Report Title:

Public Assistance

Description:

Clarifies that covered loss deductible does not include public assistance benefits. (HB2459 HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

2459

TWENTY-SECOND LEGISLATURE, 2004

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO PUBLIC ASSISTANCE.

 

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

SECTION 1. The legislature finds that there is a need to clarify that public assistance benefits are not personal injury protection benefits for purposes of the covered loss deductible under section 431:10C-301.5, Hawaii Revised Statutes.

While the medicaid program provides medical assistance to the needy of our community, by congressional mandate, the program and its participants are required to seek reimbursement of medical assistance from all individuals or entities responsible for payment. Additionally, as a precondition to eligibility, all recipients of medical assistance are required to assign their rights to benefits in these cases. The federal share of the reimbursable assistance cost is owed to the federal government if the money could have been recovered.

Under the current law, the covered loss deductible reduces the recovery for bodily injury. When the covered loss deductible has been applied to reduce the recovery so that the federal share cannot be fully reimbursed, the State owes to the federal government the amount that could have been collected if the covered loss deductible had not been allowed by state law. The current law also has the effect of penalizing the recipients of public assistance by requiring that they reimburse the state and federal government for the public assistance they received while allowing the defense insurance company to evade reimbursement, thereby creating a situation where the recipient is in effect paying twice.

The purpose of this bill is to clarify that the covered loss deductible does not include public assistance benefits.

SECTION 2. Section 431:10C-301.5, Hawaii Revised Statutes, is amended to read as follows:

"431:10C-301.5 Covered loss deductible. Whenever a person effects a recovery for bodily injury, whether by suit, arbitration, or settlement, and it is determined that the person is entitled to recover damages, the judgment, settlement, or award shall be reduced by $5,000 or the amount of personal injury protection benefits incurred, whichever is greater, up to the maximum limit. The covered loss deductible shall not include benefits paid or incurred under any optional additional coverage[.] or benefits paid under any public assistance program."

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

SECTION 4. This Act shall take effect on July 1, 2010.