Target Areas for Expanding Coverage: Uncovered

An estimated 50 percent of Hawaii’s uninsured, or more than 58,400 people, are on the job, according to the University of Hawaii Social Science Research Institute, which performed an extensive analysis of the 1996 to 2002 Current Population Survey conducted by the U.S. Census Bureau. Based on a 7-year average of the survey, the university derived these numbers. Uninsured sole proprietors and the self-employed represent about 11,800 workers.

Hard at Work but “Gambling” on HealthPart-Time Workers. Reasons for part-time employment vary. Some people may prefer part-time employment, such as parents with young children, college students, and retirees who are too young to collect retirement benefits or qualify for Medicare. Others are unable to obtain full-time work, and rely on a series of part-time jobs that total or exceed 40 hours per week.

Sole Proprietors. Sole proprietors are not required to carry health coverage or workers compensation. Also, they do not qualify for group health insurance rates. Many who want coverage feel that purchasing insurance is unaffordable.

Some Classes of Government Employees. Government employees and workers covered by collective bargaining are exempt from coverage under the Prepaid Health Care Act. Government workers classified as “emergency” or “temporary” hires are not covered by collective bargaining—nor by the Prepaid Health Care Act.

Cost of Group Coverage: Businesses Carry the Burden
The cost of health insurance has escalated rapidly in recent years. According to the 2002 report “Health Care Costs: Trends and Relationships to Insurance Premiums,” issued by the University of California Academic Senate, “…insurers are now passing on to their policyholders cost increases that they might have absorbed in past years—and are adding to them in the process of improving their bottom lines.”

Because of Prepaid Health Care Act provisions, Hawaii employers pay the highest percentage of health insurance premium costs in the U.S. According to the Medical Expenditure Panel Survey – a national survey of health care use – the average Hawaii health care insurance premium in 2000 was $184 per month, of which the average employee contribution was $16 (8.6 percent). Nationally, the average total premium was $221 per month, with employees paying an average of $37 (about 17 percent).

Some businesses have sought to avoid paying for employee benefits, including health insurance, by increasing the size of their part-time workforce (employing more workers at less than 20 hours per week) and contracting more services to self-employed individuals.

Cost of Coverage: Individuals Carrying the Burden
The actual costs for privately obtained individual health insurance vary and are difficult to come by, except anecdotally, because insurance rate information is confidential.

Health Insurance Is a Luxury Many Individuals Can’t Afford
A Hawaii mother with one child pays $325 per month for an individual HMO plan. (With one more child, her monthly premium would be nearly $500.) If she earns the average monthly wage in Hawaii — $1,702 ($2,432 per month before taxes) — her insurance costs would represent nearly 20 percent of her net monthly income. The copayments she makes for services are more than double those required of people covered by group plans, and she does not have drug, dental or vision coverage.An unmarried Hawaii man who is a sole proprietor with no pre-existing conditions pays $130 per month for his insurance plan, which also requires higher copayments and does not offer drug, dental or vision coverage. At 7.6 percent of the average monthly income — $1,702 ($2,432 per month before taxes) — the premium might be considered affordable, but not when the costs of his co-payments, drug, dental and vision expenses are added in.

The Hawai‘i Uninsured Project has assembled a committee of community leaders to develop affordable options that best serve the uninsured and employers. Solutions may include creating an affordable and easily accessible health insurance product.