Adverse ruling wouldn’t stop Hawaii gains in health care

The chances that the U.S. Supreme Court will uphold the constitutionality of the federal health care act are considered slim, judging from the justices’ remarks in last week’s three-day session. If most analysts are right about what the high court will rule this summer, Hawaii is better situated than most other states to withstand the unfortunate national backtrack. Further, improvements in state health care would continue to be possible.

The four conservative justices in the court are almost guaranteed to side with the 26 states that challenged the law, while its supporters have hopes that Justice Anthony M. Kennedy, the court’s swing vote, will side with the Obama administration and uphold the law. But don’t count your justices before they hatch their decision, expected in June.

The worst ruling for Hawaii would be one that not only overturns the individual mandate, requiring every citizen to maintain insurance or be fined, but would cause all other elements of the law to crumble alongside. That is the domino result expected by many.

Among the provisions that are now in effect and would disappear under that scenario is a federal tax credit for small businesses that covers employees with health care. Other such active provisions include coverage of young adults up to age 26 in their parents’ health plans, required acceptance of insurance plans covering people with pre-existing conditions and elimination of lifetime limits on health coverage. If those elements are allowed to survive in the federal bill, they would continue to be an improvement of Hawaii’s state law.

Here it gets complicated. Hawaii’s health law was enacted in 1974, the same year that Congress enacted the Employee Retirement Income and Security Act, which regulates all pension and benefit plans. In a 1980 lawsuit settlement, the Hawaii law was ruled to have been superseded by the federal law. As part of the settlement, Hawaii’s congressional delegation in 1982 won legislation that, among other things, contained a caveat that the state health law would vanish upon any substantive changes.

Following congressional passage of the Obama health care law in 2010, Gov. Neil Abercrombie last year signed into law a provision that would protect Hawaii’s present health care law by removing the clause in the state health care law that would cause it to be shot down "upon the effective date of federal legislation" under the Obama act.

The Obama law also includes a provision authored by U.S. Sens. Daniel Akaka and Daniel Inouye that protects the Hawaii law from ERISA regulation, but that also could die with the entire federal law.

Under that worst scenario of the Obama law, health care entities in Hawaii still should be able to make progress outside provisions of the 1974 law, including health insurance exchanges for purchase by individuals and for small businesses, proposed by the Hawaii Health Connector.

Survival of a skeleton federal law may allow changes within the elements of Hawaii’s health care law, but that could be a matter of legal debate.

It’s widely recognized by all stakeholders — including government, medical insurers and medical providers — that dramatic changes must occur to rein in costs while ensuring quality patient care; in Hawaii, work on reforms is already under way.

If upheld by the Supreme Court in its entirety, the federal law would allow significant improvement of America’s health marketplace, including the penalty of a "shared responsibility payment" for citizens who refuse to voluntarily share in the cost.

Even if the federal bill is entirely overturned, Hawaii should be able at least to make improvements to health care.