04/16/2012 06:02 pm ET Updated Apr 16, 2012

Hawaii Cuts Health-Care Benefits To 3,500 Adults

Hawaii, one of just two U.S. states with a near-universal health care program, will cut off benefits for about 3,500 working-age adults this summer.

The plan supported by Gov. Neil Abercrombie (D) will save the state and the federal government $75 million each by changing the rules governing who receives health coverage under QUEST, Hawaii's Medicaid program, and what the program covers, the Honolulu Star-Advertiser reports. States have struggled to contain Medicaid spending since the economic recession that began in 2007. Huge job losses and long-term unemployment have driven millions on to the program, which is jointly financed by the state and federal governments.

The state will end benefits on July 1 for working-age adults who aren't pregnant, blind, or disabled if they make more than 133 percent of the federal poverty level, or $2,850 a month for a family of four, according to a press release from the Hawaii Department of Human Services. Hawaiians who earn up to 200 percent of the poverty level -- $4,286 for a family of four -- are currently eligible for Medicaid coverage. The state also is establishing new benefit limits for adults who aren't elderly, pregnant, blind, or disabled. Hawaii's Medicaid program provides health care coverage to 286,000 people, which is about 20 percent of the state's residents, according to the Star-Advertiser.

Just 8.8 percent of Hawaiians were uninsured in 2010, which was second only to Massachusetts' 5.7 percent rate. A Hawaii law originally enacted in 1974 requires most employers to provide health benefits, similar to provisions from the then-Gov. Mitt Romney's (R) 2006 Massachusetts health care reform law and the national law signed by President Barack Obama in 2010. Unlike Romney's and Obama's plans, Hawaii doesn't have an individual mandate to obtain health coverage but workers are required to pay a portion of their job-based insurance premiums.

In addition to trimming about 3,500 people off its Medicaid rolls, Hawaii will establish new limits on some covered benefits, the Star-Advertiser reported.

The state will also limit the number of inpatient hospital days for medical and surgical services and for behavioral health -- which are now unlimited -- in the main QUEST plan. Outpatient rehabilitation, optometry services and durable medical equipment, including prosthetics, will no longer be covered.

But about 10,000 adults currently enrolled in a more limited version of the state's Medicaid program will see their benefits enhanced because the state is setting a uniform set of covered services for all adults, the newspaper says. These adults will now have access to prescription drug coverage, for example.