[lbo-talk] FWIW: Hawaii's Health Care Plan

Nathan Newman nathanne at nathannewman.org
Fri Feb 3 08:49:17 PST 2006


And federal law prohibits every other state from implementing the same policy of directly mandating that employers provide basic health insurance to all employees.

Hawaii's system was grandfathered in, but the federal ERISA law means even the recently passed Maryland law is going to have to be litigated. I've been involved in helping strategize on the drafting of state health care mandates and it's a f------ pain in the ass to design them to survive federal preemption. We all wish we could just enact variants on Hawaii's system, but we can't.

----- Original Message ----- From: "Michael Hoover" <hooverm at scc-fl.edu>

Hawaii's Health Care Plan

Hawaii's health care plan makes a basic package of health benefits available to all residents through employer-mandated insurance, supports health promotion and disease prevention, and controls health care expenditures

The plan began in 1974 with passage of the Prepaid Health Care Act, which required employers to provide health insurance to employees. Legislation in 1989 added those not covered by Medicare, Medicaid, or private insurance and emphasized comprehensive, preventive health. In 1994, health care programs for Medicaid and other low-income groups were converted into managed care plans

Hawaii was the first state to mandate universal coverage

Community rating (premiums the same for everyone in the state) has kept insurance rates affordable because costs and risks are shared equally

No employed person can be denied coverage

Health care costs have increased more slowly than elsewhere (8.1% of gross state product versus 14% of US Gross Domestic Product). This is due to several reasons:

emphasis is on primary, preventive care, and outpatient care, rather than hospitalization there are limits on construction to prevent overbuilding of hospitals competition exists within clearly defined boundaries, forcing insurers and providers to hold costs down

Basic benefits include mental health visits, alcohol and substance abuse treatments, and preventive care

Increasing use of 20% co-pays have reduced overutilization

Administrative costs are low

Mandating insurance through employment has had little apparent effect on small businesses. In all but one year since insurance has been required, the state has gained more jobs than have been lost

Hawaii ranks near the top compared to other states in life expectancy and low infant mortality.

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