[ OUR OPINION ]
HMSA’s rate hikes
are sign of greater
health-care maladySMALL-business owners whose health-insurance rates will increase by an average of about 5 percent come July may take consolation in the fact that the increases are less than in the two previous years. Even so, the boosts will cut into profits already thinned by the state's slumping economy.
THE ISSUE The state's largest health insurer again increases premium rates.
Further, the increases are only a symptom of the disease that plagues the health-care industry in Hawaii and throughout the nation: namely, runaway costs. The state's move to oversee rate-setting practices in Hawaii through a bill that the state Legislature approved last session is a small bandage on a huge rupture. The insurance industry, health-care providers, employers, consumers and state officials should attempt to remedy the entire disorder.
The matter close at hand, however, is the announcement by the nonprofit Hawaii Medical Service Association -- by far the largest insurance provider in the state, with 67 percent of the market -- that it will increase rates in various categories.
The biggest raises, curiously, will be for HMSA's Health Plan Hawaii, a managed-care program usually less expensive because of the restrictions in choice of doctors and fixed co-payments. Increases for that plan will average 7 percent, compared to an average of 5.6 percent for the less-restrictive Preferred Provider Plan.
HMSA says increased use and growing membership in the plan is the reason for the increase. The plan's enrollment has risen from 110,000 at the end of 2000 to 130,000 today and came at a time when a number of HMOs were leaving the market.
The oversight bill, which Governor Cayetano is expected to sign, allows the state insurance commissioner to examine how insurers set rates. Because it does not take effect until January, the anticipated law will not apply to the current increases. However, HMSA, which lobbied vigorously against the measure, will have to open its books for future rate changes. No one is casting doubt on whether HMSA or other insurers are justified in raising rates, but the new law will foster a more open system so that employers can review their costs and see where they may cut expenses in providing employees with the health insurance that state law requires. Meanwhile, the state and others should be formulating a wide examination of health-care costs to fix the problem at its many sources.
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HELPING a financially ailing cultural center may earn a politician splendid campaign points, but obligates taxpayers improperly beyond the election year. State officials who have yet to review Sen. Brian Taniguchi's insertion of an $8 million bond authorization into the state budget to buy a Moiliili site should refuse the issuance. Taniguchi’s rescue
goes overboard
THE ISSUE The senator inserts into the state budget an $8 million land purchase for a financially troubled cultural center.
Taniguchi, the Ways and Means Committee chairman whose district runs from Moiliili to Pawaa, placed the bond item into the Senate's version of the budget. The entry would essentially allow the state to borrow up to $8 million to acquire the land under the Japanese Cultural Center, which is having trouble meeting its mortgage payments. Taniguchi's plan remains largely undefined, but would include leasing the property to the center for as little as $1 a year.
The purpose of the 15-year-old center -- to preserve and promote Japanese culture in the islands -- is commendable. However, as a nonprofit organization, it already receives tax exemptions from the state and should look for other financial sources to carry out its mission. It may be appropriate for the state to provide a grant, but the center should not expect taxpayers to bear as large a burden as land acquisition, which amounts to a subsidy.
To be fair, the center did not ask Taniguchi directly for help. The senator explained that he had seen a magazine article about the center's financial problems and had talked "off and on" about the situation with the Japanese Chamber of Commerce, one of the center's tenants and a key force behind its establishment.
While Taniguchi's effort may be strictly altruistic, it places the state under considerable financial obligation. The plan must still undergo analysis by several state agencies before any bonds are sold to raise the purchase price. They should reject it as of questionable fiscal value and as an ostensible political maneuver.
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Published by Oahu Publications Inc., a subsidiary of Black Press.Don Kendall, Publisher
Frank Bridgewater, Editor 529-4791; fbridgewater@starbulletin.com
Michael Rovner, Assistant Editor 529-4768; mrovner@starbulletin.com
Lucy Young-Oda, Assistant Editor 529-4762; lyoungoda@starbulletin.comMary Poole, Editorial Page Editor, 529-4790; mpoole@starbulletin.com
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