[Congressional Record Volume 140, Number 77 (Friday, June 17, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 17, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                       HAWAII PREPAID HEALTH PLAN

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
February 11, 1994, and June 10, 1994, the gentlewoman from Hawaii [Mrs. 
Mink] is recognized for 60 minutes as the designee of the majority 
leader.
  Mrs. MINK of Hawaii. Madam Speaker, I wanted to have this opportunity 
during special orders to discuss the Hawaii prepaid health plan. It is 
so often made reference to in various debates and forums that I wanted 
to take this time to clarify some of the points that have been recently 
discussed.
  If we will recall back to September 1993, we will remind ourselves 
that in the inauguration of President Clinton's national health care 
reform there was considerable mention and identification with what the 
Hawaii prepaid plan was, and how it operated, and its most important 
ingredient was the employer mandate concept.
  The State of Hawaii has been unique in that. We have had a health 
care reform program for the last 20 years. It took effect in June 1974, 
and it has been in effect since then.
  People who are not aware of the controversy and the debate that 
occurred at that time of its enactment would probably think Hawaii 
being unique and different that the whole idea of a health plan simply 
breezed through the legislature without any controversy. That is not 
true. An examination of the news reports and the controversies during 
that time indicate that there was fierce debate, fierce objection on 
the part of the small business community and others rejecting the idea 
of mandates almost as heavily as we are being lobbied today in the 
Congress against the mandate concept.
  Nevertheless, the legislature did not budget, and in 1974 Hawaii was 
the first in the country to enact a comprehensive, universal type 
health plan. And we have developed it to such an extent that we are 
extremely proud of its implementation.
  There are differences between the Hawaii plan and the one that the 
President has unveiled and is now under debate. While it is an employer 
mandate plan, it was a mandate of the employers to cover only the 
worker, only the employee, not the dependents. It excluded those 
workers who worked less than 19 hours per week. So in a sense one could 
argue that it is not universal. It was not universal at its onset. But 
in the years intervening over the 20-year period it has become 
customary for the businesses not only to cover their employees, but 
also to offer coverage to their families.
  As a recent GAO report indicated, and our colleagues have all seen 
this report I am sure, a thorough audit and analysis of the Hawaii 
health plan, the GAO says that notwithstanding the fact that the 
employer mandate only required coverage of the employee, not 
withstanding that, somewhere between 93 percent and 96 percent of the 
population of Hawaii is now covered under an insured plan of some 
variety. The State of Hawaii itself in doing its own audit has released 
a report which shows that it is not between 93 percent and 96 percent 
coverage, but it is more in tune with 98 percent coverage.
  Whatever the percentage of coverage, it is the best in the country. 
It is the most comprehensive. We have reached the goal of universality 
to the highest degree of any other State in the Union. And this has 
been accomplished by an employer mandate concept.

                              {time}  1450

  I believe that the President's recommendation for employer mandate 
has been borne out by the experience of my State. The very small 
businesses who objected so strenuously against an employer mandate only 
to cover the employees moved very quickly to offer coverage to the 
dependents.
  One of the other major differences of our State plan is that the 
percentage of contribution by the employer was limited at 50 percent. 
It was a 50-50 arrangement. Over the years, we have found, and the 
Hawaii chapter of the National Federation of Independent Businesses 
verifies the fact, that most of the businesses paid 100 percent of the 
employee's premium even though they are not required to. They fought 
the mandate. They find now it is more convenient to just simply pay the 
whole premium not only for the employee but also for the employee's 
family.
  And this is how we have achieved nearly 96-98 percent coverage of our 
population in the State of Hawaii, and why we are so pleased with what 
we have been able to accomplish.
  Now, one would say Hawaii is a very high-cost area. Our land prices 
soar out of any chart that you can imagine; food is expensive; housing, 
whether it is rented or ownership, is very expensive. Our taxes in 
general are very expensive.
  And yet the GAO in its audit report found that we have one of the 
lowest in the country of health care costs of the insurance premium, of 
the utilization of any type of cost-shifting mechanism that we have 
heard so much about.
  The utilization of our emergency rooms is low. The utilization of our 
hospitals is low. The secret to all of this, which is a principal 
cardinal point of the President's whole thesis, that if you can achieve 
universal coverage and if your health plan is based upon benefits being 
extended for preventive care, then in the long term, and Hawaii has 
enjoyed that long term of 20 years' experience, you will see that the 
premiums that need to be charged in order to cover the cost of the plan 
are lowered considerably. The excessive costs in the emergency room are 
spared, and the utilization of hospital beds even has been reduced 
extensively.
  So we are very proud of the 20 years of accomplishment of our health 
care plan, and we are pleased to know that its success was used as a 
cornerstone in drafting the President's program.

