Anthony Wright is executive director of Health Access California, the statewide health care consumer advocacy coalition. He blogs daily at the Health Access Weblog and is a regular contributor to the Treatment.
While vacationing in Hawaii, conservative radio talk show host Rush Limbaugh had to visit a hospital for chest pains. At a press conference talking about his stay, he seemed to take a dig at efforts to reform the health care system, saying he was availed of "the best health care the world has to offer." Limbaugh continued,
Based on what happened here to me, I don’t think there’s one thing wrong with the American health care system. It is working just fine, just dandy.
But, as Ben Armbruster at ThinkProgress and Paul Abrams at the Huffington Post note, Hawaii's health care system is distinct from the rest of the country, in that they passed a version of health reform decades ago, in 1974. The Hawaii Pre-Paid Health Care Act includes a requirement for employers to provide health coverage to their workers. As you may know, a similar requirement on large employers is a key part of the reform now pending in Congress.
And the employer requirement seems, by and large, to have succeeded. It has increased coverage--just under 8 percent of the state's population is uninsured, second only to Massachusetts--and access to care. At the same time, Hawaii still has some of the lowest health care costs in the nation, despite its high cost of living and without an apparent decrease in quality--as Limbaugh himself discovered
But there are other lessons from Hawaii beyond Limbaugh's visit and unintended endorsement of reform.
* Hawaii's experience refutes, with real-world evidence, the opposition arguments that employer mandates are "job killers." Recent studies of the employer mandate in Hawaii--and in San Francisco, the other place in the United States with a strong employer requirement to contribute to health care--show that there was no measurable impact on jobs.
* Both Hawaii and San Francisco have higher requirements on what employers must provide than what is envisioned in either the federal health reform proposals. That suggests that, with final House-Senate negotiations about to start, policymakers have room to ask more of large employers--especially those that don't provide coverage to most of their employees right now. Most employers won't have to do more than they already do, but the higher standards would secure not only more on-the-job coverage, but also additional contributions from employers that don't provide coverage. That would provide money to increase the subsidies to low- and moderate-income families (likely the workers of those employers) to make premiums more affordable--another much needed improvement to the bills.
To put another way, as we debate the issue of an excise tax on high-cost health plans purchased by employers who provide supposedly "too much" coverage to their workers, we should make sure our health system get its fair share of contributions from those employers who provide too little coverage--or no coverage at all.
* Another lesson: Beyond the level of the assessment, the structure of the employer requirement is key, so there aren't broad loopholes that allow employers to avoid any contribution whatsoever. In this regard, the Senate's complicated "free rider" provision needs to be fixed. The House version has a simple test of whether an employer is providing adequate coverage, and the assessment for those that don't is a percentage of payroll, based on a sliding scale capped at 8 percent. The Senate version is more convoluted, and the most problematic part is that employers could avoid much of the penalty by shifting workers to part-time status.
As Elise Gould and Ken Jacobs writing for the Economic Policy Institute indicate, "Studies of Hawaii’s health insurance mandate have found that the state has a disproportionate number of employees working slightly under 20 hours a week, the number of hours at which that requirement becomes effective. The 30-hour cut-off in the Senate Finance bill is more likely to encourage reductions in work time, since it is easier to restructure work to fewer than 30 hours a week than to fewer than 20 hours a week." As the researchers note, work shifts in this range are common in the restaurant, retail, and nursing home industries--the very ones that are less likely to provide coverage and leave their workers uninsured. The experience from Hawaii is strong evidence that the final employer responsibility provisions. should be closer to the House than the Senate.
* A final lesson is about flexibility. No other state has been able to follow Hawaii's success with a straight-up employer mandate because of a federal law called ERISA, which regulates worker benefits and limits state authority. (An appeals court found Healthy San Francisco's different "pay-or-play" requirement was permitted under ERISA, but that is being appealed to the Supreme Court.) Hawaii got a exemption written in 1974 that makes it unique, but that also prevents the state from making major changes. So while the law has largely worked well in the Aloha State, they have not been able to fix the part-time worker problem mentioned above or make other adjustments.
The lesson is that the federal government should allow for adjustments in the future. And states should have some ability to innovate, as long as they meet federal standards and goals. This should be preserved and strengthened in the final reform bill.