Posted on: Thursday, October 30, 2003

EDITORIAL
Policy crunch looms over health insurance

A conference yesterday at the Hilton Hawaiian Village put a bright spotlight on what, quite rightfully, should be a fulcrum issue during the next legislative session and into the campaign season.

This is the issue of the rising cost of health insurance in Hawai'i and the related increase in the number of people who are uninsured.

Hawai'i's proud reputation as a "health state" that seeks to provide coverage for all is in danger. Reversing the trend will take a delicate balance between benefits and costs, between reaching as many people as possible and protecting the economic health of our business community.

Many businesses are finding that soaring health insurance costs for their workers are destroying profit margins. They find themselves forced to lay people off or place them on part-time hours so the workers are no longer covered under the mandatory Prepaid Health Care law.

Yesterday's conference was sponsored by the Hawai'i Uninsured Project, which is looking for creative ways out of this unhappy squeeze.

Rewriting the underlying Prepaid Health Care law will be difficult, since changes would require congressional approval. That's because Hawai'i was granted a waiver from the federal Employee Retirement Income and Security Act, which generally prohibits such state mandates on employers.

But at some point, changes may have to be made. They could include boosting the employee share of the health insurance premium (today it is capped at 1.5 percent of salary) or by scaling back on some of the more expensive benefits that have been added (through changes to state insurance laws) since the law was written in 1974.

Another possibility would be some kind of pro-rata system so that part-time workers could buy insurance with a different cost-sharing schedule. Tax credits for those who provide at least limited coverage to part-time workers are also a possibility.

A short-term fix, particularly for hard-hit small businesses, would be more aggressive use of the premium supplementation fund designed to help small companies in a temporary bind.

Others talk about a state-sponsored group health insurance plan, similar to the QUEST plan for lower-income residents, that would reach the growing number of independently employed Islanders.

None of this will be easy. Lawmakers must understand that there are serious economic and social costs involved in any change they might make.

Ultimately, however, Hawai'i must not lose sight of the goal of universal health insurance coverage for its citizens.