BY JIM DOOLEY –In the home state of President Barack Obama, government officials and healthcare executives were all smiles Thursday over the U.S. Supreme Court decision favoring Obama’s national health insurance initiative.
Gov. Neil Abercrombie, a friend and strong supporter of Obama, said earlier this month the state would proceed to implement key provisions of the national plan – formally titled the Patient Protection and Affordable Care Act and informally called Obamacare – regardless of how the high court ruled.
“The Affordable Care Act is our ally in Hawaii to provide health care for everyone.” the governor said in a news conference today.
Abercrombie noted that Hawaii was in the forefront of requiring health insurance for a large segment of its population with passage of the state’s Prepaid Health Care law in 1974.
That legislation requires businesses to arrange health coverage for their employees and their families. Costs are shared between employers and workers.
Beth Giesting, head of a healthcare planning initiative in the governor’s office, said there are some 83,000 Hawaii residents who
aren’t covered by a health plan now but will have to be covered by January, 2014.
This “gap group” includes individuals who don’t financially qualify for Medicaid benefits provided to the very poor; part-time employees who work fewer than 20 hours per week; and others who simply don’t want to pay for health insurance.
Some 40 per cent of the gap group will qualify for Medicaid under expanded coverage rules contained in the new federal law. Costs of that extra coverage will initially be covered by federal money but eventually states must pick up part of the tab.
The remainder of the gap group – some 50,000 individuals – will have to purchase coverage through an online exchange now being established here called the Hawaii Health Connector.
Monetary penalties will be assessed anyone who fails to obtain coverage by January 2014. Those penalties are one per cent of income or $95 per individual/ $285 per family in 2014 (whichever is greater). They rise to two per cent of income or $695 per individual/$2,085 per family in 2016.
Ito said tax credits are now available to qualifying small businesses to offset the costs of their employees’ health insurance.
The Hawaii Health Connector website is in the early stages of construction but must be operational by the first of next year.
State Insurance Commissioner Gordon Ito likened it to an “Orbitz or Travelocity” site where customers can match their budgets and personal preferences to health insurance providers offering a variety of products and prices.
The providers must be pre-approved by the state and federal officials.
Giesting was vague when asked today what she expects health insurance prices to be like when the Connector opens for business.
“I have read estimates that initially there will be a small increase in the premium costs but I think that here in Hawaii because we have had prepaid (insurance) and so many people are already covered, I really think that that is not likely to be the scenario here,” she said.
Even if premium costs rise, Giesting asserted, provisions of the new federal law “for improving quality and reducing … costs over time I think are bound to have a good effect on the sustainability of health insurance premiums.”
Health care premiums have risen steeply in recent years but the rate of increase has actually declined significantly in the last two years, Ito said.
Rates for one unnamed insurer rose an average of 9.35 per cent per year from 2007 through 2010.
In 2011, the same carrier’s premiums rose 3.7 per cent and this year the increase dropped to 2.6 per cent, according to Ito.