Former U.S. Rep. Neil Abercrombie and Lt. Gov. James "Duke" Aiona said yesterday that they would preserve the state’s Prepaid Health Care Act, which requires businesses to provide health insurance for employees, but indicated that the state law might have to be changed to remain financially sound.
The two candidates for governor said they want the state law preserved as the nation makes the transition to the federal health care reform law. The state law has helped put Hawaii among the top states in health insurance coverage for residents.
But Abercrombie and Aiona, in remarks to Kaiser Permanente employees at the Sheraton Waikiki and to reporters afterward, said the state may have to review whether the Prepaid Health Care Act can be sustained.
Passed in 1974, the law requires companies to provide health insurance to employees who work at least 20 hours a week. Workers’ share of premium costs is either 50 percent or 1.5 percent of their monthly gross earnings, whichever is lower, which some businesses have cited as a financial strain.
"It 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.
Aiona, the Republican candidate, said he believes most businesses support the Prepaid Health Care Act, although some would likely want workers to pick up a larger share of premiums.
Aiona said the state law is in "limbo" because of a provision that ends the law in the event national health care reform is passed. Health care analysts differ on the implications for the state law, however, and believe that the sunset provision — if it applies at all — would not take hold until 2014, when most people are required to have health insurance under the federal law.
Aiona said he would work with the state’s congressional delegation on any changes necessary to preserve the exemption for Hawaii.
"I want to make sure that at the very least we don’t lose any of those benefits for our people," he said.
Abercrombie countered that the state law is not in limbo, and said Aiona was "reaching."
Aiona also said the future of the federal health care reform law is uncertain because the November elections could change the political composition of Congress, and the 2012 elections could change the presidency. National Republicans have said they want to repeal the federal health care reform law.
Aiona said he has not determined whether, as governor, he would join other states that have challenged the federal law as an unconstitutional violation of the commerce clause because it requires almost everyone to purchase health insurance or face penalties. He also said that he would be fine with adopting the federal law over the state law if it provides more health coverage at a lower cost.
Abercrombie agreed that a GOP takeover of Congress would have an impact.
"We have to come to grips with the costs of health care," he said. "And the Democratic position is we’re all in this together. And the Republican position of the lieutenant governor is, ‘You’re on your own.’ And that’s going to be a decisive factor in this election."
Abercrombie and Aiona differ on how to handle the rising cost of Medicaid and on medical malpractice insurance reform.
Aiona said the state will likely have to reduce benefits for some Medicaid recipients, since eligibility is expanding under the health care reform law, and reimbursement payments will likely not keep pace with costs. Abercrombie said the state should make better use of federal Medicaid dollars and reorder state spending priorities.
Aiona wants a $250,000 cap on noneconomic damages in malpractice lawsuits, which he believes will lead insurers to lower malpractice insurance premiums on doctors.
Abercrombie opposes such a cap and accuses insurers of "gouging" doctors with high premiums.