Report Title:

HMOs; Disclosure

Description:

Requires HMOs to make certain disclosures regarding health plans.

HOUSE OF REPRESENTATIVES

H.B. NO.

1669

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to health maintenance organizations.

 

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

SECTION 1. The legislature finds that, as health maintenance organizations in Hawaii have introduced new and confusingly similar individual health plans, eliminated long-standing plans, and made major changes to existing plans that, in effect, created new plans, it has become increasingly difficult for consumers to make informed choices regarding which plan to subscribe to. At the same time as these changes are being made, it has become harder to obtain plan contracts or other reasonably complete plan descriptions on a timely basis.

One health maintenance organization began offering in early October 2002, a choice between at least three individual plans that were to become effective on January 1, 2003. However, while that health maintenance organization immediately began soliciting applications that incorporated by reference the new plan contracts, the actual plan contracts were not made available for review until several months later. Furthermore, the brief summaries provided omitted key information, such as possible early plan termination or medical review requirements that directly affect future premiums and that have other important consequences. The legislature finds that it is the practice of a number of health maintenance organizations to disclose only information that strictly relates to medical coverages and benefits and not disclose other provisions just as important, such as medical review requirements, early plan termination, conversion rights, and specific arbitration requirements.

The purpose of this Act is to require health maintenance organizations to disclose other health plan contract provisions that are not strictly medical in nature in order to enable consumers to make informed choices.

SECTION 2. Section 432D-25, Hawaii Revised Statutes, is amended to read as follows:

"§432D-25 Disclosure of health care coverage and benefits. (a) In order to ensure that all individuals understand their health care options and are able to make informed decisions, all health maintenance organizations shall provide current and prospective enrollees with written disclosure of coverages and benefits, and other substantive plan provisions as enumerated in subsection (c), including information on coverage principles and any exclusions or restrictions on coverage.

(b) The information provided shall be current, understandable, and available to the prospective subscribers prior to enrollment[,]:

(1) Before or at the same time that any application for any policy or contract is offered; or

(2) At least thirty days prior to the final date by which a consumer must choose a plan;

and upon request after enrollment. All health maintenance organizations shall notify all prospective subscribers of the right to obtain any information required to be disclosed pursuant to this section. A policy or contract provided to an enrollee [which] that describes coverages and benefits shall be in conformance with part I of article 10 of chapter 431.

(c) All health maintenance organizations shall include in their disclosure the following:

(1) The possibility of early plan termination by the health maintenance organization and the rights (if any) of consumers to switch to other health plans in such an event;

(2) The existence of any medical review requirement for consumers including:

(A) Basic information about medical review requirements actually in different plans and the possible consequences of such requirements;

(B) Whether a plan requires all, some, or none of its subscribers to undergo medical review, and how this may directly affect subscribers' future premiums; and

(C) Whether participating in a current plan without a medical review requirement may disqualify or prevent a subscriber from participating in other plans that do have medical review requirements in the future;

(3) Notification of whether a health plan, at the end of its term, is being subject to:

(A) Major changes that would alter the basic nature and character of the health plan; or

(B) Only minor changes that preserve the basic nature and character of the health plan; and

(4) Written statement, upon request, of the rate change factors affecting future premiums for each health plan."

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

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________