Michael Keale, a medical records receptionist at Waikiki Health Center, looks at an intake form that patients must fill out before receiving low-cost medical and social services. Uninsured patients must fill out the income level portion of the form, which establishes a sliding fee for their medical visit.

Hawaii’s uninsured
population is creating
unhealthy situation

Nearly 10% of the state residents
lack coverage despite the 1974
Prepaid Health Care Act

Cindee Villegas can't deny her job as a personal trainer in Waikiki offers some decent perks -- a flexible schedule, free gym membership and a workplace that overlooks one of the world's most famous beaches.

But while her professional commitment is to keep clients healthy, she has a hurdle to her own wellness: She's uninsured.

Villegas is not alone in a nation of 43.6 million uninsured people. But Hawaii is supposed to be different.

The state's 1974 Prepaid Health Care Act made Hawaii the only state where most employees are guaranteed health insurance by law. Employees who work 20 hours or more a week for four consecutive weeks must be given coverage with a premium that costs no more than 1.5 percent their salary.

But this state -- once held up as a model for its near-universal health coverage, boasting uninsured rates as low as 2 percent -- is edging closer to the national average. Today, nearly 10 percent of Hawaii's residents are uninsured, hospitals and clinics say they're struggling to care for those patients, and small businesses are pressing for reform of the stringent 1974 laws.

"We're reaching sort of a critical stage," said state Rep. Dennis Arakaki, chair of the House health committee.

The islands' shift from an agricultural economy of large plantations controlled by strong unions, a number of blows to the state's tourism-based economy, and colossal increases in health insurance premiums have led Hawaii to this point.

Yet, the state still posts the 10th-best coverage rate in the country, according to census statistics for the three-year period from 2000 to 2002. The state with the highest number of uninsured people, Texas, has a rate 2 1/2 times Hawaii's.

"Hawaii looks like nirvana" compared to the rest of the country, said Emily Friedman, a Chicago-based health policy analyst who authored a history on the island health care system. "What's frustrating is that Hawaii almost made it."

Before the 1974 legislation, an estimated 17 percent of Hawaii residents had no health insurance, according to Joan White, executive director of the Hawaii Uninsured Project, founded in 1999 to address the growing no-insurance problem.

At the Waikiki Health Center, in the shadows of the area's world-famous beaches and mammoth hotels, roughly half the patients are uninsured and many others have insufficient coverage.

"If anything ever came up it would be a bummer," said Leslie Laing, a 40-year-old bartender in Makiki. "But there's not much I can do about it right now."

Laing had to whittle away at a $2,800 hospital bill a few years back when a gynecological problem forced a visit to the emergency room. Her 12-year-old daughter, Monica, has never been to the dentist.

The Uninsured Project estimates 58 percent of Hawaii's uninsured are employed; an estimated 7 percent are children.

The range of patients at the Waikiki center gives a glimpse of the scope of the problem: immigrants, 20-somethings, HIV patients, homeless, self-employed.

Most share the same fear of getting sick with no way to pay.

"You get sick, what do you do?" said 46-year-old Ed Berd, who recently became homeless.

Many of the same reasons given nationwide for the increase in uninsured people are echoed here: rising health care costs, an aging population and increased utilization of services. Some employees say they are illegally cheated out of health coverage, but state officials say they don't see widespread abuse.

Many Hawaii politicians, health care officials and insurance executives blame the uninsured problem at least partly on unexpected effects of the Prepaid Health Care Act, saying it leads employers to hire more part-time laborers not entitled to employer-provided insurance. But labor statistics suggest Hawaii's work force has not changed dramatically over the last few decades.

"People who hate Hawaii's Prepaid Health Care Act can blame everything on it," said Friedman. "People who love it can say it's the only thing standing between Hawaii and disaster."

There has been chatter about revising the act to ease the burden said to be placed on small businesses, particularly because of the 1.5 percent threshold on employee contributions.

"Our people don't gripe that much about the fact that they have to provide health insurance to their employees," said Bette Tatum, state director of the National Federation of Independent Businesses. It's the fact that the law is inflexible, she said.

But the specifics of the debate aren't of concern to the uninsured, who simply pray they don't get sick.

Villegas, the 22-year-old fitness trainer, responds frankly when asked how she'd handle a stack of medical bills.

"I have no idea," she said.


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