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The Honolulu Advertiser
Posted on: Sunday, January 1, 2006

Will health costs continue to rise?

 •  The burning questions of 2006

By Christie Wilson
Advertiser Neighbor Island Editor

With healthcare costs rising, prevention is increasingly important.

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Staying healthy may be the best remedy for consumers facing a poor prognosis for the cost of healthcare. It's true the rate of increase in healthcare costs has slowed in the last few years to single digits in Hawai'i and most of the country.

But declining or flat reimbursements to providers from Medicare, Medicaid and insurance companies, along with consumer and physician demands for better technology, medical services and drugs, mean costs will continue to rise in 2006.

Businesses have their own prescription for relief, including making employees pay more for their healthcare plans by increasing deductibles and patient co-payments for medical visits.

Most union members in Hawai'i working for private employers can expect healthcare costs to be a major part of contract negotiations, as shown by recent labor agreements between the United Auto Workers and two of the country's largest employers, GM and Ford. In both cases, unions agreed to contracts that require workers and retirees to kick in more from their own pockets.

However, the 100,000 Hawai'i state and county workers and retirees receiving healthcare benefits may face less pressure. State officials say the Hawai'i Employer-Union Health Benefits Trust Fund, established in 2001 as a unified benefit delivery system, has been able to save money because of the improved leverage of a larger group. Officials say rates for the plan year beginning July 1, 2006, are anticipated to be lower than projected.

Meanwhile, lawmakers are working to see that Hawai'i maintains its reputation as one of the country's healthiest states. The upcoming session of the Legislature will consider measures to improve access to healthcare and promote healthy lifestyles, two other ways to reduce costs. There will be proposals to provide a dedicated funding source from the tobacco tax for the Hawai'i Cancer Center and to expand smoke-free workplace laws. Task forces established during the 2005 session will continue to look at reducing the number of uninsured residents and improving trauma care, rural healthcare and long-term care.

Reach Christie Wilson at cwilson@honoluluadvertiser.com.