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Lawmakers move bill to protect Hawaii’s health insurance system

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Hawaii lawmakers are trying to protect the state’s unique health insurance system from federal interference because they say the islands’ law provides better coverage than the 1-year-old national health care overhaul.

A measure advancing through the state Legislature aims to safeguard Hawaii’s health system, which requires businesses to provide insurance to full-time employees, from potential legal challenges.

The bill would eliminate a section of the state law calling for it to be repealed when federal legislation provides for mandatory prepaid health care.

Unlike states opposing the federal requirement that individuals buy health insurance by 2014, Hawaii’s overwhelming Democratic political leadership supports the national health law, which President Barack Obama signed one year ago this week.

But they want to be able to use the federal measure to complement state health rules, not replace them.

“We need to be insulated from any decision that the federal law trumps Hawaii state law if ours is better,” said Sen. Josh Green, a Big Island emergency room doctor and chairman of the Senate Health Committee. “We want to take the best parts of the federal law … but I want to make sure we keep the best parts of Hawaii’s law, which provides almost universal coverage.”

Hawaii has one of the lowest rates of uninsured residents, at 7 percent compared to 15 percent nationwide, according to Kaiser Family Foundation figures based on 2009 Census data. Massachusetts had the lowest percentage of uninsured, at 4 percent.

Hawaii’s Prepaid Health Care Act requires businesses to provide health insurance and limits employees’ share of health costs to 1.5 percent of monthly gross earnings.

Green (D, Milolii-Waimea) said the federal health law should force state insurance companies to accept clients who have pre-existing conditions without infringing on the Hawaii’s existing system.

Republican representatives opposed the measure and introduced a failed amendment that would have instead studied the effects of federal health law on Hawaii.

“Why are we in this chamber wanting to implement parts of Obamacare when this own bill is saying that our Hawaii Prepaid Health Care Act is superior?” asked Rep. Kymberly Pine (R, Ewa Beach-Iroquois Point), during debate of the bill on the House floor this month.

The national health law already includes an exemption for Hawaii that says it shouldn’t be construed to modify or limit the state’s law.

But court challenges to either the federal or state laws could endanger Hawaii’s system, Green said.

In its first year, the federal health law ensured that 69,000 children in Hawaii would be protected if they had pre-existing conditions, and 22,000 Medicare recipients who fell into the coverage gap called the “doughnut hole” received $250 rebates, said Herb Schultz, regional director for the U.S. Department of Health and Human Services.

“The Affordable Care Act is bringing real benefits for people in Hawaii and across the country,” he said. “We’re ensuring that some of the worst abuses of the insurance industry are a thing of the past.”

Hawaii’s legislation cleared the state House and two Senate committees this month. It’s now pending before its final Senate committee.

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