  Let me give you some of the other interesting statistics. Hawaii has 
the lowest infant mortality in the Nation, grouped together with some 
of the New England States. It has the lowest rate of premature 
mortality for heart disease, one-third lower than the national average. 
In cancer, one-fourth lower than the national average. In lung disease, 
half the national average, and a whole plethora of statistics that are 
similar to that list.
  This has been compiled by the State of Hawaii in looking at our 
overall health system. The 20 years of experience has taught us many 
things, and we wish that we were able to convince the Congress and all 
of the committees on the things that it ought to be doing which we have 
done already in the State of Hawaii. But that is not possible. We are 
only beginning to create a system here for all of the people of the 
United States, and in doing so, the people of Hawaii feel very strongly 
that having had 20 years of experience in operating and implementing a 
system, that it would be grossly unfair to say to the people of Hawaii, 
``Dismantle your system, retrogress, even if your system is superior, 
has greater benefits, greater safeguards to your population, fall back, 
go back to the lower, less beneficial provisions of the national 
legislation,'' and we think that is grossly unfair.
  So the other day in committee, I offered an amendment. I serve on the 
House Committee on Education and Labor that has been dealing with the 
President's bill over the last 2 months. We hope by next week to have 
finished our bill and to be able to report it to the House itself. We 
will certainly be the first committee to have accomplished that.
  And so in the process of concluding deliberations on this 
legislation, I offered an amendment which the committee accepted which 
would, in effect, allow the State of Hawaii to decide by submitting an 
application to the national board not to be part of the system.
  To be absolutely sure that we are not trying to get out of a national 
law, because we do not want to fall within its requirements, we have 
provided in the waiver provision that the employer mandate provision 
must be at least as good as the national bill, that the comprehensive 
benefit package must be at least as good as the national legislation, 
that the guarantees of universal coverage shall be at least as good, 
and certainly not less than, the national average, that we will impose 
a quality control mechanism to make sure that the quality of health 
care that we are providing in the State is at least as good as is being 
required under the national law, and that the data system which is 
being required to be kept under this bill will be put in place in my 
State, and that we will have also imposed cost-containment measures. We 
want to be sure that, in offering the State an opportunity to opt out 
of this national program, that we are not saying we are going to have 
anything less than what is in the national law.
  The reason, the only reason, that the State is being offered this 
unique opportunity to opt out, to seek a waiver, is because we are far 
ahead of anything that the bill could have provided, because we have 
had 20 years of experience. It simply is not fair to the State of 
Hawaii, which has had 20 years of experience in implementing this 
program, to be forced to retrogress, to give less benefits, to give 
less assurances and safeguards to its population, because national law 
has now come and preempted.
  It has been the tradition of the Congress in all of the areas where 
we have imposed standards in environment and clean water and so forth 
to say to the States, ``If you have better laws, if you have better 
requirements, if you have better ways of assuring that the objectives 
of the legislation can be carried out or have been carried out, then 
the laws that have been enacted on a local level take precedence, and 
you are not superseded by Federal legislation,'' and this is all that I 
was attempting to indicate by offering my amendment.
  Hawaii has had 20 years of experience. It has implemented universal 
coverage in a very unique way, and it has achieved about 95-98 percent 
coverage of its population in the course of time, and it would be a 
shame, merely because the national system which is seeking to 
accomplish those very goals, sets off on a different mechanism or a 
different plan, to force the State of Hawaii to have to dismantle, 
retrogressing back and start all over.
  It is true that many States are beginning to discuss, beginning to 
develop their new systems. But the important point to recognize is that 
they have not yet implemented a statewide program as we have done in 
the State of Hawaii, and, therefore, they are simply in the process of 
development, and since they are in the process of development, they 
could very easily accommodate their own plans and proposals to make 
sure that they fall within the guidelines of the national program.
  The most important thing, if we did not have this waiver, is the 
protection that we now have in the State law, and I have talked to the 
leadership, I have talked to people in Ways and Means and my committee; 
no one buys into this concept, and what it is is that in our law we 
state absolutely categorically that no worker can be required to pay 
more than 1.5 percent of their paycheck toward the premiums of the 
health care plan to which they subscribe.
  This means that if a worker earns under minimum wage, about $10,000 a 
year, all they have to contribute toward their health care premium is 
$150. That is far less than the 20 percent that the legislation that we 
are considering would require them to pay.

