STAND. COM. REP. NO. 2593
RE: S.B. No. 3015
Honorable Colleen Hanabusa
President of the Senate
Twenty-Fourth State Legislature
Regular Session of 2008
State of Hawaii
Your Committee on Commerce, Consumer Protection, and Affordable Housing, to which was referred S.B. No. 3015, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO THE PATIENTS' BILL OF RIGHTS AND RESPONSIBILITIES ACT,"
begs leave to report as follows:
The purpose of this measure is to help protect consumers of health insurance by establishing prohibited practices for managed care plans.
Specifically, this measure adds a new section to chapter 432E, Hawaii Revised Statutes, that:
(1) Prohibits disenrollment of a health plan because of a medical condition;
(2) Prohibits withdrawal of authorization for a procedure by the health plan after the provider has provided health care services;
(3) Prohibits health insurance contract modifications during the term of the contract, unless the modifications are agreed upon;
(4) Prohibits post claims underwriting, such as terminating an individual's health plan coverage because the insurer discovers a medical condition that the individual did not know about at the time of underwriting; and
(5) Provides that eligible charges for nonparticipating providers should be the same as for participating providers.
Testimony in support of this measure was submitted by the Department of Commerce and Consumer Affairs, and the Hawaii Medical Service Association.
Chapter 432E, Hawaii Revised Statutes, relating to the Patients' Bill of Rights, does not contain provisions for unfair or deceptive acts or practices in managed care plans. According to the Insurance Division of the Department of Commerce and Consumer Affairs, this measure is intended to protect consumers by establishing prohibited practices for managed care plans. This measure is based partly on the California Knox-Keene Act regulating managed care plans and federal law.
Your Committee finds that this measure adds protection for consumers by allowing action against insurers by way of complaint or investigation, rather than by external review. Often, consumers cannot obtain legal representation for external review appeals.
Your Committee has amended this measure by:
(1) Changing the effective date from upon its approval to January 1, 2009, to allow time for all health plans to ensure that current contract language complies with the requirements of this measure; and
(2) Making technical, nonsubstantive amendments for the purposes of clarity and style.
Your Committee believes that this measure, as amended, fulfills the intent of this measure, which is to help protect consumers of health insurance.
As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Affordable Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3015, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3015, S.D. 2.
Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Affordable Housing,
RUSSELL S. KOKUBUN, Chair