Opinion ID: 779154
Heading Depth: 2
Heading Rank: 1

Heading: Hawaii's Health Insurance Programs

Text: 3 Prior to August 1, 1994, the State of Hawaii provided medical benefits to some of its most financially needy residents through a fee-for-service (FFS) Medicaid program. Medicaid served the aged, blind, and disabled (ABD) population, those receiving Aid to Families with Dependent Children (AFDC), and those receiving general assistance (GA) benefits. Membership in these groups alone did not, however, automatically lead to benefits eligibility. In order to receive Medicaid benefits, group members also had to have an income no greater than 100% of the federal poverty level and assets not in excess of $2,000. 4 In recognition of the fact that these income and asset tests left uninsured a sizable group of the poor, including the working poor, the State extended medical and dental benefits to a gap group whose income was no greater than 300% of the federal poverty level through the State Health Insurance Program (SHIP), a limited FFS program. SHIP did not contain an asset test. Some participants in SHIP were aged, blind, or disabled residents who could not meet the more stringent income and asset requirements of the State's Medicaid program. 5 On August 1, 1994, the State launched a new program, QUEST, to begin transforming its FFS programs into a more cost-effective HMO-based plan. Recipients of GA and AFDC, as well as SHIP participants, were eligible to receive benefits under QUEST if their income was no more than 300% of the federal poverty level, unless they were aged, blind, or disabled. The ABD population was categorically excluded from QUEST on the basis of age, blindness, or disability: 6 Categorical requirements. Persons who are ineligible to participate in Hawaii Health QUEST include the following groups of individuals. 7 (1) Persons who are age sixty-five or older. 8 (2) Persons who are blind or disabled according to the criteria employed by the Social Security Administration. 9 Haw. Admin. R. § 17-1727-13 (1994). The State eliminated its prior FFS programs, except for ABD individuals who qualified under the prior FFS Medicaid criteria. As a result, ABD persons who met the Medicaid income and asset tests retained their benefits under the old FFS system, but several hundred blind and disabled members of the SHIP population were denied any coverage under QUEST. 10 According to its brief, the State excluded ABD persons from QUEST because the lack of actuarial data and anticipated high costs due to their special needs produced lack of predictability, which would result in health care insurers refusing to participate in QUEST. The State asserts that it would have been unable to implement the program without such providers. The State claims that it planned to allow the ABD to receive benefits under QUEST at some later date, after it had demonstrated the success of the initial program. 11 On March 30, 1996, the State amended its QUEST program. Although the State retained QUEST's exclusion of all ABD people, it imposed the same asset test as the Medicaid FFS program for all participants, thereby excluding non-ABD former SHIP members from participation in QUEST as well. See Haw. Admin. R. § 17-1727-14 (as amended Mar. 30, 1996). 1 The question of whether QUEST, as amended, complies with federal law is not before us. 2 Lovell and Delmendo base their claims on the QUEST program as it existed from August 1, 1994 to March 30, 1996.