Report Title:

Mandated Health Coverage; Cap; Panel

 

Description:

Creates a mandated health insurance service review panel to assess social, medical, and financial impacts of mandated health insurance coverage and recommend a cap on the cost of mandated health insurance coverage in terms of percentage of average annual state wage. Repeals the state auditor's duty to review such proposals. (HB237 HD2)

 

HOUSE OF REPRESENTATIVES

H.B. NO.

237

TWENTY-FIRST LEGISLATURE, 2001

H.D. 2

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to mandated health coverage review.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter   

MANDATED HEALTH COVERAGE REVIEW

   -1 Definitions. As used in this chapter, unless the context clearly requires otherwise:

"Carrier" means:

(1) An insurer under chapter 431, article 10A;

(2) A mutual benefit society providing hospital and medical service health coverage under chapter 432;

(3) A health maintenance organization under chapter 432D; or

(4) Any other person who provides health benefit plans subject to regulation by the State.

"Mandated health insurance service" means a legislative proposal or a statute that would require a particular health care service to be provided or offered in a health benefit plan by a carrier or other organization authorized to provide health benefit plans in the State.

"Review panel" means the review panel on mandated health insurance services.

   -2 Review panel on mandated health insurance services; established. (a) There is created the review panel on mandated health insurance services within the department of commerce and consumer affairs for administrative purposes only.

(b) Membership in the review panel shall be composed of fourteen members. The insurance commissioner, the auditor, and the director of health shall be ex-officio voting members. The insurance commissioner shall serve as chairperson. The governor shall appoint the following eleven members:

(1) The chairperson of the senate committee on ways and means, or designee;

(2) The chairperson of the house committee on finance, or designee;

(3) One member who is a licensed registered nurse;

(4) One member who is a licensed physician;

(5) Three members who represent carriers, including:

(A) One representing an insurer under chapter 431, article 10A;

(B) One representing mutual benefit societies under chapter 432; and

(C) One representing health maintenance organizations under chapter 432D;

(6) One member who is a health economist; and

(7) Three members who represent the business community.

(c) Each member appointed by the governor shall serve for a term of three years; provided that the governor shall initially appoint four members to serve for one year, four members to serve for two years, and three members to serve for three years.

(d) A member whose term has expired may continue in office as a holdover member until a successor is elected; provided that the holdover shall not hold office beyond the end of the second regular legislative session following the expiration of the member's term of office.

(e) Vacancies occurring before the expiration of a member's term shall be filled by election of the review panel. Individuals elected to fill a vacancy shall serve only for the remainder of the unexpired term.

(f) If six vacancies exist at any one time, no remaining member shall resign until at least one vacancy has been filled in accordance with this section.

(g) The review panel shall appoint from its members a vice chairperson and secretary and any other officers that the review panel may deem necessary or desirable to carry out its functions.

(h) Eight members shall constitute a quorum, whose affirmative vote shall be necessary for all actions by the panel.

(i) Members shall serve without compensation, but may be reimbursed for the necessary expenses, including travel expenses, incurred in the performance of their duties.

(j) No person shall serve on the review panel who has any actual or potential conflict of interest as defined in chapter 84.

(k) All review panel meetings shall be open to the public pursuant to chapter 92. However, when it is necessary for the review panel to receive information that is proprietary or confidential, the review panel may enter into closed executive session.

   -3 Duties of the review panel. The review panel shall have the following duties:

(1) To determine a baseline for assessment of a proposed health insurance service, the review panel shall review and evaluate the health benefits provided to public employees by the public employees health fund health benefit plans or by employee organization health benefit plans under chapter 87. The review shall determine:

(A) The premium cost of benefits for medical coverage as a percentage of the average annual wage as determined by the department of human resources development, assisted by the department of accounting and general services; and

(B) The portion of the premium attributable to mandated health insurance services;

(2) Assess the social and financial impacts of a proposed mandated health insurance service by considering:

(A) Social impacts including:

(i) The extent to which the insurance coverage is used by a significant portion of the population;

(ii) The extent to which the insurance coverage is already generally available;

(iii) If coverage is not generally available, the extent to which the lack of coverage results in individuals avoiding necessary health care treatment;

(iv) If coverage is not generally available, the extent to which the lack of coverage results in unreasonable hardship;

(v) The level of public demand for the service;

(vi) The level of public demand for insurance coverage of the service;

(vii) The level of interest of collective bargaining agents in negotiating privately for inclusion of this coverage in group contracts; and

(viii) The extent to which the mandated health insurance service is covered by self-funded employer groups of employers in the State who employ at least five hundred employees; and

(B) Financial impacts including:

(i) The extent to which the coverage will increase or decrease the cost of the service;

(ii) The extent to which the coverage will increase the appropriate use of the service;

(iii) The extent to which the mandated services will be a substitute for a more expensive service;

(iv) The extent to which the coverage will increase or decrease the administrative expenses of carriers and the premium and administrative expenses of policyholders, members of mutual benefit societies, and subscribers of health maintenance organizations;

(v) The impact of this coverage on the total cost of health care; and

(vi) The impact of all mandated health insurance services on employers' ability to purchase health benefits policies meeting their employees' needs.

   -4 Initial evaluation of cost; recommend cap. (a) The review panel shall conduct an initial evaluation of the cost of existing mandated health insurance services and submit its findings to the governor and the legislature no later than twenty days prior to the convening of the regular session of 2005.

(b) The review panel shall recommend in its initial report an appropriate percentage of the average annual wage in the State that the total cost of mandated health insurance services may not exceed. The review panel shall take into consideration in its recommendation the percentage of the average annual wage in the State that relates to the premium associated with:

(1) The current mandated health insurance services enacted in the State for a typical group and individual health benefits plan; and

(2) The benefits provided under the public employees health fund under chapter 87.

   -5 Reports. The review panel shall annually report its assessment to the governor and the legislature no later than twenty days prior to the convening of each regular session.

   -6 Carriers to submit data. The review panel may make reasonable requests of carriers to submit data on the cost of a mandated service, use of a mandated service, or other information as determined appropriate to carry out the purposes of this chapter.

   -7 Staff services. The office of the insurance commissioner shall provide staff support to the review panel and may contract for actuarial services and other professional services to carry out the purposes of this chapter.

   -8 Proposed mandatory health insurance service. If a member of the legislature introduces a legislative measure for a proposed mandatory health insurance service on or before July 1 of any year, the review panel shall review and evaluate the proposal in accordance with this chapter and submit its report to the governor and the legislature on or before December 1 of the same year."

SECTION 2. Section 23-51, Hawaii Revised Statutes, is repealed.

["23-51 Proposed mandatory health insurance coverage; impact assessment report. Before any legislative measure that mandates health insurance coverage for specific health services, specific diseases, or certain providers of health care services as part of individual or group health insurance policies, can be considered, there shall be concurrent resolutions passed requesting the auditor to prepare and submit to the legislature a report that assesses both the social and financial effects of the proposed mandated coverage. The concurrent resolutions shall designate a specific legislative bill that:

(1) Has been introduced in the legislature; and

(2) Includes, at a minimum, information identifying the:

(A) Specific health service, disease, or provider that would be covered;

(B) Extent of the coverage;

(C) Target groups that would be covered;

(D) Limits on utilization, if any; and

(E) Standards of care.

For purposes of this part, mandated health insurance coverage shall not include mandated optionals."]

SECTION 3. Statutory material to be repealed is bracketed and stricken.

SECTION 4. This Act shall take effect on July 1, 2003.