                              {time}  1500

  They may not be in the poverty categories, and there are some poverty 
criteria which would enable them to have a subsidy, but we want to be 
sure that those kinds of protections that we now have as a result of 20 
years of experience and the need to protect low-income workers in our 
State are not jeopardized because in the national legislation we have 
to deal with broader generalities.
  Also, in the retired community, in the public sector retirees, they 
are protected by the Government paying 100 percent of their premium. 
Under the current legislation they would be required to pay 20 percent 
and the Federal Government or the State government would be required to 
pay the 80 percent.
  It would be a tremendous burden on the retirees who at the time of 
retirement thought that that was a contract they were making which 
would carry them through all their years of retirement. But it could be 
superseded by this national law if we did not have the opportunity to 
offer the State to seek an exemption.
  The amendment that I offered does not create an exemption, it merely 
offer the State an opportunity to do so. There are many reasons why a 
State may not exercise that option. One would be that if they did 
exercise that option, they would not be able to enjoy the Federal 
subsidies that the bill that we are now considering, at least in the 
Committee on Education and Labor, would offer to certain categories of 
small businesses.
  So we would have to factor that in, to decide, ``Do we really want to 
be out of this system when there is this opportunity for Federal 
subsidies coming in?''
  So, to my friends on the other side of the aisle I say there will 
probably be a tremendous debate on whether we should stay in or out. 
One of the considerations would be the loss of the subsidy. So, for my 
friends on the other side of the aisle who might say they should opt 
out because it would cost less because the Federal Government would not 
have to participate in the subsidy programs which we have provided in 
our legislation, but I believe the idea of recognizing the State of 
Hawaii for its 20 years of experience and implementation of their 
health plan is a genuinely sincere effort on the part of my committee 
at least to recognize that we have gone far in this program and that we 
ought not to be prejudiced or forced to dismantle it in any way merely 
because we are so far ahead of our time.
  Madam Speaker, I am happy at this time to yield to my colleague, the 
gentleman from Hawaii [Mr. Abercrombie].
  Mr. ABERCROMBIE. I thank the gentlewoman for yielding and for taking 
this special order. I think what I would like to do, almost, is to 
engage in a bit of a colloquy on this because, as the gentlewoman 
indicated, we have more than 20 years of experience in this.
  I think it is very important that we do not find ourselves with the 
Record being printed about the remarks that the gentlewoman made or the 
remarks that she referred to about Hawaii receiving, in effect, special 
treatment by way of this opt-out amendment, that we refute, this; that 
only the contrary, what the amendment the gentlewoman offered in 
committee seeks to do is to indicate that we do not want special 
treatment for Hawaii. Rather, we do not want to be discriminated 
against for what we have accomplished.
  It is quite the opposite.
  Now, if some Members of the body are willing to provide for their 
constituents less than what we already have in Hawaii, I suppose they 
could have that prerogative. If they want to stand up and offer an 
amendment in the gentlewoman's committee or in the Committee on Ways, 
and Means or anywhere else which says, ``My constituents will have less 
than everyone else is already having provided for them in law,'' I 
presume they could be our guests to do that. Presumably, they could go 
back to their constituents and say, ``Well, we don't intend for you to 
have the same benefits that Hawaii has provided for more than 20 
years.'' That would be their prerogative, would it not?
  Mrs. MINK of Hawaii. Well, the launching pad, I think that is what my 
amendment has offered opponents of the President's plan, my amendment 
has offered them a launching pad in which to offer these amendments, 
which was done the other day by Mr. Hoekstra of Michigan, to say that, 
``Well, there ought to be a referendum, then, in each State as to 
whether they want to belong or be part of this whole idea.'' What is 
wrong with such a suggestion is that we are now debating a national 
health plan; we are attempting to see national standards, national 
norms, national formats for participation, national guarantees of 
consumer rights and so forth. It is to be a national plan where there 
