Report Title:

QUEST; Health Insurance; Subsidy; 300% Federal Poverty Level

Description:

Requires the department of human services to subsidize health insurance coverage for uninsured residents of the State of Hawaii who earn less than 300% of the federal poverty level.

HOUSE OF REPRESENTATIVES

H.B. NO.

2672

TWENTY-THIRD LEGISLATURE, 2006

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

Relating to quest.

 

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

SECTION 1. The cost of health care in Hawaii and the nation is escalating exponentially, and medicaid reimbursements are frequently less than the actual cost of care. In addition, health insurance premium costs and prescription drug costs are rising rapidly.

In recent years, some of the State's largest hospitals have stated that consumers and employers will likely pay more for labor costs through increased hospital fees and higher insurance premiums while receiving fewer services in return.

In 2001, the Hawaii Medical Service Association raised premium rates by approximately five per cent and Kaiser Permanente raised its rates by just under nine per cent. In April 2003, the Hawaii Medical Service Association filed documents with the state insurance division asking for an average rate increase of 11.5 per cent for its community-rated groups.

In September 2003, Kaiser Permanente followed suit by requesting a 14.5 per cent rate hike to finance multi-million dollar new construction projects and a new medical records system.

The increase in premium costs translates into increased costs for employers. Under the State's Prepaid Health Care Act, private-sector employers are required to pay the bulk of health insurance premiums for their employees who work twenty hours or more per week. Because the State's Prepaid Health Care Act does not require employers to provide health insurance coverage for employees working fewer than twenty hours a week, increased health insurance costs offer incentives to employers to hire individuals to work only part-time, or fewer than twenty hours per week, to avoid higher costs.

Another factor of increasing health care costs is that better technology is used in the treatment of illnesses. New technology has greatly improved the quality of life for patients. However, better technology costs more. It is estimated that new technology is responsible for almost fifty per cent of the total increase in health care over the last thirty years.

While Hawaii was once known for having a small uninsured population, between two and five per cent in 1994, health agencies are now concerned about the growing number of uninsured individuals in the State. The Healthcare Association of Hawaii estimates that the current rate of uninsured individuals is ten per cent of the State's population, or approximately one hundred twenty-five thousand residents.

Increased health care costs, insurance premiums, employer costs, prescription drug costs, and long-term care costs, together with the growing number of uninsured individuals and inadequate medicaid reimbursements, have created a need for new and innovative approaches to provide affordable health care for all of Hawaii's residents.

A key component to health insurance in the State has been the QUEST program. Based on the state health insurance program of the 1980s, QUEST provides high quality health care insurance to low-income residents and those in the gap group whose incomes are too high to be eligible for other federal and state programs, but who are not covered under the Prepaid Health Care Act.

When the QUEST program was established, it was believed that by allowing all Hawaii residents who earn less than three hundred per cent of the federal poverty level access to health insurance, the entire uninsured population would be able to obtain some form of health insurance coverage. However, due to financial limitations, the three hundred per cent federal poverty level eligibility requirement was restricted to apply only to one hundred twenty-five thousand low-income residents.

Yet, since these changes were implemented, Hawaii's uninsured population has continued to grow at an alarming rate, increasingly straining the State's workforce and dependence on social programs, as well as compounding the need to provide financial assistance to public and private health care institutions.

Accordingly, the purpose of this Act is to reinstate the three hundred per cent federal poverty level eligibility requirement for all residents with reasonable categorical exclusions to ensure that those who need insurance will have access to insurance through the QUEST program.

SECTION 2. Non-financial eligibility. (a) Applicants and recipients under the QUEST program shall meet the basic eligibility requirements, which include, but are not limited to, United States citizenship or legal resident alien status, state residency, not residing in a public institution, not residing or being a patient of an institution for mental disease or tuberculosis, and provision of a social security number.

(b) Any individual who meets the requirements of subsection (a), and who is not ineligible to participate pursuant to the categorical requirements of this Act, shall be eligible to participate in the QUEST program, including individuals who are recipients of financial assistance under the general assistance program and recipients of Title VI-E foster care maintenance payments who are eligible for medical assistance.

