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The Honolulu Advertiser
Posted on: Thursday, January 7, 2010

Hawaii will benefit from health care reform


By Brian Schatz

Hawaii news photo - The Honolulu Advertiser

House Speaker Nancy Pelosi discusses the health care bills that will help more Hawai'i residents get needed coverage and care.

ASSOCIATED PRESS FILE PHOTO | January 2010

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We're closer than ever to passing the most important health reform since Medicare transformed the lives of America's seniors.

These changes will help Hawai'i's residents by making coverage more stable and assist the uninsured by making insurance more affordable. Let's remember that every major piece of domestic legislation had its detractors as passage neared, their voices growing louder and their criticisms more harsh. But after the dust settled, whether it was Social Security, Medicare or Medicaid, these reforms made people healthier and more financially secure.

It's not surprising that Gov. Linda Lingle opposes health reform, but in her zeal to discredit the legislation, she gets her facts wrong. The governor labels the effort "forcing our nation's people to surrender their common sense and independence to a hurried, fiscally unsustainable and seriously flawed political boondoggle."

Let's set aside that inflammatory rhetoric and examine how this legislation impacts Hawai'i.

The central argument the governor makes against reform is that it would "impose massive unfunded mandates on state governments." Fortunately for all of us in Hawai'i, that's just not the case.

Here are the facts:

For the Medicaid expansion being proposed in the legislation, 100 percent of it would be covered for two years beginning in 2013, and 91 percent of it afterward by the federal government; $23.5 billion is being provided to the states to cover Medicaid costs across America, and Hawai'i will receive a substantial chunk. In addition, the federal cost-sharing rate will go up from 57 percent to 66 percent. At a meeting in November of the nation's Medicaid directors, the group was unanimously in favor of this provision. (The Washington Post, Nov. 15).

According to the Congressional Budget Office, the percentage of costs covered by the federal government for the Children's Health Insurance Program would rise from 70 percent to 93 percent.

The strangest attack was Lingle's criticism of our congressional delegation for securing tens of millions of additional dollars for needy public hospitals, called Disproportionate Hospital Share, or DSH. Lingle complains that "we can only receive those federal DSH funds if we put up additional matching state dollars, which are in very short supply."

Here's the thing that's how federal grant programs work. If a state wants to use federal dollars for a community benefit, it typically provides a matching share, in this case less than 50 percent. With the exception of the stimulus, there's no free lunch for state governments, but this is a heavily subsidized lunch. For the governor to pick this, of all things, to complain about, is puzzling.

Lingle does make several reasonable points, however, and it's critical to highlight areas of potential bipartisan agreement. She appropriately points out that the medical costs for Micronesians who reside in Hawai'i through the compact entered into by the United States should be covered federally, and she's right in focusing on the need to fix inefficient practices and abuses within the Medicare and Medicaid systems.

However, lost in all of this discussion is the cost of doing nothing. Simply put, we have a national health care system that doesn't provide health care to tens of millions of Americans, is literally bankrupting people and businesses, and is straining Hawai'i's budget. According to the Robert Wood Johnson Foundation, Hawai'i could expect Medicaid/CHIP costs to rise by more than up to 114 percent without reform. In addition, according to the pro-reform group Families USA, more than 15,000 Hawai'i citizens will lose health coverage in the two-year period ending in December 2010. We cannot fail to act, or things will get worse quickly.

We are about to finally accomplish the goal of health care for nearly every American, and we ought to be proud of how far we have come. In addition to providing coverage for millions of Americans, it will provide subsidies to small businesses who struggle with premium payments, and it will reduce the deficit by more than $100 billion in the first decade, and by even more in the second decade. No legislation is perfect we should remember that in 1935 the Social Security Act originally excluded most women and minorities, but it was fixed over time. However, this is indisputably the most progress we've made on the vexing problem of health care in decades. That's why our congressional delegation, both daily newspapers in Hawai'i, our president and most health care policy experts say it's critical to pass this bill.

Predictably, the Republican Party establishment will crow about socialism and a loss of freedom, as they did when Medicare and Medicaid were passed; but just as predictably, this program will work in making the lives of Americans healthier.