House leaders seeking universal healthcare
By Robbie Dingeman
Advertiser Health Writer
State House leaders yesterday proposed an overhaul of the healthcare insurance system in Hawai'i, creating a state authority that would provide universal health coverage for all residents.
Rep. Dennis Arakaki, chairman of the House Health Committee, admitted such a radical change probably would not pass this year. But he said something revolutionary needs to be done to make affordable healthcare more available and to stem rising costs.
Hawai'i has long been viewed as a model state in providing its citizens with health coverage. The Prepaid Health Care Act of 1974 requires that employers pay the bulk of health insurance premiums for full-time employees.
But the share of Hawai'i residents without health coverage increased from 7.5 percent to 11.1 percent between 1997 and 2001, according to the U.S. Census Bureau. Among those who fall through the cracks are retirees and part-time workers.
Arakaki, supported by House Speaker Calvin Say and others, wants to scrap the prepaid health insurance program and replace it with a state authority that would roll all public and private healthcare insurance coverages into a single state-run insurance fund.
As described in House Bill 1617, the authority would collect payments from all insurance mechanisms — private plans such as HMSA, Medicaid, public-worker benefit programs and the medical portions of auto and workers' comp insurance.
"Healthcare spending is at an all-time high; double-digit increases are expected for Medicaid costs and private insurance premiums, an aging population is needing more care and prescription drugs; and the poor economy is making it difficult for any payer to cover it, whether state governments, businesses or individuals," said Arakaki, D-30th (Moanalua, Kalihi Valley, Alewa).
Senate President Robert Bunda was less than enthusiastic about Arakaki's proposal, although he did not know the details.
"The first thing that crosses my mind is when you have any kind of state administration, of course you're talking about more people added to the rolls, you're talking about a bureaucratic maze that people kind of don't want anymore," said Bunda, D-22nd (North Shore, Wahiawa). "There are times when you have a state administrator doing something maybe the private sector should be doing, (and) the process is somewhat slowed down."
Reaction from industry and community representatives was cautious to skeptical.
Cliff Cisco, senior vice president for the Hawai'i Medical Service Association, the state's biggest private health insurer, said such a big change is unlikely to win support quickly.
"This would be a significant move toward government responsibility for all healthcare," Cisco said. "I'm not sure that this community is ready to turn everything over to the government."
Arakaki acknowledged that the proposal is likely to face opposition from businesses and the unions, who might not like the idea of being put into one plan. But he believes businesses, who have complained about the increasing costs of health insurance premiums, might be open to the discussion as a way to slow or stop rising costs.
Greg Marchildon, executive director of AARP Hawai'i, which represents retirees, said the organization sees the need for reform, because "the system in due time is simply going to implode under its own weight."
But Marchildon isn't sure the timing is right for a radical overhaul, because Hawai'i has been effective at insuring most of its residents.
"We are the envy of the rest of the states," he said.
No state has universal health coverage, although there have been ballot initiatives put before voters.
In November, Oregon voters rejected a universal healthcare system that would have been the first in the nation, in which every resident would receive medical coverage for everything from massage therapy and marriage counseling to brain surgery and long-term care. The sponsors of the initiative cited rising numbers of uninsured people and spiraling costs.
Backers of the ballot proposal said they were outspent by powerful special interests, despite strong grassroots support.
"This is going to be a very tough haul," Marchildon said.
Across the country, universal healthcare advocates have been frustrated in bids to revive debate and congressional action in Washington after the Clinton administration's failed attempt to retool healthcare finance in 1993-94.
Oregon's ambitious proposal called for potentially steep increases in payroll and personal income taxes. But supporters said those costs would be offset, because residents no longer would pay premiums for private health insurance. Instead, they would rely on a single-payer system that would reimburse doctors and other providers for their medical bills, with no co-payments or deductibles.
Opponents, including business leaders, insurers and health maintenance organizations, said the plan would have cost as much as $20 billion a year, wreaked economic havoc and caused an exodus of investment and jobs from Oregon.
Rich Meiers, president and chief executive of the Healthcare Association of Hawai'i, representing hospital and other healthcare providers, said it's clear the industry needs to "look at something new," though he stopped short of saying a state-run system would be an improvement.
Costs are going up for consumers and hospitals, while government reimbursements have declined as the numbers of uninsured have gone up, Meiers said.
The Associated Press contributed to this report. Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 535-2429.