are certain standards and requirements that each State must come up to 
within a 2- or 3-year period.
  What we are saying with our amendment is not to relieve us of these 
standards and requirements but, on the other hand, to say that Hawaii 
has achieved all of these or will achieve all of these by new 
enactment; because if they do so, there are other ramifications that 
the congressional law cannot possibly adopt because it is so 
progressive and so far advanced that surely the Congress does not 
intend for Hawaii to dismantle it.
  That is really where we stand today, and I thank the gentleman for 
his question.
  Mr. ABERCROMBIE. If I may go just a bit further, in order to 
explicate what it is that is being offered in the gentlewoman's 
amendment, all of it is conditional, that is to say Hawaii is not 
coming forward and simply stating or asserting that it has some 
superior version. On the contrary, the gentlewoman's amendment makes 
very, very clear that unless the most stringent adherence of the 
concepts is made manifest in the national law are adhered to, unless 
every element of the national law which is in fact progressive, which 
is leading to better health care for all Americans, unless every single 
point is matched or better than matched in the Hawaii law, Hawaii would 
not be eligible for such an exemption.
  Mrs. MINK of Hawaii. That is exactly right.
  Mr. ABERCROMBIE. In fact, does not the gentlewoman's amendment also 
indicate and state explicitly that the most stringent elements of 
examination as to whether it is being met will be put into place?
  Mrs. MINK of Hawaii. Exactly. And we will have a constant review 
every 5 years in order to meet these requirements. It will not be a 
simple adjunct effort on the part of Hawaii to qualify.
  As I said during my remarks, our current law only covers the 
employees. The State legislature will have to go into session and amend 
the law and cover all the dependents of the worker. They must do that. 
Why I believe it is such a simple thing for the State to do it and that 
they will do it is that even without the mandate our companies have 
already covered the families and their dependents.
  The second thing they are going to have to change is the 50-50. We 
now say to the employers, ``You pay 50 percent of the premium, and the 
employees pay 50 percent.'' In truth, as I said in my earlier remarks, 
the employers are paying about 100 percent of the premiums. That is not 
going to be a big barrier, but they will have to go to the legislature 
and fix that because all of the bills we are talking about are about 80 
percent by the employer and 20 percent by the employee. Failure of 
Congress, however, to create a protective floor for the low-wage worker 
is what is causing me to feel the pain about this less progressive 
provision, because in Hawaii, as I said, a low-wage worker does not 
have to contribute more than 1.5 percent of their payroll. We do not 
have that safety in this legislation.
  So our workers who are low-wage workers are going to have to pay much 
more of the premiums than they currently do. And that is unfair because 
our system has worked. We have implemented it, and I do not see any 
reason why we should be forced to cause greater pain on our workers 
than is already the case through a voluntary system that the employers 
have adopted.
  Mr. ABERCROMBIE. So the facts are this: More than 20 years ago all of 
the same arguments were being made, virtually word for word, all of the 
same kinds of fears and anxieties were being conjured up in order to 
prevent us from passing the initial legislation, and the initial 
legislation, therefore, passed in high hopes that those objections 
would be met and the experience of 20 years as opposed to the rhetoric 
of the last 20 weeks or so in Congress has been--not only were those 
fears unwarranted, not only were those anxieties of no substance, but 
the fact is that even though there was a requirement 20 years ago of 
only 50-50 participation, through collective bargaining, management has 
come to realize that 100 percent coverage is in fact a net advantage 
and that the only ones who are benefiting from the old system, probably 
more accurately I should say nonsystem, were those insurance companies 
who were seeking to make a maximum profit out of other people's pain 
and suffering and grief, who took all the middle-level expenditures out 
for themselves in terms of profitability so that there was no real 
choice and there was no real service to the consumer and the patient 
and the victims and there was no real choice with respect to the 
physicians, nor were the hospitals in any position to exercise more 
efficient management.

