WAIKAPU - Hawaii's insurance commissioner says small businesses and individuals have the "best of both worlds" this year when it comes to health insurance.
Even as residents try to understand the Affordable Care Act, otherwise known as "Obamacare," Commissioner Gordon Ito said that, at least for this year, families and businesses can choose between an older 2013 health plan and the new 2014 health plan that complies with the new federal law.
This option became available in November when President Barack Obama gave states the power to allow small group and individual health insurance policies to be renewed for one year - even if they did not comply with terms in the health care act. Some Americans were upset that their old plans, which cost less but did not include services required by the new health care law, were being discontinued and that their new insurance options were more expensive.
Hawaii is giving its residents the opportunity to choose.
Depending on the individual or the small business, there could be monetary savings with either of the choices, Ito told the audience at the Maui Native Hawaiian Chamber of Commerce general meeting Tuesday night at the Maui Tropical Plantation in Waikapu.
For businesses, some could see health care costs significant decreases by going with a particular plan, Ito said. Large businesses with more than 50 employees will not affected, he added.
"Most . . . are sticking to 2013 plans," Ito said "(But) around half of individuals and businesses would be better off buying a 2014 plan."
Differences between the 2013 and 2014 plans include having prescription drugs bundled into plans for 2014 versus having prescription drugs be a "rider," or add-on cost in 2013 plans, Ito said. Other differences include how costs are assessed, such as by the number of sick employees or by age.
The insurance commissioner stressed to the audience that if they are a small-business owner or individual that they should do comparisons to see which option would be most beneficial.
He added that those on Medicare and Medicaid will not be affected.
One of those attending was small-business owner Johanna Amorin, who after the meeting said that she would be checking the state Department of Commerce and Consumer Affairs Insurance website at cca.hawaii.gov/ins to see how plan prices vary.
Still, Amorin said that she was "more confused" about the health care act after Tuesday's presentation and that she would take up Ito's offer to call him with questions.
During the presentation, Ito acknowledged that health care issues "change every day" and that his office actually welcomes calls and comments from the public as a way to gauge problems and to help Hawaii residents.
The Affordable Care Act was passed in 2010 with the intention of expanding health care coverage to the vast majority of Americans. Components of the law have been taking effect incrementally since 2010; those provisions include allowing children up to age 26 on their parents' health insurance policy, Ito said.
A major piece of the act took effect this year with everyone in the United States having to purchase a policy or face a health care fee, otherwise known as the individual mandate, Ito explained. Another major development was the opening of health exchanges for individuals seeking insurance.
The insurance commissioner encouraged small businesses to look into receiving a cash credit for enrolling in a 2014 plan under Hawaii's Health Care Connector, the state's health exchange. Those eligible to receive the credit are businesses with 25 employees or less and whose workers' average salary is $50,000 or less, Ito said.
Those who buy plans outside the connector will not receive the credit nor will folks staying with 2013 plans, he said.
The Hawaii Health Care Connector is an online health insurance marketplace that receives funds from the federal government to assist individuals, families and small businesses enroll in health care coverage. The goal is to pool individual health insurance seekers together to bargain with insurers for a better price.
Ito explained that a major difference between the 2013 and 2014 plans is that the latter plan does not give relevancy to the number of sick employees. Costs in the 2013 plans factor in whether some employees had or have major health issues.
But the 2014 plans do factor in age in the cost structure with rates climbing as employees get older. Some may consider this age discrimination, but Ito said it is a fact that older people incur more medical costs on average than younger people.
He said the new law "is trying to get younger folks to pay (for) health insurance."
Other factors used to determine costs in the 2014 plans include tobacco use - with higher rates for those who use tobacco.
Geography also played a role in the preliminary cost structure. Ito said that the federal government proposed having two different regions in Hawaii - Oahu and the Neighbor Islands. Neighbor Island residents were pegged to pay more for insurance.
State officials decided to override the federal regions concept, choosing instead to have just one rate for everyone in the state, he said to applause.
Ito, who grew up in Hilo, empathizes with residents on the Neighbor Islands.
"I understand the Neighbor Islands and how the Neighbor Islands were treated," he said.
* Melissa Tanji can be reached at firstname.lastname@example.org.