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Thursday, October 30, 2003



Lingle presents ideas
for helping uninsured


Gov. Linda Lingle presented several administration proposals to expand health insurance coverage yesterday at a forum presented by The Hawaii Uninsured Project.

There are approximately 120,000 people in Hawaii who lack health insurance. Who they are and what to do about them were among the topics discussed at the conference hosted by a coalition of organizations and individuals looking for ways to address the growing problem.

Lingle conceded there are no easy answers to the problem.

"This is the one area of public policy that perplexed me the most in my campaign," she said.

But Lingle is hoping legislators will consider several administration proposals next session.

One of them includes a waiver of the 4 percent health insurance premium tax, which Lingle believes will bring more competition to the state. Hawaii's insurers who have nonprofit status -- organizations such as Kaiser Permanente and Hawaii Medical Service Association -- are exempted from the tax. Any for-profit insurers thinking about entering the Hawaii market would be subject to that tax. Lingle believes without an exemption, it will be difficult to encourage competition among insurers in Hawaii.

"You are at a 4 percent disadvantage. It should be a level playing field when it comes to health insurance in Hawaii," she said.

Lingle would also like to increase the amount of money allocated to community health clinics such as Kalihi-Palama Health Center, which serve the uninsured population. The centers receive several million dollars in operational funding each year. Lingle would not be specific on how much additional money they could receive.

Lingle also proposes making it possible for business and trade groups such as the Chamber of Commerce and Small Business Hawaii, whose membership is primarily made up of small businesses, to negotiate directly with insurers for coverage as a group. Over the years, small businesses, and especially the self-employed, have complained it is increasingly difficult to obtain coverage comparable to larger group health plan rates and benefits.

But Hawaii health insurers say they have tried to offer such association plans before with little success. The problem is the association plans tend to attract those in need of medical care, they say. As a result, premiums steadily increase over time making the plans unaffordable to those they were originally set up to help.

"Association plans, like the individual plan market, have one identifying characteristic. They are voluntary and because they are they are likely to attract a higher risk profile, which in turn results in higher premiums," said Chris Pablo, Kaiser director of corporate communications.

Another problem making the plans financially unstable is the tendency for those who are enrolled to leave and re-enter the plans more frequently, HMSA spokesman Cliff Cisco said.

"We've tried it before and in every case there are inherent administrative problems that made them difficult to underwrite," he said.

Paul Tom, president of Benefit Plans Hawaii, who consults with large employer groups and union trust funds on health care benefits, said there is some merit in the administration proposal. But, he said, they would also companies with questionable track records. Such plans need close scrutiny and regulation by the state to prevent abuse, he said.

Tom recalled instances where plans purporting to be specifically tailored for small businesses have marketed their services in Hawaii, but later left town with a stream of unpaid claims in their wake.



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