examining its stance with the barbers and will possibly "grandfather" them to allow for continued coverage.

"It's a really old group that's been with us for a while," Cisco said. "The bottom line is that we're re-examining the situation."

HMSA offered the barbers coverage as employers, Cisco said, and such groups are supposed to have unemployment insurance numbers.

Even though the law requiring unemployment insurance numbers was passed in 1974, the barbers' situation wasn't discovered until an audit this year, Cisco said.

He could not explain why it took HMSA officials so long to discover the discrepancy. And he could not immediately say whether HMSA has sent similar cancellation letters to other employer groups.

In the meantime, longtime barbers such as Gary Lee of A-Plus Barber in Kane'ohe worry about what they'll do if HMSA follows through on its letter and cancels his coverage in two weeks.

Lee pays $650 a month for health coverage for himself and his wife. Despite the cost, Lee does not want to switch to Hawai'i's other major health insurer, Kaiser Permanente, because he wants to stay with his longtime doctor.

"The letter says our coverage is going to be canceled at the end of year," Lee said. "That's very, very short notice. We're all terribly upset about this. We need medical coverage. Who do we go to?"