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7.8% In Hawaii Are Uninsured, Data Help Fuel Debate Over Health Reform, Public Option

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Location: Honolulu, Hawaii

New figures released last week showed roughly one out of every 13 people in Hawai'i goes naked when it comes to health insurance, either not being able to afford the coverage or choosing to do without it.

The news, along with the disclosure that there are 46.3 million uninsured nationally, was more fodder in the debate for health care reform.

It also provided a fresh spotlight on one of the more debated ideas being proposed by President Obama: a government-sponsored health plan that would help provide coverage for the uninsured.

Locally, there are both supporters and detractors for a public plan that would compete alongside private insurers for uninsured and small-business customers.

"It provides accountability and competition for the private insurance companies," said U.S. Rep. Mazie Hirono, who favors the public option.

"It doesn't represent a takeover of insurance. The private sector will still be there providing insurance."

Others have their reservations about the proposal.

"I'm very concerned about a public plan," said John Henry Felix, chairman and chief executive officer of Hawaii Medical Assurance Association, a Honolulu-based insurer.

"As one who's been in government, I'm very pessimistic about their ability to operate an efficient health care system."

Health reform has taken centerstage for Obama, who addressed a joint session of Congress Wednesday, seeking to regain momentum for the reform effort. Obama wants solutions to vexing problems with health care, including spiraling health care costs and what some see as a national embarrassment -- people unable to get or afford coverage in the world's most affluent country.

Hawai'i does better than most states when it comes to health insurance, primarily because of the state's 1974 Prepaid Health Care Act that requires employers to provide health care coverage for employees who work at least 20 hours a week for four consecutive weeks.

That and other programs have resulted in 92.2 percent of the state's 1.26 million residents in 2008 being insured, the second-highest percentage in the U.S. behind Massachusetts.

Still, 7.8 percent of Isle residents don't have health coverage. That means 98,000 people went without the insurance, or about 1 1/2 times the population of Kaua'i.

Those going without health insurance contribute to the overall cost of health care because many of the uninsured don't seek preventive care. Some let medical problems fester to the point where they seek help at emergency rooms.

Such visits are costly, and in some cases, result in unpaid bills for hospitals that ultimately work their way into premiums paid by those who have coverage. The U.S. Department of Heath and Human Services estimates Hawai'i providers will lose $208 million to bad debt this year, which in turn will be passed to the insured as a "hidden premium tax."

SOARING PREMIUMS

The spiraling health care costs can be seen in one benchmark, average premiums paid by small businesses to the Hawai'i Medical Service Association. Those have risen about 112 percent, or more than double, over the past decade.

That was about 3.5 times more than Honolulu inflation increased during the period and a little less than two times the rise in Hawai'i personal income.

Nationally, there are similar or worse examples, along with horror stories about insurance being denied because someone had a pre-existing condition, or was dropped from coverage.

In his speech, Obama gave an outline of his reform proposals, including the government-sponsored plan, a requirement that everyone have health insurance, mandating health coverage through employers and many other items.

Some of his speech was criticized for being short on details. But Robert Hiam, president and chief executive officer of HMSA, the state's dominant health insurer, said he couldn't argue with much of what the president discussed.

"We believe there is a role for government in providing health coverage for those that are the most fragile in our society," said Hiam, noting Obama's vision calls for the plan to be self-sufficient and not supported by taxpayer money and only be available to people who cannot get coverage in the private marketplace.

"I didn't disagree with any of the principles that he put out there."

VOICING OPPOSITION

Hiam's view of the public plan goes against the stance of the Blue Cross Blue Shield Association, the national federation of independent health plans to which HMSA belongs. Blue Cross' national Web site includes links towww.GetHealthReform Right.org, which slams efforts to create a government-run health plan.

It includes a form letter that can be e-mailed to Hawai'i's congressional delegation by clicking on buttons and filling out some personal information.

The e-mail includes a paragraph saying, "I don't want federal bureaucrats making medical decisions for me and my family" and "forcing people like me to lose their current coverage and move to a new government plan is not the answer."

Obama has said no one will be forced to change what they have. Hirono said she has been taken aback by reform opponents playing on people's fears.

"I find it particularly objectionable that our seniors are being targeted for scare tactics," Hirono said.

Some insurers are critical of how Obama has characterized their business. The president's Wednesday speech included examples of an Illinois man dying because an insurer discovered he hadn't reported gallstones, delaying his treatment.

In another example, Obama talked about a Texas woman who had her insurance suspended because she forgot to declare a case of acne, with her breast tumor doubling in size before the coverage was reinstated.

OTHER REFORMS

HMAA's Felix feels there should be other items looked at in reform and doesn't like the criticism.

"The administration has demonized the insurance industry," he said.

"I'm very concerned about a public plan. The government can't even get Medicare and Medicaid right. They cannot do it as well as the private sector."

He said the government's reimbursement rates for the two programs are below doctors' and other health care providers' costs, forcing the providers to request more reimbursements from private insurers. Felix also favors a strong look at insurance fraud, medical tort reform and programs promoting healthy lifestyles.

"The administration appears to be more concerned about doing something rather than doing it right," he said.

Summerlin Life and Health Insurance Co., another insurer, and the Hawaii Medical Association, a group representing physicians, said it is too soon to comment on reform. They said they have to see what emerges as Congress works on five different proposals, one of which may call for a health insurance co-operative rather than a public plan.

"I'm not sure how that would work," said Hawai'i Insurance Commissioner J.P. Schmidt, saying more information is needed.

"I think a lot of other people aren't sure and that's why so many questions have been raised."

He said his office is monitoring the reform efforts, including whether the state will earn an exemption for the Hawai'i Prepaid Health Care Act. He said the state also has had its own efforts to address the issue of people going without insurance, including getting more children into Medicaid insurance coverage and getting a law passed allowing individuals to get coverage if they are members of associations that provide health care plans.

Hiam, who insures about 700,000 Hawai'i residents, said he wants to take Obama's pledges at their face value. But he said he does have some questions about whether the reforms the president is proposing are enough to pay for the $900 billion price tag over 10 years.

But he said something needs to be done, including figuring out how to curb surging costs, which he said are unsustainable.

"We just can't continue to have these kind of increases out into the future."


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