Wednesday, February 18, 2004

Kaiser to exit
Kauai market

The insurer has provided Garden Isle
coverage since the mid-1990s

Health care organization is pulling out of Kauai, largely because of the cost of contracting services there.

It will cease to offer its insurance plan to commercial employer groups there effective Dec. 31. State and county employees whose plan coverage begins July 1 also will be affected.

Kaiser covers about 4,700 people on Kauai, or roughly 7.8 percent of the island's resident population.

The insurer, which never had a physical presence on the Garden Isle, has provided health coverage to its members since the mid-1990s under a contractual arrangement with Kauai Medical Group for physician services and Wilcox Hospital for in-hospital services.

Most of Kaiser's Kauai customers are state and county employees whose health coverage comes under the state Employer Union Trust Fund. The EUTF took over July 1 from its predecessor, the State Health Fund. As part of the health fund contract, participating insurers had been required to provide statewide coverage.

"That (contract requirement) was the primary reason for going there," said Chris Pablo, Kaiser spokesman.

But under the new EUTF contract, statewide coverage is no longer a requirement, said Mark Fukuhara, administrator for the fund.

With the open enrollment period for state and county employees coming up in April, the change will be included in coverage option booklets going out to employees in March, Fukuhara said.

Kaiser also covered a small group of commercial business customers with branches statewide and provided coverage for some national employers, Pablo said.

Pablo said the primary reason for the withdrawal from Kauai was the cost of contracting services.

"For us, it's difficult to provide our brand of care and service when we are not fully integrated," he said.

"When we went in there, there wasn't a need for us to add to the existing medical delivery system. There has been adequate number of hospital beds and physicians, with the exception of some specialty areas, which Kauai residents would come to Oahu or the mainland for anyway," he said.

With Kaiser deciding to pull out of Kauai, Hawaii Medical Service Association is the sole insurance option for state and county employees on the island. Two other insurers, HMAA and University Health Alliance, offer coverage on Kauai but are not an option for those government workers.


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