*This is an archive page. The links are no longer being updated. 1993.07.15 : Hawaii Universal Health Care System Contact: Anne Verano (202) 690-6145 July 15, 1993 HHS Secretary Donna E. Shalala today announced approval of a unique demonstration project that will enable the state of Hawaii to complete its longstanding commitment to creating a universal health care system for its 1.2 million residents. The Medicaid waivers approved today "will enable Hawaii to integrate Medicaid into a more cohesive health care system," Secretary Shalala said. Medicaid will be integrated with two state-funded programs for the uninsured to form a large purchasing pool that will buy health care coverage for 150,000 individuals through a process of competitive bidding for managed- care plans. By using competitive forces in the private sector, the new program is expected to achieve cost savings. The federal share of Medicaid costs will be reduced from $652.8 million to $647.4 million over five years, while expanding Medicaid eligibility. The program will provide quality medical, dental and mental health benefits to individuals whose income is at or below 300 percent of the federal poverty level, with a sliding scale of premium payments for those above 100 percent of the poverty line (except for pregnant women and children below 185 percent of the federal poverty level). These individuals will also have a copayment of $25 per admission for inpatient medical and surgical services. Hawaii already has a health system in which the public programs and employer health plans finance health care for 98 percent of the state's citizens. Since 1983, Hawaii has been the only state with legal authority from Congress to require employers to provide health benefits to their employees. This exemption from the Employees Retirement Income Security Act of 1974 allowed Hawaii to implement a comprehensive, complementary system of public and private sector health insurance coverage. "Hawaii has an exceptional health system for which the demonstration project approved today is especially suited," Secretary Shalala said. Health care benefits for Medicare beneficiaries will continue to be provided by the traditional Medicare program without any changes. "We look forward to working with Hawaii toward an expanded federal-state partnership in building comprehensive health systems for all of its citizens," said Bruce C. Vladeck, administrator of the Health Care Financing Administration, which approved the waivers. EDITOR'S NOTE: HCFA, an agency of the federal Department of Health and Human Services, administers the Medicare and Medicaid programs, which help pay the medical bills of 67 million Americans. HCFA's fiscal year 1993 budget is almost $230 billion. - - - - - - - - - - - - - - - - - - - - - FACT SHEET HAWAII HEALTH QUESTDEMONSTRATION ù HHS Secretary Donna E. Shalala has announced approval of Hawaii's request for Medicaid waivers to implement the Hawaii Health QUEST demonstration. ù The State of Hawaii is unique in having received an ERISA exemption from Congress in 1983. By approving this project, HHS will be able to evaluate the impact of a "seamless" health care system operating under an ERISA exemption. ù Hawaii Health QUEST (.Quality care, ensuring universal access, encouraging Efficient utilization, stabilizing costs, and Transforming the way health care is provided to public clients) is a statewide project which creates a public purchasing pool of 150,000 individuals that will arrange for health care through capitated managed care plans. Under the program, the Medicaid eligibility income limits will be extended to 300 percent of the Medicaid Federal Poverty Level (FPL). ù Hawaii's "seamless" program integrates the Medicaid program with State programs for the uninsured: + Currently, the State-funded General Assistance (GA) program covers those who do not meet Medicaid categorical requirements, but meet the financial criteria. The State Health Insurance Program (SHIP) covers the uninsured up to 300 percent of the FPL. + Under the demonstration, the Federal and State public assistance programs will be combined with all individuals under 300 percent FPL eligible for Federal matching. With all participants in one group, individuals need not apply for different programs as their situations change. + Aged, blind and disabled will continue to receive Medicaid services under the current system. ù Capitated managed care plans + A standard benefit package will be provided under capitated contracts with health plans. + Individuals with incomes above 100 percent of the federal poverty level will pay a sliding scale premium (except for pregnant women and children below 185 percent of the federal poverty level). These individuals will also have a copayment of $25 per admission for inpatient medical and surgical services. + To maintain a capitated rate within a reasonable range, the State will share equally in the risk with health plans for catastrophic costs between $50,000 and $100,000. + Dental services will be provided through a separate plan. The State will utilize one contractor to cover all demonstration participants. + Plans will cover acute mental health. The State will develop a fully capitated managed mental health program for seriously mentally ill. + Long-term care will continue to be provided on a fee-forservice basis and will not be part of this demonstration. + Health care benefits for Medicare beneficiaries will continue to be provided by the traditional Medicare program without any changes. ù Standard benefit package + Under the demonstration, the standard benefit package will include all services covered by Medicaid. o Impact on Beneficiaries Eligibility + Financial eligibility - all individuals with income up to 300 percent FPL are eligible. There is no maximum asset limit. Currently, 98 percent of Hawaiians are insured either through private or public programs. + The existing medically needy program for AFDC-related groups will be eliminated. ù Budget The State estimates that the Medicaid program will save $5 million over the 5-year demonstration. The federal share will drop from $652.8 million to $647.4 million over five years.