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by Pearl Hahn

The universal health care bandwagon is not lacking for supporters, yet a backlash within the mainstream media has been brewing. Hawaii’s Prepaid Health Care Act (PHCA), which has been in effect since 1974, requires employers to provide health insurance for employees working 20 or more hours per week.

In the Grassroot Institute’s policy paper, Hawaii’s Prepaid Health Care Act and Far-Reaching Costs, it was found that though the goal of PHCA was to cover all residents in Hawaii, the uninsured rate has actually grown since its passage. Other unintended consequences include contributing to a harmful monopoly in Hawaii’s health insurance market in which the Hawaii Medical Service Association dominates, distortion of labor trends as part-time workers do not qualify for coverage, an increase in the rate of unemployment, and growing health care costs.

The backlash began with the Federal Reserve Bank’s analysis released last month that found “an employer mandate is not an effective means for achieving universal coverage”. The Federal Reserve went as far as to suggest that there is a need for alternative approaches, assuming that universal coverage is the ultimate goal.

Hawaii’s experience should serve as a warning rather than an example for other states and the rest of the nation as Congress is now contemplating enacting a similar requirement at the federal level. All of this is part of Obama’s plan for the U.S. health care system to undergo major reform.