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Health Insurance? No need: Abercrombie promises to dump Prepaid Health Care Act
By Andrew Walden @ 6:34 PM :: 23062 Views :: Health Care

by Andrew Walden   October 1, 2010

For decades, Hawaii’s 1974 Prepaid Health Care Act has been credited with giving the Aloha State the nation’s lowest proportion of uninsured residents.  The Act’s employer mandate requiring health coverage for employees working in excess of 20 hours per week means that about about 90% of Hawaii residents are covered.

Now Neil Abercrombie wants to scrap it.

As President Obama’s Healthcare reform worked its way through Congress, Hawaii's Congressional delegation inserted provisions to protect the Prepaid Health Care Act from being nullified or superseded by Obamacare.  The Star-Advertiser September 23 editorialized “Protect Hawaii health care law”:

U.S. Rep. Mazie Hirono took measures to assure that Hawaii would be exempt from the federal law in areas where the state law is stronger. However, further congressional action may be needed to change the ERISA exemption and allow the Hawaii Legislature to eliminate the termination clause from the state law. State and U.S. legislators should take the necessary action before 2014 arrives.

Senator Dan Inouye December 24, 2009 assured Hawaii voters,

Our Hawaii is home to the nation’s most comprehensive and effective health care plan.  Hawaii has among the lowest number of uninsured at 10%, our insurance premiums are among the lowest, and our residents live longer than our mainland counterparts.

The state Prepaid Health Care Act of 1974 ensures that every employee in Hawaii working at least 20 hours a week receive health insurance from their employer.  Hawaii received an exemption to ensure Hawaii’s employer mandated health-care law would not be rolled back.

The Prepaid Health Care Act has bi-partisan support.  KITV reports that Republican gubernatorial candidate Duke Aiona said yesterday “he will do everything he can to retain the provisions of Hawaii's Prepaid Healthcare law.”

But out of step and nearly alone, Abercrombie is ready to gut the 1974 law and go with the weaker and more costly requirements of Obamacare. 

No wonder the Washington Post reports, “for all the years he worked with Abercrombie in Washington, (Senator Daniel) Inouye said that the two were essentially strangers."

Abercrombie didn’t fool Inouye, but he apparently thinks he can fool Hawaii voters.  Notice the subtle use of past tense as he tries to slip this by an audience of Kaiser Permanente managers.  The Star-Advertiser reports:

"(The Prepaid Health Care Act) was the most progressive of its time, but events have caught up with us, in the sense of costs of health care simply getting beyond us," Abercrombie, the Democratic candidate, said of the state law. "So we're most likely going to have to review whether the fundamental premise of the health care -- the division between employer and employee -- perhaps needs to have another look."

Abercrombie said the state might have to look at whether companies and workers should be placed together in one big health insurance pool.

The federal health care reform law, for example, calls for health insurance exchanges to help make insurance more affordable for individuals and small businesses.

KITV reports:      

"So it is quite clear, in terms of the Prepaid Healthcare Act, we may need to have a review and a revision of it likely," said Abercrombie.

Abercrombie's comments echo his “New Day” campaign platform:   

“…the Prepaid Healthcare Act that has served Hawaii so well now must be revisited. A new vision of providing healthcare to everyone in Hawaii must emerge….”

Times have changed radically. We are living longer with more health complications, our struggling economy has more small- and medium-sized employers, new technologies and pharmaceuticals are in high demand, and costs have exploded in ways we never imagined as more people are living longer than ever before.

Is your longevity a problem to be solved by Neil Abercrombie? 

Our system of healthcare is fragmented, medical professionals are finding it harder to build a career in Hawaii, insurance costs are crippling business here, rising costs threaten the solvency of the retirement systems, it is harder to make an appointment with your doctor, co-payments are rising, and more people, particularly the most vulnerable in society, are finding it nearly impossible to access any health care at all.

None of this is caused by the Prepaid Health Care Act.  A key reason for Hawaii’s doctor shortage is the state’s low level of Medicare/Medicaid remuneration.  Abercrombie—in his 20 years in Congress—failed to pressure the US Health and Human Services Centers for Medicare and Medicaid Services to amend Hawaii's Medicare/Medicaid “Geographic Practice Cost Indices (GPCIs)” which factor along with the “Resource-Based Relative Value Scale (RBRVS)” to ensure that doctors in Hawaii are deeply underpaid

A related problem is that the Hawaii State Legislature has refused to join with other states in raising Medicare/Medicaid reimbursement rates to physicians and hospitals under HRS 346-59.  This is due entirely to a misguided effort by Hawaii Democrat legislators to keep the failing HHSC on life support in order to prevent divestiture of the HHSC hospitals into independent non-profit medical providers.  A divestiture plan proposed with the backing of HHSC senior management by Sen. Josh Green went nowhere last session.  If HHSC were broken up, the 4,200 hospital workers would no longer be quasi-state employees.  They would be freed from the dominion of the HGEA and UPW.

Abercrombie’s solution to this problem?  Chuck your private employer-provided insurance out the window and bring in the inferior Obamacare system which promises to increase the number of uninsured.  The burden for saving the HGEA/UPW 4,200-person dues stream falls squarely on the backs of Hawaii’s lowest paid part time and full time workers—those most likely to lose their insurance if employer mandates are nixed in favor of the inferior Obamacare “exchanges” which require individuals to buy their own insurance or pay a heavy federal tax penalty.

Abercrombie is simply misinformed about the HHSCs chances under Obamacare.  The Wall Street Journal August 29 explains:

“Faced with mounting debt and looming costs from the new federal health-care law, many local governments are leaving the hospital business, shedding public facilities….

“Local officials also predict an expensive future as new requirements—for technology, quality accounting and care coordination—start under the overhaul, which became law in March.

“Moody's Investors Service said in April that many standalone hospitals won't have the resources to invest in information technology or manage bundled payments well. Many nonprofits have bad credit ratings and in a tight credit market cannot borrow money, either.  Meantime, the federal government is expected to cut aid to hospitals….”

In spite of this, Abercrombie’s campaign platform portrays abandonment of the Prepaid Act as a step to “Develop a System of Universal Healthcare.”  It is exactly the opposite.  In the fine print, Abercrombie focuses squarely on managing the State’s finances so “costs are controlled so that we can collectively afford the system and pay for it in a way that is fair and sustainable. We need to create efficiencies out of the current incoherence in our system, create incentives and opportunities for cost-effective preventive healthcare….”

It’s all about the money.



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