Blast 'em

This Blast 'em blog is going to shine a much needed bright light on legislative shanigans. We will provide details of the wrong doing, give names of the doer, and describe the ramifications to the public. Initially we will focus primarily on consumer issues.

Thursday, May 25, 2006


Remember the last posting regarding the ethics and IRS complaints against Bob Herkes? WeLl here is the reason these things continue to happen at the legislature, The return on investment for a political contribution is better than any other investment a corporation might make.

Representative Herkes receives many thousands of dollars from numerous special interests that have
bills before his committee. During his entire
2004 re-election campaign, Herkes received $31,905 in
donations, with over 60% identified as being from major special-interest groups including finance,
insurance, and developers.

In only the last 6 months of 2005, since assuming the chairmanship of the powerful
Consumer Protection and Commerce Committee, Herkes received $37,280 in donations.
Major corporate campaign contributors to Representative Herkes include;
Tobacco (Phillip Morris, RJ Reynolds), Anheuser-Busch, Pharmaceuticals, the insurance Industry, large engineering and construction firms, and medical laboratories.

We wait with anticipation to see how much money Herkes collects during 2006 period. ;-)

Honolulu Star Bulletin

State officials obligated to keep eye on insurance rates

The state's oversight of health insurance premium increases will lapse next month.

COME June 30, the state will relinquish control of premium rate increases that health insurance companies charge their customers.

Though insurers aren't expected to raise rates significantly without the supervision, state officials and lawmakers have an obligation to monitor the situation carefully and be prepared to reinstate regulation during next year's legislative session. Because Hawaii law requires employers to provide health insurance for their workers, the state must make sure rates are fair.

That requirement was part of the reason the Legislature instituted oversight in 2003, directing insurance companies to submit requests to the state Insurance Division for approval.

Under regulation, companies had to substantiate their need for raising premiums, allowing the commissioner to look over how they calculated rates. It provided accountability for customers and gave employers a window on how they might control their costs.

However, lawmakers allowed the provision to expire despite objections of the insurance commissioner, J.P. Schmidt, who warned that small businesses would be hurt and other insurance enterprises would be deterred from starting up in Hawaii to spur competition in the market.

Schmidt told the Star-Bulletin's Dave Segal that there were times when rate increase levels weren't justified. He calculated that the commission's limitations saved customers more than $18 million directly.

The law's expiration leaves health insurance costs to competitive forces though those don't have much steam since Hawaii's insurance market is dominated by the Hawaii Medical Service Association and Kaiser Permanente Hawaii, both nonprofits that aren't subject to state taxes.

HMSA -- the largest with 705,000 members -- this week reported that its first-quarter earnings increased 11.4 percent, while Kaiser -- a distant second with 226,000 members -- posted a 2.6 percent increase in earnings.

Premiums brought in $24.7 million more for HMSA in the quarter, but health care costs rose in tandem. HMSA's investment income rose by $1.8 million. The company holds $572.7 million in reserves, which it says it needs for emergencies.

Starting July 1, HMSA will raise rates between 3.8 percent and 7.9 percent under its various plans, increases the state approved. Those increases, however, were the last set by regulations and though HMSA's officials say customers should not expect the company will "do anything different," there won't be any way to know if future increases are warranted.


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