HOUSE OF REPRESENTATIVES
THIRTY-FIRST LEGISLATURE, 2021
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO HEALTH CARE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that it is in the best interest of the State of Hawaii for each and every employer-union health benefits trust fund and medicaid beneficiary to have publicly provided, high-quality, and affordable health care. Health care involves more than just medical insurance payouts. It includes cost-saving preventive and early intervention measures, dental coverage, and mental illness treatment to prevent medical conditions from becoming chronic, permanently disabling, or fatal.
The legislature further finds that under Hawaii's current health care insurance system, health insurance companies have used their unilateral control over how health care is organized and paid for to erect obstacles to care for patients, through excessive prior authorizations, formulary restrictions, and networks with limited physician participation. This system also burdens physicians and hospitals with administrative demands such as pay for performance, pay for documentation, and capitation, all of which require much more detailed documentation and data reporting) while controlling and restricting payment for primary care in particular. All of these things are driving Hawaii physicians out of practice or to leave the State.
Furthermore, health care rates are skyrocketing, creating an affordability and accessibility crisis for Hawaii's residents. The two largest cost drivers of health care in the United States and Hawaii are:
(1) The profit-driven complex of payment-reluctant, multi-payer health insurance bureaucracies competing to insure only the healthy and the wealthy, while leaving the individuals who need health care the most to be supported by taxpayers; and
(2) The high cost of prescription drugs.
The legislature further finds that for more than a quarter of a century, Hawaii was far ahead of most other states and often called itself the "health state" because of the Hawaii Prepaid Health Care Act of 1974. Hawaii was once known for having a low percentage of residents without health insurance --between two and five per cent in 1994.
However, the crisis in health care in the United States has also befallen Hawaii. Today, thousands of Hawaii residents, many of whom are children, lack health care coverage. Many other Hawaii residents are underinsured, unable to use their insurance properly or even at all, because of increasingly expensive deductibles and out-of-pocket co-payments for outpatient visits, diagnostic tests, and prescription drugs, among other things. Even well-insured individuals experience problems with their insurers denying, or very reluctantly dispensing, expensive medicines and treatments. About half of all bankruptcies are due to extremely expensive, catastrophic illnesses that are not covered after a certain cap is reached. Other persons are on the verge of bankruptcy, and their quality of life is seriously affected.
In addition, the legislature finds that a publicly administered, self-insured employer-union health benefits trust fund and medicaid health insurance model with one payout agency for caregivers and providers, adapted to meet the unique conditions in Hawaii, would be the most cost-effective form of health insurance for employer-union health benefits trust fund and medicaid beneficiaries. A self-insured employer-union health benefits trust fund and medicaid health insurance system would be beneficial for the following reasons:
(1) For state and county union members and their dependents, as well as their employers, it means assuring health care while removing or greatly simplifying negotiation of health benefits and reducing their cost;
(2) For medicaid beneficiaries and for taxpayers, it means improved access to care, significant reductions in overall costs, increases in benefits, and the slowing of annual inflation cost increases. It also means a return from increasingly-uncaring, profit-driven health care to the restoration of human-need-driven, mutually respectful, and caring patient-doctor-nurse-and other caregiver relationships, which in earlier times were fundamental to meaningful health care;
(3) For the local economy, it means keeping almost all health care dollars in the State;
(4) For government, it means having one integrated, electronic, health information database for unprecedented planning and cost-containment capabilities. It also means relief from the perceived emerging problem of unfunded liabilities associated with long-term funding of government retiree health care benefits;
(5) For physicians, nurses, and other caregivers, it means less paperwork, less work-related stress, and more time to take care of patients covered by the employer-union health benefits trust fund and medicaid;
(6) For hospitals, community health clinics, homecare providers, and long-term care facilities, it means sufficient and dependable annual financing through global budgets; and
(7) For medicaid beneficiaries, it means accessible and affordable health care and relief from the increasing and constant worries concerning health care coverage instability.
The purpose of this Act is to require the employer-union health benefits trust fund and medicaid to work with the Hawaii health authority to design self-insured health benefits programs that are as consistent and as closely aligned as possible, using non-risk administrative services only contracts for necessary administrative functions.
SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
Hawaii self-insured health care system
§ -1 Hawaii self-insured health care system; established. There is established the Hawaii self-insured health care system to provide the same high-quality level of medically necessary health care to all employer-union health benefits trust fund and medicaid beneficiaries.
The purpose of this chapter is to require the employer-union health benefits trust fund and medicaid to work with the Hawaii health authority to design self-insured health benefits programs that are as consistent and as closely aligned as possible, using non-risk administrative services only contracts for necessary administrative functions.
§ -2 Hawaii health authority; employer-union health benefits trust fund; department of human services. (a) The employer-union health benefits trust fund and medicaid division of the department of human services shall collaborate to design and implement self-insured health care programs with consistent features approved by the Hawaii health authority and supported by non-risk administrative services only contracts for necessary administrative functions, including claims processing, credentialing, and administrative support for quality improvement.
(b) The Hawaii health authority, employer-union health benefits trust fund, and medicaid division of the department of human services shall retain responsibility for the design of the health care system, including:
(1) Determining fees and payment systems for hospitals, institutional providers of care, physicians, and other health care professionals;
(2) Setting prior authorization policies;
(3) Determining formularies; and
(4) Designing quality improvement programs and incentives.
These functions shall not be delegated through non-risk administrative services only contracts.
(c) The department of human services shall not execute any contract for medicaid services, unless such services shall be pursuant to a primary care case management model with a non-risk administrative services only contract for necessary administrative functions. As used in this subsection, "primary care case management model" means a system of health care in which a primary care provider is paid a monthly case management fee to assume responsibility for care management and coordination of an enrolled medicaid beneficiary.
(d) It shall be an impermissible conflict of interest for an entity simultaneously to:
(1) Have administrative authority over an employer-union health benefits trust fund or medicaid contract; and
(2) Serve as a medical services provider under such employer-union health benefits trust fund or medicaid contract.
The department of human services shall not execute contracts for medical services provided through a managed care organization."
SECTION 3. Chapter 322H, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§322H- Executive director. The Hawaii health authority shall be authorized to employ an executive director, at a salary not to exceed $ per year. The executive director shall be exempt from chapter 76 and serve under and at the pleasure of the authority."
SECTION 4. Section 322H-2, Hawaii Revised Statutes, is amended to read as follows:
"§322H-2 Hawaii health authority; duties and responsibilities. (a) The authority shall be responsible for overall health planning for the State and shall be responsible for determining future capacity needs for health providers, facilities, equipment, and support services providers.
(b) The authority shall develop a comprehensive health plan that includes:
(1) Establishment of eligibility for inclusion in a health plan for all individuals;
(2) Determination of all reimbursable services to be paid by the authority;
(3) Determination of all approved providers of services in a health plan for all individuals;
(4) Evaluation of health care and cost effectiveness of all aspects of a health plan for all individuals; and
(5) Establishment of a budget for a health plan for all individuals in the State.
(c) The authority shall determine the waivers that are necessary and available by federal law, rule, or regulation necessary to implement and maintain this chapter.
(d) The authority shall adopt rules pursuant to chapter 91 necessary for the purposes of this chapter.
(e) The authority shall submit a comprehensive health plan for all individuals in the State, including its findings and recommendations, to the legislature no later than twenty days prior to the convening of the regular session of 2012.
(f) Pursuant to chapter , the authority shall work with the employer-union health benefits trust fund and medicaid division of the department of human services to design self-insured health benefits programs that are as consistent and as closely aligned as possible, using non-risk administrative services only contracts for necessary administrative functions."
SECTION 5. There is appropriated out of the employer-union health benefits trust fund the sum of $ or so much thereof as may be necessary for fiscal year 2021-2022 and the same sum or so much thereof as may be necessary for fiscal year 2022-2023 for the Hawaii health authority to plan, design, and support self-insured health care programs for employer-union health benefits trust fund and medicaid beneficiaries.
The sums appropriated shall be expended by the department of budget and finance for the purposes of this Act.
SECTION 6. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
SECTION 7. New statutory material is underscored.
SECTION 8. This Act shall take effect on May 1, 2021.
Hawaii Self-insured Health Care System; Hawaii Health Authority; EUTF; Medicaid
Establishes the Hawaii self-insured health care system, to be developed by the Hawaii health authority, EUTF, and medicaid. Effective 5/1/2021.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.