STAND. COM. REP. NO.  681

 

Honolulu, Hawaii

                , 2007

 

RE:   H.B. No. 228

      H.D. 2

 

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

 

Sir:

 

     Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 228, H.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO HEALTH INSURANCE,"

 

begs leave to report as follows:

 

     The purpose of this bill is to promote fair and equitable health insurance rates by:

 

     (1)  Prohibiting health insurance rates that are excessive, inadequate, or unfairly discriminatory; and

 

     (2)  Requiring health care insurers to submit rate filings for approval by the Insurance Commissioner (Commissioner).

 

     The Kokua Council, Hawaii Association of REALTORS, Hawaii Government Employees Association, and a concerned individual supported this bill.  The Department of Commerce and Consumer Affairs supported the intent of this measure.  Kaiser Permanente and the Hawaii Medical Service Association opposed this bill. 

 

     Your Committee finds that the health insurance market in Hawaii is dominated by a handful of insurance providers.  This situation may lead to unfair pricing that harms our residents and hurts our small businesses.  This measure will help to ensure appropriate oversight of health insurance rates.

 

     Your Committee has amended this measure by:

 

     (1)  Deleting the provision specifying that if a managed plan's net worth exceeds 30 percent of its annual health care expenditures and operating expenses, the managed care plan's reserve in excess of 30 percent of its expenditures and expenses shall be reimbursed to hospitals and participating health care providers in proportion to services rendered;

 

     (2)  Establishing that if a managed care plan's current net worth exceeds 30 percent of its annual total expenses, the excess moneys shall be reimbursed to certain subscribers, enrollees, or other customers in accordance with a plan submitted by the managed care plan and approved by the Commissioner; provided that this provision shall not apply to disability insurance;

 

     (3)  Requiring the Commissioner to hold a hearing within 30 working days after receipt of a written request from an aggrieved managed care plan, and requiring the Commissioner to give not less than seven working days written notice of the time and place of the hearing; and

 

     (4)  Making technical, nonsubstantive amendments for style, clarity, and consistency.

 

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 228, H.D. 1, as amended herein, and recommends that it be referred to the Committee on Finance in the form attached hereto as H.B. No. 228, H.D. 2.

 

 

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

 

 

 

 

____________________________

ROBERT N. HERKES, Chair