SECTION 3. Residency. (a) For purposes of this Act, a resident of the State of Hawaii is an individual who:

(1) Resides voluntarily in Hawaii with the intent to remain permanently or indefinitely;

(2) Resides in Hawaii and for whom an adoption assistance agreement is in effect under Title IV-E of the Social Security Act, without regard to the state that entered into the agreement with the individual;

(3) Resides in Hawaii and receives Title IV-E foster care maintenance payments, without regard to the state that makes the payments; or

(4) Receives state supplemental payments under the federal supplemental security income program.

(b) An individual retains residence in a given state until that individual abandons residence, such as, but not limited to, the following situations:

(1) Voluntarily indicating intent not to return at the point of or after leaving the state;

(2) Requesting to vote in another state or jurisdiction; or

(3) Declaring and paying taxes as a resident of another state.

(c) A resident who is eligible for medical assistance and who is temporarily absent from the State, with the intention of returning to Hawaii when the purpose of the absence has been accomplished, shall not be deemed to have interrupted the persons' state residency. Within ninety days of the date of the person's departure, the Hawaii Health Alliance shall reevaluate the individual's intent to return to the State.

(d) The state of residency for an individual who is incapable of indicating intent:

(1) If the individual becomes incapable of indicating intent before age twenty-one, shall be either:

(A) That of the individual's parents or guardian, if one has been appointed; or

(B) That of the parent applying for Hawaii health alliance insurance on the individual's behalf, if the parents reside in separate states and there is no appointed guardian;

(2) If the individual becomes incapable of indicating intent at or after age twenty-one, is the state in which the individual was residing when the individual became incapable of indicating intent; and

(3) If the individual is older than twenty-one years of age, in all other cases, is the state in which the individual is living with the intent to reside permanently or indefinitely.

(e) For purposes of this section, an individual shall be considered incapable of indicating intent when:

(1) The individual's intelligence quotient is forty-nine or lower or the individual has a mental age of seven or lower, based upon tests acceptable to the department of health;

(2) The individual is judged legally incompetent; or

(3) Medical documentation or other documentation acceptable to the Hawaii health alliance supports a finding that the individual is incapable of indicating intent.

(f) Medical assistance shall be provided to residents temporarily absent from the State who meet all the conditions of eligibility for medical assistance and require medical services outside the State under circumstances where services were emergent or when it would have been impractical to return to Hawaii for the necessary medical services.

SECTION 4. Residents of public institutions; eligibility. (a) The following individuals shall not be eligible to participate in the QUEST program:

(1) An inmate in a public institution; and

(2) A resident or patient in an institution for mental disease or tuberculosis.

(b) Notwithstanding subsection (a), an individual may be eligible to participate in the program if the individual has been paroled from a public institution or is on conditional release or convalescent leave from an institution for mental disease or tuberculosis.

(c) An inmate of a public institution may apply for the QUEST program, but participation shall not begin until the inmate has been discharged from the institution.

(d) An individual shall not be considered an inmate of a public institution when the individual is in a public educational or vocational training institution for purposes of securing education or vocational training.

SECTION 5. Categorical requirements. Persons who are not eligible to participate in the QUEST program include the following groups of individuals:

(1) Persons who are age sixty-five or older;

(2) Persons who are blind or disabled according to the criteria employed by the Social Security Administration;

(3) Persons who are age eighteen but under age sixty-five, employed, and receive employer sponsored health care coverage through their employer in accordance with chapter 393, Hawaii Revised Statutes; provided that this paragraph shall apply to affected employed persons and not to their dependent family members; and provided further that this paragraph shall not apply to individuals and families covered under the provisions of section 1931 of the Social Security Act, general assistance recipients of financial assistance, and recipients of transitional medical assistance.

SECTION 6. Subsidies. (a) Except for individuals in subsection (c) who shall receive full subsidies, the department of human services shall establish sliding-scale partial subsidies for participants of the QUEST program for the purchase of health insurance coverage paid by individuals or employees whose income is under three hundred per cent of the federal poverty level.

