Stop House from killing best version of health insurance rate oversight bill
OUR Legislature's failure last year to prevent the health insurance rate regulation law from sunsetting was nothing short of a disgrace. For highly questionable reasons, it appears that the Democratic leadership of the House, evidently House Speaker Calvin Say, probably with the help of conferees Robert Herkes and Alex Sonson, are posed to kill passage of Senate Bill 12 HD2, a version similar to the law that existed and was successfully enforced by the insurance commissioner before it was allowed to sunset in July 2006.
If these representatives, and any other Democrats who aid them, bring about the failure to pass this bill, they should be drummed out of the Democratic Party!
In Hawaii, the Hawaii Medical Service Association dominates the regular health care market (Kaiser dominates the managed health care market). As the Star-Bulletin reported on March 20, HMSA, "with $2.1 billion in revenue last year paid CEO Bob Hiam a $620,000 salary and $497,117 performance bonus, or 0.05 percent of annual health plan revenue." Nine other top executives earned total salaries plus bonuses amounting to between $829,989 and $288,969 during the same year. Notwithstanding alleged operating losses during the period, bonuses for the 10 top officers ranged from $68,291 to $497,117, with only three of the 10 receiving less than $100,000.
In addition to their reported salaries, the Legislature also might wish to inquire whether HMSA executives derive additional swollen income from HMSA's for-profit subsidiaries, valued at $31,253,000 in its most recently reported financial statement. HMSA also holds an enormous reserve of more than half a billion dollars (reported as $567,600,000 in 2006). Notwithstanding its commanding wealth and fat salaries, as a so-called "mutual benefit society" HMSA enjoys the luxury of being exempt from state, county and municipal taxes, giving it a substantial competitive advantage over health plans, such as for-profits, which are not mutual benefit societies.
In spite of this wealth and commanding position, HMSA has systematically reduced the reimbursements paid to the dedicated and highly educated physicians who actually provide our health care, causing too many of them to contemplate leaving Hawaii. All too often, it has denied vital medical benefits, particularly those at the cutting edge of medicine, to members in dire medical need. By amending its bylaws (in November 1998) it also substantially weakened the ability of HMSA members to select board members, to call meetings and to amend the HMSA constitution and bylaws to remedy some of these problems.
One is inclined to ask, for whose "mutual benefit" is HMSA being run?
In their legislative testimony, the courageous members of our Insurance Division have clearly and succinctly explained why effective health insurance rate regulation in Hawaii is absolutely essential for the protection of our health care consumers: to put an end to the exodus of highly qualified physicians; to create a competitive market for health care in Hawaii; to assure the payment of fair reimbursements to health care providers; and to meet the state's considerable responsibility to those employers the state requires to purchase prepaid health insurance to ensure that health insurance rates are adequate, not excessive and not discriminatory.
I also salute the Star-Bulletin for calling for the passage of effective health insurance rate regulation. (Editorial, April 12).
Please, please call your state legislators, particularly your House member, and urge him or her to do all possible to insure the passage of SB12 HD2, re-enacting the law as it was before it was allowed to sunset last year. A separate call to House Speaker Say also would be helpful.
Tell those you call that their failure to pass effective health insurance rate regulation, as it was before the law was allowed to sunset last year, would invite disaster for our health care system. Tell them, also, that exclusion of Kaiser from the coverage of the rate regulation law also is inappropriate, since there is no other way to ensure that Kaiser's rate increases are not excessive, inadequate or discriminatory.
Finally, seek their assurance that they will do everything they can to insure that, through clever manipulation surrounding a conference committee, as occurred last year, this bill is not emasculated.
Richard S. Miller, professor emeritus at the University of Hawaii William S. Richardson School of Law, wrote this commentary on behalf of himself, the Kokua Council, the Hawaii Coalition for Health and the Hawaii Congress of Physicians.