                              {time}  1510

  It was strictly those insurance companies that were in effect cherry 
picking the population for their own profitability that got, quote, 
hurt, unquote. That is to say, when the forces of competition came into 
play, under our law it turned out that the overwhelming majority of 
those people under the employer mandate were being offered 100 percent 
full family compensation with respect to their health insurance so that 
those then who are complaining today, who are saying that this will 
never work; the experience of Hawaii shows that those fears are 
completely unwarranted, that they are, in fact, trying to stop national 
health care because they know it works, and we have proved that it 
works.
  Mrs. MINK of Hawaii. In Hawaii, Madam Speaker, I would say that most 
of the small businesses, small employers, are really not that aware or 
cognizant of the requirements of our Hawaii law. What they understand, 
and as a part of practice and custom over 20 years, is that coverage of 
health care is part of the normal course of business. Until this 
debate, Madam Speaker, one would never have heard anyone saying, ``Oh, 
that's an employer mandate.'' It is a new word that has now come into 
the vocabulary, and I am somewhat startled because I get letters from 
small businesses, restaurants, who tell me:

  ``I don't want to change the system. I just want to be left alone. I 
now cover my employees and their families----''
  Mr. ABERCROMBIE. Right, exactly.
  Mrs. MINK of Hawaii. ``And we are happy, and I pay all their 
premiums, so don't give me this huge bureaucracy that's going to 
complicate matters and make it more difficult for us to stay in 
business.''
  So I respond to them and say, ``In Hawaii,'' and maybe I should not 
have told them that, but, ``under Hawaii all you need to do was cover 
your own worker, and all you had to do was pay 50 percent of the costs, 
except this 1.5 percent.''
  And he said, ``You know, the national Government is not going to come 
in and do any more to you than what you are currently doing just as a 
matter of what is right.''
  Mr. ABERCROMBIE. And what is good business.
  Mrs. MINK of Hawaii. And what is good business.
  Mr. ABERCROMBIE. And the reason for this, of course, is they help us 
stabilize the work force.
  Mrs. MINK of Hawaii. Exactly.
  Mr. ABERCROMBIE. Because when people have a steady job where they 
know their health care needs are going to be met, there is a great 
likelihood of job satisfaction, and the ability of working with 
management is increased rather than decreased.
  When we talk about welfare reform, Madam Speaker, I think my 
colleague would agree with my contention that the greatest single thing 
that we can do to extend reform to the welfare system is to have 
national health care coverage. This is what enables people, along with 
child care and educational opportunities, to go into a job and not have 
to worry about losing those medical benefits they would otherwise have 
under the welfare system.
  I ask:

       Isn't this interesting? When we are keeping people from 
     working, we know that we have to provide them with medical 
     care. But when we remonstrate with them and say to them, 
     ``You have to go to work, you have to hold down a job,'' we 
     take the medical care away, thus disenfranchising them from 
     that very central element which enables them to have security 
     for their family.

