Lawmakers move Families of four in Hawaii who earn less than $60,913, or families of two earning less than $40,103, could qualify for the Medicaid program's discounted prescription drugs under a bill approved yesterday by two state Senate committees.
to curb costs of
insurance, drugs
By Bruce Dunford
Associated PressIt was one of several measures advancing at the Legislature intended to curb the rising costs of medical insurance and prescription drugs.
The Senate's Consumer Protection and Health Committees approved a measure to regulate medical insurance rates and two bills to broaden the number of people who can get discounts on drugs.
Meanwhile the House, over the objections of several Republicans, gave preliminary approval of similar measures, all of which now go to the money committees for further consideration.
Consumer Protection Committee Chairmen Ron Menor in the Senate and Kenneth Hiraki in the House said Hawaii's two biggest medical insurers -- the Hawaii Medical Service Association and Kaiser Permanente -- have a virtual monopoly with no oversight over the rates they charge. "I'm very concerned about the fact that we really have a very uncompetitive market at present," Menor said. "We have health insurers who I think have exercised significant and some would say monopolistic control."
The largest insurer, HMSA, avoids $47 million a year in premium taxes paid by other insurance companies and is exempt from rules on insurance company investments, agency licensing and rate regulation, said Menor, D-Waipahu-Crestview-Mililani.
"I feel it's only fair that in exchange for these benefits and exemptions under state law, that the state have the ability to have some sunshine into the rate-making process," he said.
"I think it would ensure that rates charged are appropriate and not excessive" and will let the state set up a system "where premiums would bear a reasonable relationship to costs," Menor said.
Sen. Bob Hogue, D-Kaneohe-Maunawili-Enchanted Lake, opposed the bill as "setting a very dangerous precedent by now, all of a sudden, giving the insurance commissioner super powers and allowing for regulation of this industry."
Sen. Avery Chumbley, D-East-Maui-North Kauai, said he had "grave concerns" about the bill.
"When you talked about letting sunshine in, I think this is more than sunshine, it's solar hot spots and I don't know if I want to get quite that close to the sun," Chumbley said.
While disclosure and oversight are now lacking in the rate setting by the health care providers and rate justification is deserved, "I'm not comfortable to stand behind rate regulation right now," he said.
In House debate in a similar measure, Rep. Charles Djou, R-Kahaluu-Kaneohe, opposed it.
"If we want attack the rising cost of health care in our state, we should start by eliminating the general excise tax on medical services" and increase competition by extending the mutual benefit society and nonprofit tax exemption enjoyed by HMSA and Kaiser to for-profit insurers who could then afford to enter the Hawaii market, he said.
Hiraki, D-Kakaako-Downtown Honolulu, said in markets where there is little or no competition, it becomes incumbent on the government "to serve as a watchdog to protect against companies using their unchallenged status to dictate unreasonable prices, terms and conditions."
When Hawaii had numerous health plans, such regulation was not needed, but with the departure of competitors "the two remaining major players have raised premiums for small businesses by almost 20 percent in just two years," Hiraki said.
Besides allowing more people to get drugs at the federal Medicaid rate under a Senate bill, both the House and Senate advanced measures for a state program to buy drugs in bulk to get lower prices.
Menor said one Senate bill would follow the law in Maine, which won a federal waiver to extend Medicaid's drug discount program. In Hawaii, it would serve some 200,000 Hawaii residents who are uninsured or underinsured and not old enough to qualify for Medicaid, he said. "The sad thing is that I know there are people out there who either are going without prescription drugs or cutting back because they can't afford it," Menor said.
In the House, several Republicans opposed the bill to create a state-run bulk buying pool to negotiate with manufacturers to get discounts on selected prescription drugs.
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