A historic U.S. House of Representatives health care bill would have little direct effect on roughly two-thirds of Hawai'i's population though proponents say it may ultimately lead to a blunting of increases in costs.

A review of the bill passed by the U.S. House of Representatives on Nov. 7 shows the number of people with health insurance could rise by 48,380 people in Hawai'i, including opening up coverage for part-time workers and expanding access to Medicaid coverage.

"The House bill is a good thing," said Lawrence "Bill" Boyd, a labor economist with the University of Hawai'i-West O'ahu who's studied health care reform. "If that bill survived, I believe nationally it would increase coverage and lower costs."

The 1,990-page health care bill's passage has been deemed a landmark moment by Hawai'i's two members of the U.S. House of Representatives as Congress considers ways to increase health care coverage and lower costs.

Opponents have bemoaned the legislation, noting it carries a trillion-dollar bill and saying it will saddle employers with additional burdens while raising costs.

"Instead of making health insurance more accessible and affordable for small business, H.R. 3962 imposes more costs through its expensive employer mandates, punitive payroll taxes and a new government-run program," said Melissa Pavlicek, Hawai'i state director for the National Federation of Independent Business.

"All of which will only result in more money coming out of small-business owners' pockets."

The bill is only one half of a Congressional effort to come up with a health care bill for President Obama to sign. The Senate has yet to bring its own bill to the floor for debate and vote.

If the Senate passes a bill, there is no guarantee that all of the measures in the House legislation will survive in discussions on a final bill between the two houses.

Nonetheless, the House bill provides a glimpse of what health care reform could bring, at least if what proponents say comes true.

For many people in Hawai'i, the reform measures will be a non-event because of the so-called "Hirono Amendment" that U.S. Rep. Mazie Hirono inserted into the legislation to exempt Hawai'i's unique Prepaid Health Care Act of 1974.

That law mandates employer-sponsored health care insurance for Hawai'i workers who regularly toil 20 or more hours a week and is a reason why the state has the second-lowest uninsured total in the nation. In 2008, 7.8 percent of residents didn't have insurance here.

The broad coverage also is a reason why Hawai'i's health care costs haven't increased as rapidly on the Mainland. People without insurance tend not to take preventive visits to doctors, exacerbating problems, and make greater use of costly emergency room visits, Boyd said.

1.16 MILLION COVERED

UH economist Boyd's research shows that about 834,300 people have employer-sponsored insurance in the state, out of the total of 1.16 million who have coverage here.

The Hirono exemption allows provisions of the state's health care act to continue. Hirono, in remarks supporting the House bill, said the act doesn't mean that the state is exempted from H.R. 3962.

The state's Prepaid Health Care Act "does not apply to part-time employees, seniors on Medicare, those without health insurance, government employees or those covered by collective bargaining agreements," Hirono said.

"Therefore, H.R. 3962 would apply to them."

Boyd's figures show there are 423,700 Hawai'i residents who aren't covered by the Prepaid Health Care Act, and about 98,300 of those don't have insurance. He said almost half of those who don't have coverage can't get or afford the insurance, including about 45,000 people who are at or a little above the poverty line.

If legislators are successful in getting insurance coverage for 96 percent of people nationally, the number covered here would rise.

Currently about 92.2 percent, or 1,159,300 residents, have some form of health insurance here, whether provided by employers, through Medicare or the military, Boyd said.

Increasing insurance coverage to 96 percent here would mean another 48,380 people added to insurance rolls here.

The bill also includes changes such as requiring health insurers to accept people who have pre-existing health conditions and improving Medicare benefits.

All of this, Boyd said, should work to slow growth in health care costs and increases in health insurance premiums.

Rep. Neil Abercrombie, who voted for the bill, said it includes tax credits, which could help as many as 116,000 Hawai'i families pay for insurance.

There are myriad other changes in the bill, including the start of health insurance exchanges for people such as part-time workers who aren't enrolled in employer-sponsored insurance, Medicare or Medicaid. Small businesses with 25 or fewer workers in 2013 will be able to use the exchange. It is to feature insurance from a range of insurers and the proposed public option plan.

Boyd said 20,300 of the state's 119,000 part-time workers currently don't have insurance. If coverage is unaffordable for low-wage workers, they can get subsidized coverage, with the employer making a contribution to the exchange.

Abercrombie, speaking after the bill's passage, said the legislation wasn't perfect nor was it the final word on health care.

"But this is a momentous step," Abercrombie said, noting reform has been talked about since the 1950s but special interests have kept Washington from making any progress.

CRITICS SPEAK OUT

Not everyone is happy with the measure, or other reform measures being considered.

The National Federation of Independent Business is one of several business groups that have been critical of the bill, saying it fails to address unsustainable costs, includes new reporting provisions that will increase business costs, and features a poorly structured and too small tax credit.

Moreover, private insurers will not be able to compete fairly with the public option insurance called for in the bill. This threatens to undo the current marketplace, limiting choices and driving up costs.

"The misnamed Affordable Health Care for America Act doesn't do that," NFIB's Pavlicek said in a press statement. "All it does is increase costs, limit choices and kill competition."

The bill also requires everyone to have health insurance or else pay a fee equal to the lower of 2.5 percent of adjusted income (though some low-income people will be exempted) or the average premium on the insurance exchange.

Moreover, some of the funding for the reforms is coming from a 5.4 percent tax surcharge on individuals making an adjusted gross income of $500,000 or couples making $1 million annually. Boyd said this would apply to about 3,000 individuals and couples in Hawai'i.

Abercrombie spokesman Dave Helfert noted that people should look at the broad picture of more people getting health care. He said people who have ideas on what's the best way to go can communicate them to their elected officials.

Moreover, he noted much could change depending on what the Senate produces and then what is hammered out between House and Senate negotiators.

"It's a process and it's in process," Helfert said. "We really just took the first big step."