What Health Care Reform Means- H.R. 3962

by Pearl Hahn 

With the narrow passage of the Affordable Health Care for America Act (H.R. 3962) in the House, it is up to the Senate to decide whether to approve major government expansion into our lives. Unfortunately, the bill is a thinly veiled, revised form of H.R. 3200, which sparked a storm of controversy earlier this year over its costs and projected devastating effects on the economy and private health insurers.

There’s no need to look beyond our own islands to see how badly the central elements of the bill will play out on a national scale.In addition to an individual mandate forcing Americans to purchase insurance, employers will be required to provide coverage for employees or else pay a hefty penalty. Hawaii has been widely lauded as a state in which the employer mandate has effectively insured a high percentage of citizens, yet its myriad hidden costs are rarely brought to light.

Since 1974, Hawaii has implemented the Prepaid Health Care Act (PHCA), which requires that employers provide employees working 20 or more hours a week with insurance, and stipulates that any plan offered by insurers provide equal or better benefits than offered by the leading plan (with the most subscribers) in the state.

While Hawaii’s uninsured rate is among the lowest in the nation, this cannot be attributed to the employer mandate in PHCA. From the 1980s, the uninsured rate nearly doubled from a low of 5 percent to approximately 9.6 percent today. According to the US Census Bureau, Hawaii’s current uninsured rate is not statistically different from those of Minnesota, Wisconsin, Iowa, and Maine, none of which implement an employer mandate.

Hawaii also suffers lack of competition among insurers and abysmally low physician reimbursement levels. The state Blue Cross Blue Shield, or Hawaii Medical Service Association (HMSA), dominates nearly 70 percent of the insurance market, a monopoly protected by the second directive of PHCA. HMSA’s market share increases to 85 percent for the more popular PPO’s. Consequently, an estimated 90 percent of Hawaii doctors participate in HMSA networks, as opting out would be the equivalent of unemployment.

The Hawaii Medical Association, an organization of physicians, recently sued HMSA due to unfair reimbursement practices. Despite reaching a $128 million settlement in 2007, doctors are still leaving the islands in droves. Kauai, Molokai, and the Big Island have no neurosurgeon. In Honolulu, only two orthopedic surgeons are on-call. The only one acute care hospital on Maui–run by the state, no less– has come under fire for poor fiscal management and dangerous conditions.

Hawaii’s critical doctor shortage and lack of health coverage choices for state residents render its health care system anything but ideal. While we may be 5,000 miles from Washington, it’s not far enough to escape the taxes, penalties, and unemployment that will skyrocket from harmful policy.

Pearl can be reached at pearl@grassrootinstitute.org

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