[ OUR OPINION ]
LAWMAKERS anxious to avoid public criticism for a do-nothing session should approve the bill that would give the state the authority to look over how health insurers set their rates. Passage of the measure would look good on a campaign brochure while accomplishing a higher purpose -- helping Hawaii consumers and business owners understand the cost of health insurance. Health insurers should
open their books
THE ISSUE A measure to open information about setting rates for health insurance hits a rough spot in the state Legislature.
A misconception about the bill is that the state would be setting the rates for health insurance. The proposal simply allows the state insurance commissioner to view how providers calculate rates. With this information, the insurance commissioner can determine whether increases are warranted. The data also would help employers control their insurance costs.
State law requires Hawaii employers to purchase health insurance for their workers, a law that has been praised around the country as a way to extend health care to as many people as possible. Because of the law, the state has a clear obligation to ensure rates are fair.
The law says employers must provide insurance for people who work at least 20 hours a week for four consecutive weeks. However, as the cost of insurance has risen, employers -- particularly small- business owners -- have become hard pressed to buy the insurance. As a result, they have decreased work hours to eliminate employees from the insurance pool, defeating the purpose of the law.
The Hawaii Medical Service Association and Kaiser Permanente dominate the insurance market in the state, with HMSA holding 60 percent and Kaiser 22 percent. Both are nonprofit and do not pay state taxes. HMSA and Kaiser argue that providing the state with information about how rates are set forces them to disclose proprietary data. They further contend that having to justify their rates will be time consuming and costly. However, insurance commissioner Wayne Metcalf counters that the type of information he would need to see must be compiled by insurers for other purposes anyway.
If increases appear excessive, the commissioner would ask insurers to justify and recalculate them. Insurers dissatisfied with the commissioner's decisions would have both administrative and legal recourses.
The state's oversight may not result in lower rates for consumers and business owners. However, the vacuum of information leaves both unable to gauge whether costs are warranted and at a disadvantage when negotiating health plans.
The bill, which is largely supported in the Senate, appears to have hit a snag in the House. Proponents believe Speaker Calvin Say is standing in the way of the bill's passage. Say, who does not usually engage in arm-twisting, should send the measure out to the floor for a fair vote.
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