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Gov. Lingle calls
for insurance,
TV rebates

A health insurance rebate
could return up to $67M,
but it is unclear who
would get the money

Gov. Linda Lingle wants Hawaii's health insurers and cable TV operators to offer rebates.

In a speech before the Small Business Hawaii conference at the Ala Moana Hotel yesterday, Lingle said she is drafting legislation to force both cable television operators and health insurers, such as Hawaii Medical Service Association, to offer rebates on their surplus funds.

The rebate could return as much as $67 million to consumers or businesses, Lingle said.

Still up for discussion, Lingle said, would be where the refund should go. Lingle's staff was still deciding if the rebate should go to the workers covered by the policy or the employer who usually pays the majority of the health care premium.

If workers get the rebate, it could be $100 a person. But if a company with 100 employees receives the rebate, it could mean a $10,000 return, according to Lingle.

The governor said that under current law, health care insurers can hold in reserve 50 percent of their annual expenses to cover unanticipated claims, expenses and other business fluctuations.

But, Lingle says the reserves should be capped at 30 percent of annual expenses, with the excess rebated.

Health industry officials said they had some concerns about the proposal.

Clifford Cisco, HMSA senior vice president and spokesman, said the HMSA board already reviews the amount of money held in reserve and has voluntarily given rebates three times.

"It was a decision made by the board of directors, which represents the public. It is unfortunate that such a decision would be politicized," Cisco said.

HMSA was still reviewing the Lingle proposal, Cisco said.

After the economic downturn triggered by the Sept. 11, 2001, attacks, HMSA gave rebates to both employees and employers.

The reserve fund rebate was estimated at $50 million.

At that time, HMSA had come under fire for the high level of financial reserves it maintained, about twice as much as required by the state Insurance Division.

The bill is expected to be part of the Lingle administration's package submitted to the state Legislature, which convenes Wednesday.

Cable television operators also would be required to give rebates under another Lingle proposal.

Cable operators currently pay the state an annual fee, which is then passed along to consumers. Because the state has collected more than is needed to cover the cost of administering cable television regulations, Lingle argues that the surplus should be returned.

The surplus could be as much as $1 million, Lingle said.

Other business legislation suggested by Lingle yesterday included proposals to reform workers compensation laws to cut fraud and increase penalties for those who cheat the system.

Office of the Governor
www.hawaii.gov/gov/


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