Turns out there’s a lot more going on at the Hawaii Employer-Union Health Benefits Trust Fund (EUTF) than the recent dispute with HMSA.

A review of recent minutes shows the EUTF board has struggled with a string of monthly losses earlier in the year, serious disagreements on revised plans and rates, concerns over the state’s “social contract” with retirees, and fears about the system’s ability to keep up with rising costs and fund health care in the long-term.

For several months over the summer, EUTF trustees met out of public view with the assistance of a federal mediator in order to try to forge an agreement on policies and rates for the next year, a process that had never been used previously.

At its March 18, 2009 meeting, the EUTF board unanimously passed a motion to request the assistance of federal mediator Ken Kawamoto to bridge the gap between trustees representing unions and the public employers, the state and counties.

One benefit seen in entering into mediation was that the sunshine law would not apply, trustees were told. Instead, the mediator would set the rules. Any decisions would have to be reserved for later public meetings of the EUTF board.

The board considered, but rejected, the possibility of having the mediator take part in a board executive session rather than a separate mediation process.

Following what was apparently a long and complex discussion, the board voted unanimously to request the assistance of the federal mediator in order to reach agreement on setting of rates and benefit plans. The first meeting was held on March 30, 2009. In late May, trustees were told that one employer proposal had failed, and no other progress was reported.

Meanwhile, trustees were told that more medical claims were being filed than expected, leading to monthly losses.

EUTF Administrator Jim Williams “stated with all the turmoil and uncertainty, he has heard unions are telling their members to go to the doctor now and believes it is affecting the utilization.”

In July, EUTF trustees were told that the spike in the number of members going to their doctors had caused a $10 million loss during the month of May alone.

The loss, one of several monthly losses, prompted serious concern among trustees.

Trustee Radcliffe wants to clarify that the EUTF had over $72 million a year ago but because of recurring expenses we are using reserves at an increasing rate to a point now the EUTF is down to approximately $9.9 million in reserves instead of $72 million in reserves and by the end of next month the EUTF will be at zero. [minutes of the July 15, 2009 meeting]

The discussion continued, according to the minutes:

There is no doubt in Trustee Radcliffe’s mind having been involved in union and public employment business for years that when times are tough like this, people get upset and use their benefits as much as they can. If there is a spike it is because of all the talk in the community about losing benefits, furloughs, lay-offs, and because of this people gets sick.

The board decided to create a 4-member subcommittee to investigate the issues as part of the ongoing mediation. The cover of mediation allowed bypassing of sunshine requirements, and the smaller 4-member committee would make it easier to schedule meetings and make progress, trustees were told.

In August, EUTF abandoned a move to set up a mandatory “wellness” program designed to help members control their weight, blood pressure, diabetes, and other common ailments due to poor diet and lack of exercise. Despite predicted cost savings from such a move, the board was advised that a mandatory program would face a legal challenge. As a result, the board backed off and cancelled a planned request for proposals.

This prompted one trustee to express his concerns:

Trustee Radcliffe stated that the cost of health insurance for the EUTF member was $6,000.00 and we are going to average $7,300.00 and information that we got about the future indicates that 9 or 10 years from now all things being equal, it would be in the neighborhood of $50,000 per person/year which means our system will be pretty much destroyed by that point. Unless something is seriously done to change that path we are on, we will continue on that path.

I’m still plowing through EUTF minutes. There are lots of stories buried here.

Given the fact that all state and county employees and retirees are impacted by EUTF policies, it’s amazing how under reported its debates and discussions are.