THE SENATE

S.C.R. NO.

30

TWENTY-THIRD LEGISLATURE, 2005

S.D. 1

STATE OF HAWAII

 
   


SENATE CONCURRENT

RESOLUTION

 

requesting an ASSESSment of THE COST TO INSURE A GROUP HEALTH INSURANCE PLAN FOR THE STATE of hawaii BASED ON a RISK POOL EQUIVALENT TO THE STATE'S POPULATION.

 

WHEREAS, according to the State Executive Office on Aging, it is projected that of Hawaii's population of 1,366,770, there will be 437,327 residents between the ages of forty and sixty-four, by 2010; and

WHEREAS, in an attempt to help finance the health care of Hawaii's residents, the Hawaii Legislature has been presented at various times with bills to provide universal health care financing through a "single payer" system whereby a state entity pays health care providers; and

WHEREAS, a single payer system necessarily involves the pooling of risks of health care expenses over all or nearly all of Hawaii's population; and

WHEREAS, the national industry standard for risk transfer insurance is to spread the total cost of the losses over the entire insured population; and

WHEREAS, insurance companies already providing various forms of health insurance in the State include global property and casualty (P & C) insurers, as well as the traditional health insurance companies, such as Kaiser and HMSA; and

WHEREAS, pooling of risks of health care financing through a legislated single payer or similar concept, from time to time, may be insured or underwritten on fixed enrollment periods of one to three years by global insurance companies, combinations of insurance companies, or other entities; and

WHEREAS, privately insuring all or part of a single payer plan, or similar concept, presents a method of financing which may reduce the cost to taxpayers for the program; and

WHEREAS, because of unique features of Hawaii law, it is prudent to begin the search for global insurers qualified to underwrite risk pools equivalent to the size of extremely large corporations or an entire state of over 1.2 million residents, before and during the creation of legislation; and

WHEREAS, an assessment of the market of insurers qualified to underwrite a health insurance risk pool the size of Hawaii's population necessarily includes discussions of "best estimate" premium rates on a contingent or "trial application" basis, for example determining what premium rates would be based on the following assumptions: (1) a risk pool of 1.2 million people; (2) an enrollment period of one year; (3) locally-based claims adjustment and dispute administration; (4) use of the basic policy form required by the Hawaii Prepaid Health Care Act; and (5) appropriate waivers of requirements deemed to be protective of local insurers; and

WHEREAS, the insurance industry standard is that group insurance policies involving 25,000 individuals or more are negotiated contracts, and not offered on preprinted forms on a "take-it-or-leave-it" basis; and

WHEREAS, assessment of and early involvement of qualified global insurers from the property and casualty field, as well as from the traditional health insurance industry is essential to the success of a proposed single payer system that at times may look to world financial markets to underwrite risk pools large enough to finance health care for an entire state or combination of states; and

WHEREAS, Hawaii's unique insurance laws make it imperative that the proposal-counter proposals between qualified global carriers and the State be flexible enough to support the modification, amendment, or even repeal laws that either obstruct the bidding process or enactment of the State's universal group health plan; and

WHEREAS, central to Hawaii's case law impacting insurer involvement in financing health care for the entire State is a line of cases that hold that statutes in force at the time a policy is written are part of the contract, and where the contract and the statutes conflict, the statutes prevail (see Doe v. Paul Revere, 86 Haw. 262, 271, 948 P.2d 1103, 1112 (1997)); and

WHEREAS, the favorable aspects of competition between companies offering health insurance in Hawaii have proven unable to spread the financial risk of health care over the most cost-effective risk pool which is now over 1.2 million people; and

WHEREAS, recent rate increases in HMSA's small business "pool" of about 80,000 members, in comparison with businesses with over one hundred one employees, demonstrate the inability of insurance companies to compete when the premiums are calculated based upon the State's population as the correct risk pool, and competition would be best served by open bidding for the State's program on a one to three year enrollment period; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-Third Legislature of the State of Hawaii, Regular Session of 2005, the House of Representatives concurring, that the Senate and House Committees on Health are requested to conduct an assessment of the availability of insurance to help finance a single payer health insurance program for all of Hawaii's residents based upon a risk pool size of the State population, that includes:

(1) "Best estimate", contingent, or "trial application" premium quotes from global and national insurers qualified to insure groups of over 1,000,000 individuals; and

(2) At a minimum, an estimated premium for the plan required under the Hawaii Prepaid Health Care Act; and

BE IT FURTHER RESOLVED that if H.B. 1304 passes in any form, the temporary healthcare task force established under that measure is requested to conduct any research required in this concurrent resolution under the direction of the Senate and House Committees on Health and to submit a report to the Senate and House Committees on Health; and

BE IT FURTHER RESOLVED that the Senate and House Committees on Health are requested to submit their findings and recommendations to the Legislature, including any necessary implementing legislation, no later than twenty days prior to the convening of the Regular Session of 2006; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the President of the Senate, the Speaker of the House of Representatives, and the Chairs of the Senate and House Committees on Health.

Insurance Program

Report Title:

Feasibility of Insurer Financing of Hawaii Single Payer HEALTH