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The Honolulu Advertiser
Posted on: Wednesday, December 16, 2009

Hawaii's health care model not perfect


By Jerry Burris

In the debate now coming to a head in Congress over health care reform, Hawai'i provides a profound and obvious object lesson.

Hawai'i was the first state in the nation to impose near-universal health care coverage (at least for those employed) in 1974. This has led to near-record levels of coverage but also an ongoing scramble to find ways around the law and its implications.

The lesson taught? That any reform plan carries within it the seeds of failure, as long as it represents a compromise between what private industry wants (employers and the health industry) and what advocates of universal coverage desire.

When the pioneering Hawai'i law was passed in 1974, the concept was fairly straightforward: Most families have someone working at least 20 hours a week. For those workers, a cost-sharing arrangement would be set up in which health insurance would be purchased. Those who fell out of the system would be covered by various government programs.

There was a clear cost element to this plan. But the idea was that since every employer faced the same obligation, there would be no competitive disadvantage to anyone. The bar would be raised higher, but it would be raised for all.

Of course, for any good idea, there are ways around the edges. Some employers discovered that they could hire people for fewer than 20 hours a week and thus escape the health care obligation. Others exercised their right to offer basic coverage only to the employee, not to his or her dependents or family members.

Meanwhile, lawmakers — under pressure from interest groups — continued to add benefits and extensions to the basic plan, making it more and more expensive. The result: a gaudy health care system lavish in its benefits but peppered with exclusions, loopholes and the like.

Several efforts by the state to plug the pukas in the program met with limited success. One reason was that every time the government offered a new program, people would find a way to flee the private health insurance system and inject themselves into the government plan. That happened, for example, with the 2007 Keiki Care program, which was canceled by the Lingle administration after it appeared that many families were going to this government-sponsored program even though they had their own private health insurance.

Right now, Congress — under extraordinary pressure from President Obama — is trying to compromise its way toward success on a health care package that will have so many back doors and loopholes it might end up achieving victory at the price of success.

The lesson of the Hawai'i experience, and we now have more than three decades of it, is that even the best of intentions will falter if compromise becomes the guiding principle. Surely, the best approach is universal health care, available for all whether working or not working, rich or poor, young or old.

What we are seeing in Congress tells us this solution is not yet politically viable. So what Obama and his Democratic supporters are doing is pushing part-way toward that goal with the hope that the logic of a universal solution will soon become obvious.

Jerry Burris' blog is at www.honoluluadvertiser.com/section/featured blogs. Reach him at jrryburris@yahoo.com.