STAND. COM. REP. NO.  50

 

Honolulu, Hawaii

                , 2013

 

RE:   H.B. No. 1219

 

 

 

 

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

 

Sir:

 

     Your Committee on Health, to which was referred H.B. No. 1219 entitled:

 

"A BILL FOR AN ACT RELATING TO THE TRICARE PROGRAM,"

 

begs leave to report as follows:

 

     The purpose of this measure is to extend the general excise tax exclusion for amounts received by a managed care support contractor of the TRICARE program for the actual cost or advancement to third party health care providers, pursuant to a contract with the United States, for an additional two years.

 

     The Department of Taxation; the Military Officers Association of America, Hawaii Chapter; and UnitedHealthcare, Military and Veterans Services submitted testimony in support of this measure.  The Tax Foundation of Hawaii submitted comments on the measure.

 

     Your Committee finds that the TRICARE program was established by the United States Department of Defense as the managed care component of the military health system.  TRICARE augments the health care services provided by Department of Defense personnel by contracting with third-party administrators, known as managed care support contractors, to establish and maintain networks of TRICARE-authorized civilian health care providers in various regions of the United States.  Your Committee also finds that the managed care support contractors make advances to health care providers, on behalf of the United States Department of Defense, for the costs of health care services provided to TRICARE beneficiaries.  The Department of Defense reimburses managed care support contractors for the actual cost or advancement made to third-party health care providers.  Your Committee further finds that Act 70, Session Laws of Hawaii 2009, provided that amounts received by managed care support contractors of the TRICARE program for the actual cost or advancement to third-party health care providers, on behalf of the federal government, were exempt from the state general excise tax.  This exemption is currently scheduled to be repealed on December 31, 2013.  Your Committee believes that extending this exemption for two additional years will help to avoid cost increases for health care services delivered through the TRICARE program.

 

     As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1219 and recommends that it pass Second Reading and be referred to the Committee on Consumer Protection & Commerce.

 

 

Respectfully submitted on behalf of the members of the Committee on Health,

 

 

 

 

____________________________

DELLA AU BELATTI, Chair