STAND. COM. REP. NO. 164-04

Honolulu, Hawaii

, 2004

RE: H.B. No. 2102

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Health, to which was referred H.B. No. 2102 entitled:

"A BILL FOR AN ACT RELATING TO MENTAL HEALTH AND ALCOHOL AND DRUG ABUSE INSURANCE,"

begs leave to report as follows:

The purpose of this measure is to provide equal treatment by insurers, or parity, for the treatment of mental illness and alcohol or drug dependence as for treatment of a physical health condition.

Specifically, this measure:

(1) For all individual and group accident and health or sickness insurance policies, individual or group hospital or medical service plan contracts, and nonprofit mutual benefit association and health maintenance organization plan contracts:

(A) Prohibits establishing any rates, terms, or conditions that place a greater financial burden on an insured for mental illness treatment than for a physical health condition; and

(B) Requires deductible or out-of-pocket limits to be as comprehensive for mental illness as for a physical health condition;

(2) Defines "mental illness" to include "alcohol or drug abuse dependence";

(3) Defines "rate, term, or condition";

(4) Allows coverage through a managed care organization provided that it complies with rules;

(5) Prescribes the scope of rules to be adopted by the Insurance Commissioner;

(6) Considers a policy to be in compliance with the requirement for parity if at least one choice for treatment of mental illness has rates, terms, or conditions that do not place a greater financial burden on the insured for access to treatment for mental illness than for a physical health condition;

(7) Prescribes who shall provide treatment for mental illness and alcohol or drug dependence, and where;

(8) Requires the Insurance Commissioner to adopt general rules to effectuate the measure;

(9) Requires the Insurance Commissioner to report to the Governor and the Legislature by January 15, 2005 on various items including estimated impact on insurance costs, actions taken, analysis of choices of treatment, and identification of the population that may be excluded from access to treatment;

(10) Provides guidance on construction and transition rules; and

(11) Deems existing rules, provided they are consistent with the measure, relating to eligibility for payment for treatment of mental illness and alcohol or drug dependence, to be the rules adopted by the Insurance Commissioner until the Commissioner adopts new rules or repeals existing rules.

Your Committee received testimony from the Hawaii Youth Services Network, the Equal Insurance Coalition, and HGEA/AFSCME, Local 152, AFL-CIO in favor of this measure; from the Department of Health, the Hawaii Psychiatric Medical Association, and Kaiser Permanente supporting the intent of the measure; from the Insurance Commissioner and the Hawaii Medical Association taking no position on this measure; and from HMSA opposing the measure.

Upon further consideration, your Committee has amended this measure by retaining certain elements of this measure and adding other elements from H.B. Nos. 1869, 2006, and 2003 as follows:

(1) Deleting the language of paragraphs (1) and (6), above, relating to requirement for parity, and replacing it with full parity language from H.B. No. 1869 as a new section in chapter 431M, Hawaii Revised Statutes (mental health and alcohol and drug treatment insurance);

(2) Retaining the definitions of "rate, term, or condition" and "mental illness" in paragraphs (2) and (3), above, and the provision allowing treatment by managed care organizations in paragraph (4) above;

(3) Retaining the provision requiring adoption of rules by the Insurance Commissioner in paragraph (5), above;

(4) Retaining the provision regarding who shall provide treatment for mental illness and alcohol or drug dependence, and where, in paragraph (7) above;

(5) Retaining the requirement for the Insurance Commissioner to adopt general rules to effectuate the measure in paragraph (8) above;

(6) Retaining the provisions relating to the report, guidance on construction, and effect of existing rules in paragraphs (9), (10), and (11) above;

(7) Adding a new section to the income tax law, chapter 235, Hawaii Revised Statutes, to provide a mental health parity supplemental coverage tax credit for employers who pays for such coverage for their employees, of fifty per cent of premiums paid or $500 per employee (H.B. No. 2006);

(8) Adding a new section to chapter 431M, Hawaii Revised Statutes, requiring provision of optional supplemental mental illness and alcohol or drug dependence benefits coverage, the subject of the tax credit (H.B. No. 2006);

(9) Amending section 431M-4, Hawaii Revised Statutes, to delete all language limiting treatment in subsection (a) and requiring treatment to be in accordance with the new section requiring full parity. Also conforms subsections (b) and (c) (H.B. No. 1869);

(10) Repealing section 431M-5, Hawaii Revised Statutes, regarding nondiscrimination in deductibles, copayment plans, and other limitations on payment because the addition of the new section in chapter 431M, Hawaii Revised Statutes, on full parity adequately deals with this issue (H.B. No. 1869);

(11) Adding a new section finding that "ice" addiction is a problem and a new section in chapter 431M, Hawaii Revised Statutes, to specifically provide for parity for treatment for abuse or dependency to crystal methamphetamine starting on January 1, 2004 until June 30, 2010. Also adding a new section requiring that "ice" treatment under QUEST be in accordance with parity requirements beginning on January 1, 2005 until June 30, 2010 (H.B. No. 2003); and

(12) Exempting the entire measure from the requirement for an impact assessment report by the Auditor.

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. 2102, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2102, H.D. 1, and be referred to the Committee on Consumer Protection and Commerce.

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

 

____________________________

DENNIS A. ARAKAKI, Chair