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Isle residents need more details about health reform


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POSTED: Tuesday, November 03, 2009

Hawaii's 35-year-old health care law should remain intact in the event of enactment of federal health care reform, Hawaii's congressional delegation has assured. The particulars of how the federal legislation would affect Hawaii around the edges remain questionable, and the state's delegates should be more informative.

The islands have deserved praise as home of the nation's most comprehensive and effective health care plan. Hawaii's health insurance premiums are among the lowest in the country, Medicare costs per beneficiary are the lowest and residents live longer than people in mainland states.

U.S. Rep. Neil Abercrombie says the congressional delegation has been promised that where any provision “;gives less than what the (1974) Prepaid Health Care Act does in Hawaii, Hawaii law takes precedence”; because Hawaii's law “;is so good, so ahead of its time.”;

If such an waiver is realized, it would require that all employers in Hawaii continue to be responsible for providing health insurance coverage to their full-time employees — those working at least 20 hours a week — and bear at least 50 percent of the cost in most cases.

Some proposals in the congressional legislation could be costlier on employers, and thus presumably applicable, in Hawaii. For example, the House version would require employers to pay 72.5 percent of the costs of benefits for employees who are single and 65 percent for employees with families.

Federal legislation that would let employers with 50 or fewer employees, or with payrolls of less than $500,000, off the hook would not be enforced in Hawaii. Elsewhere, the Congressional Budget Office has projected that 2 million to 3 million employees would lose their employer-sponsored insurance because of their status as small businesses.

The Senate bill would require employers to pay 60 percent of the employee's insurance premium — a larger share than required under Hawaii law — but would exempt employers with fewer than 25 employees; Hawaii has no small-workforce exemption, although small businesses could qualify for federal credits offered in the Senate bill.

Nor would Hawaii's 294,000 uninsured be exempt from a congressional mandate that they must purchase health insurance — just as American motorists in every state must buy car insurance — or pay penalties. That is among the key purposes of the legislation and obviously should be in force in Hawaii.

After Standard Oil won a court decision that invalidated the Hawaii health law in 1977 as a violation of the federal Employee Retirement Income Security Act, Hawaii's congressional delegation secured an exemption from ERISA.

Hawaii's members of Congress this time are wisely preempting such a potential lawsuit. As the legislation goes forward, they should provide further information about how it will add to Hawaii's state health care law without being onerous to small businesses.