THE SENATE

S.C.R. NO.

104

TWENTY-FIRST LEGISLATURE, 2002

 

STATE OF HAWAII

 
   


SENATE CONCURRENT

RESOLUTION

 

requesting the governor to convene a blue ribbon commission to examine the advantages and disadvantages of regulating health and dental insurance premiums in the state of hawaii.

 

WHEREAS, the Senate witnessed the introduction of S.B. No. 2302, as well as similar legislation in the House of Representatives relating to the regulation of health insurance premiums; and

WHEREAS, the cost of medical care in Hawaii and across the nation is increasing at an alarming rate; and

WHEREAS, the drivers of rising health care costs are universally recognized to include new medical technology, an aging population, the rising cost of pharmaceutical drugs, unhealthy behavior such as smoking, increasing consumer demand for new health services, and shifting costs from the public to the private sector; and

WHEREAS, the State continues to encounter difficulties in the growth and diversification of its economy and a rising number of uninsured individuals; and

WHEREAS, the Prepaid Health Care Act is the cornerstone of health care access in Hawaii, providing the vast majority of employees with health insurance through a public-private approach; and

WHEREAS, the Prepaid Health Care Act is unique in the United States and has been instrumental in making Hawaii one of the more successful states in ensuring that people have health insurance; and

WHEREAS, Hawaii ranks first, by far, in the United States, with 91 percent of private-sector employers offering health insurance to its employees; and

WHEREAS, proponents of health insurance regulation argue that a health insurance monopoly exists in Hawaii shared between HMSA and Kaiser health plans; and

WHEREAS, proponents also argue that rate regulation would lower premiums, increase health plan competition, and assure rates are not excessive, inadequate, or unfairly discriminatory; and

WHEREAS, proponents also argue that the Insurance Commissioner does not have adequate legal authority to ensure a fair rate-making process; and

WHEREAS, opponents of rate regulation argue that it will not reduce medical cost drivers since both HMSA and Kaiser are approved non-profit community health plans by the National Committee for Quality Assurance, and that health plan rates in Hawaii are already some of the lowest in the nation; and

WHEREAS, opponents also argue that rate regulation could lead to artificially low rates that could result in lower health benefits, reduced doctor choice, or lower quality care for the consumer; and

WHEREAS, opponents also argue that the Insurance Commissioner already possesses substantial legal authority to ensure fair rate making and currently spends thousands of hours in auditing the financial records of health plans; and

WHEREAS, both expert opinion and the experience of other states in regulating health insurance rates presents Hawaii lawmakers with a mixed picture of the impact of this type of legislation; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-first Legislature of the State of Hawaii, Regular Session of 2002, the House of Representatives concurring, that this body requests the Governor to convene a Blue Ribbon Commission to examine the advantages and disadvantages of regulating health and dental insurance premiums in this State; and

BE IT FURTHER RESOLVED that the Governor is requested to appoint a Chair of the Blue Ribbon Commission who:

(1) Is a health care expert associated with institutions not party to this debate;

(2) Will facilitate the development of objective recommendations taking full account of the facts; and

(3) Will assure a fair and unbiased process of deliberation;

and

BE IT FURTHER RESOLVED that one representative from each of the following stakeholders be appointed as a member of the Blue Ribbon Panel:

(1) The Department of Labor and Industrial Relations;

(2) The State Division of Insurance;

(3) A mutual benefit society that provides health insurance under chapter 432, Hawaii Revised Statutes (HRS);

(4) A health maintenance organization that holds a certificate of authority under chapter 432D, HRS;

(5) A dental insurance organization;

(6) The Hawaii Medical Association;

(7) The Hawaii Dental Association;

(8) The Hawaii Health Care Association;

(9) A business organization that represents small businesses with 20 or fewer employees;

(10) A business organization that represents larger businesses with more than 20 employees;

(11) A labor union that represents public-sector employees;

(12) A labor union that represents private-sector employees; and

(13) A consumer health advocacy organization;

and

BE IT FURTHER RESOLVED that the Blue Ribbon Commission is also requested to examine the following:

(1) Whether Hawaii's health plan rates are more or less expensive than those of similar plans and benefits in the rest of the nation;

(2) Whether the administrative costs experienced by Hawaii health plans are lower or higher than those of similar plans and benefits in the rest of the nation;

(3) Whether the financial reserves kept by Hawaii's health plans are lower or higher than those of similar plans and benefits in the rest of the nation;

(4) The current specific authority of the Insurance Commissioner regarding ratemaking;

(5) The specific authority provided for the Insurance Commissioner under proposed legislation;

(6) How insurance rates mandated through rate regulation would help increase health plan competition or help lower costs to consumers;

(7) How rate regulation would further protect consumers;

(8) The impact of rate regulation on Hawaii's business climate;

(9) The impact rate regulation would have on access to quality health care; and

(10) The impact rate regulation would have on the uninsured;

and

BE IT FURTHER RESOLVED that the Blue Ribbon Commission is requested to submit a report of its findings and recommendations to the Governor and the Legislature no later than 20 days prior to the convening of the Regular Session of 2003; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Governor, Director of Labor and Industrial Relations, and the Insurance Commissioner.

 

 

OFFERED BY:

_____________________________

Report Title:

Blue Ribbon Commission; Rate Regulation