(b) Assets shall be evaluated in the determination of financial eligibility for subsidies in the following manner:

(1) Assets shall be evaluated for an individual or family, excluding assets of pregnant women and children under the age of nineteen;

(2) An individual or family subject to the asset determination, whose total countable assets exceed the personal reserve standard, shall be ineligible for subsidies; and

(3) The following personal reserve standard shall apply:

(A) For an individual or a couple applying for or receiving a subsidy, the personal reserve standard shall be equal to the standard employed by the federal supplemental security income program; and

(B) For each additional family member, $250 shall be added to the federal supplemental security income personal reserve standard for a couple; provided that the resultant amount shall be the standard for that family;

(c) An individual or family whose monthly countable family income does not exceed the following income limits shall be financially eligible for a full subsidy:

(1) A pregnant woman whose income does not exceed one hundred eighty-five per cent of the federal poverty level for a family size that includes the number of unborn children expected;

(2) An infant under one year of age whose family income does not exceed one hundred eighty-five per cent of the federal poverty level for a family of applicable size;

(3) A child age one but under age six whose family income does not exceed one hundred thirty-three per cent of the federal poverty level for a family of applicable size; and

(4) Any other individual whose income does not exceed one hundred per cent of the federal poverty level for a family of applicable size.

(d) A woman whose eligibility is established under subsection (c)(1), shall retain her eligibility for a full subsidy throughout her pregnancy and for a sixty-day period following childbirth until the end of the month in which the sixty-day period ends. The woman's eligibility for a full subsidy shall be redetermined for the first month following the month in which the sixty-day period ends.

(e) For any newborn who is added to a Hawaii health alliance insurance recipient household, eligibility for a partial or full subsidy shall continue for a period of one year following the birth of the newborn; provided the following conditions are met:

(1) The newborn continues to be a member of the mother's household; and

(2) The mother remains eligible for a partial or full subsidy or would have remained eligible if she were still pregnant.

The newborn's eligibility for a subsidy shall be determined for the first month following the month in which a child attains one year of age.

(f) Eligibility shall be redetermined for the first month following the month in which a child will attain the maximum age, for a child whose eligibility for a full subsidy is established under subsections (c)(2) and (3);

(g) An uninsured individual under age nineteen whose monthly countable income exceeds the appropriate income limit under subsection (c) but does not exceed two hundred per cent of the federal poverty level for a family of applicable size shall be financially eligible for a partial subsidy.

(h) For an applicant or recipient, eligibility for a subsidy shall be determined when any of the following conditions are met:

(1) The applicant or recipient has monthly countable income that exceeds the appropriate income limit under subsections (c) or (g); or

(2) The applicant meets any of the categorical requirements for ineligibility pursuant to this Act.

(i) The countable family income shall be determined in the following manner:

(1) For a pregnant woman and a child under nineteen years of age who is born after September 30, 1983:

(A) Subtract a standard deduction of ninety dollars from the monthly gross earned income of each employed individual; and

(B) Add the monthly net earned income for each employed individual as well as any monthly unearned income to determine the countable family income; and

(2) For all other family members, add the monthly gross earned income of each employed person and any monthly unearned income.

(j) When determining the financial eligibility of applicants for a specific calendar month, the applicant's total countable family income for that month shall be used, regardless of the date of application.

(k) A prospective budgeting method employing the department's best estimate of family size, income, and any other relevant factor shall be used in determining continued eligibility for subsidies.

(l) When determining the premium share for applicants or recipients of health insurance under the QUEST program, the total countable family income for a month shall be rounded down to the next lower whole dollar and compared to the federal poverty level.

SECTION 7. There is appropriated out of the general revenues of the State of Hawaii the sum of $          , or so much thereof as may be necessary for fiscal year 2006-2007, for subsidizing health insurance coverage for uninsured residents of the State who earn less than three hundred per cent of the federal poverty level.

The sum appropriated shall be expended by the department of human services for the purposes of this Act.

SECTION 8. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 9. This Act shall take effect on July 1, 2006.

INTRODUCED BY:

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