  Mrs. MINK of Hawaii. Let me add another startling fact to the 
marvelous achievement of my State.
  Very early on, when we began the debate on national health reform, 
the opponents argued about this huge bureaucracy which would be needed 
to run the system. They were, of course, not aware that under Medicare, 
which is really part of our dialogue and our existence today, the 
overhead costs for Medicare is less than 2 percent.
  So, even with the system we now have in Medicare, Madam Speaker, it 
has not been borne out that there is this huge bureaucracy, but in 
Hawaii, under the plan that they created, and I took a committee, 
several committees, out to Hawaii, because I knew they would not 
believe what I had to say on the floor of the House without examining 
this fact themselves, and each one of these individuals had the 
opportunity to investigate what I am about to say, and that is:

       The enforcement mechanism, which was required to be put in 
     place over these 20 years of operation of our health plan, is 
     exactly two new employees, and I repeat that again. Two new 
     employees were required to be hired in the health department 
     in order to administer this program.

  So, all the bugaboos and all the opposition arguments that have been 
made simply have not borne out in reality in my State. Businesses 
prospered by every criteria of examination, and this was done by the 
GAO to see what happened in that period of implementation. Did the 
business go bankrupt? How many shut? How many grew? And in truth of 
fact, Madam Speaker, my State has grown enormously with this protection 
for workers as a guaranteed benefit.
  So, I urge my colleagues to follow the example of my State and, in 
doing so, lend support to the Clinton health plan because it is a 
necessary step in the furtherance of the quality of life of millions of 
Americans. Without it they are in jeopardy. Without it the success and 
prosperity of our Nation is in jeopardy. And so I hope that, without 
picking on my State for what it has accomplished and ridiculing our 
effort to stand up and say it as it is, and that is that we are so far 
ahead, while we support the Clinton efforts, we think that they are 
absolutely essential for the Nation to succeed and prosper, but, for 
heaven's sake, do not throw us backward in the process because we have 
achieved so much, and it would simply be unfair to ask us to dismantle 
our system while others are beginning theirs.
  Mr. ABERCROMBIE. I would like to say in my concluding observations 
that we would be more than happy to have the necessity for offering 
such an amendment be obviated by having a national health care plan 
pass which at a minimum offers at least as much as we have already 
achieved in Hawaii. There would be no necessity for us to anticipate 
the possibility, not the desirability, but the possibility, of having 
to take up such an op-out amendment if we pass national health care for 
the country at least as good as that which we have in Hawaii, and I 
think the bottom line observation then, I think, needs to be, and I 
think people need to ask this question of those who are opposing health 
care, throwing up obstacles to health care and the President's 
principals all across the country:
  ``Why are you trying to prevent? Why are you trying to prevent, why 
are you opposing, a national health care plan which does nothing more 
than present at least that which Hawaii has already achieved and has 
been operating with success for more than 20 years?''
  That is the question that every American has to ask himself or 
herself, why is it that the gentlewoman from Hawaii [Mrs. Mink] and I 
have to come to the floor, have to do 1-minutes, have to meet with 
Members, have to go to committees and over, and over, and over again 
say, ``Look, it's very, very simple. We have been doing it for 20 
years. Can't we at least provide for the people of the United States, 
as a whole, that which the citizens of the State of Hawaii have already 
been enjoying for 20 years?''
  Unless and until the insurance lobbyists, and, as the Washington Post 
says today, health lobbyists, they certainly are not health lobbyists 
because they do not wish good health to the people of this country, but 
at least until all those who are in opposition to national health care 
are able to answer that simple question: ``Why can't we have a national 
health care plan that emulates at least what Hawaii has been providing 
for more than 20 years''; until they are able to answer that, what they 
really mean is that they are in the grip of private interests whose 
profitability and whose interests are not those of the American people, 
nor their health.
  Mrs. MINK of Hawaii. The opportunity to allow the State of Hawaii at 
least to maintain the program benefits that they now have that are 
better than anything the Congress is going to enact is simply a 
recognition of the justice that is required by such action.

                              {time}  1520

  I hope that this House will take it under those auspices and give us 
the necessary recognition for being so far ahead in achieving what is 
simply fundamentally correct for all of the people of the United 
States.
  I think my colleague for joining me this afternoon.

                          ____________________