STAND. COM. REP. NO. 652

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 528
                                        S.D. 2




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B.
No. 528, S.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 exempt health insurers,
mutual benefit societies, health maintenance organizations, and
managed care plans that offer health insurance under federally-
funded programs pursuant to the Social Security Act, from
mandated health coverage requirements.

     Your Committee feels that there is some uncertainty about
whether federal program requirements prevail over mandated
benefits within state insurance laws.  This measure would clarify
that certain federally funded programs are exempt from these
state-mandated benefits requirements.

     Your Committee wishes to note that the Insurance Division's
regulatory role over fiscal solvency is not affected by this bill
and that a health insurer contracting with a federally-funded
program must still meet other requirements of the State's
insurance laws.  Your Committee further wishes to note that it is
concerned that certain benefits and rights may be compromised,
but would like to pass the measure along for the purpose of
continuing discussion.  Your Committee and the Committee on

 
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                                   STAND. COM. REP. NO. 652
                                   Page 2


Commerce and Consumer Protection will continue to work on this
bill.

     Upon further consideration, your Committee has amended this
bill to clarify that only federally funded programs under the
Social Security Act are affected by:

     (1)  Removing the term "entitlement" wherever it appears in
          the bill; and

     (2)  Adding the phrase "under the Social Security Act" in
          sections 1, 2, 3, and 4 of the bill.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of S.B.
No. 528, S.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as S.B. No. 528,
S.D. 2.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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