STAND. COM. REP. NO. 419

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 948
                                        




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

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 948 entitled: 

     "A BILL FOR AN ACT RELATING TO HEALTH FUND MEDICARE PART B,"

begs leave to report as follows:

     The purpose of this measure is to allow eligible retired
beneficiaries of the Public Employees' Health Fund (Health Fund)
to participate in a supplemental plan to Medicare Part B offered
by an employee organization.

     The measure accomplishes this by authorizing the Health Fund
to pay Medicare Part B reimbursements to retired employee-
beneficiaries and their spouses who are enrolled in a
supplemental plan managed by a separate employee organization.

     Testimony in support of the measure was received from the
Hawaii State Teachers Association.  The Department of Budget and
Finance testified in opposition to the measure.  The Public
Employees' Health Fund provided comments on the measure.

     Your Committee finds under existing law, retirant-
beneficiaries of the Public Employees' Health Fund who choose to
subscribe to another organization's supplemental plan to Medicare
Part B are not eligible to receive the same supplemental moneys
provided to retirant-beneficiaries who contract their
supplemental plan to Medicare Part B from the Health Fund.


 
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     Your Committee believes that the measure will help in
addressing the anti-competitive nature of the Health Fund in that
it will encourage retired employee-beneficiaries to enroll in
employee organization health plans.  The resultant effect will be
an exodus of older members of the Health Fund who, because of
their age, cost the Health Fund more to insure.  Consequently,
the loss of older members will lower health plan costs for the
younger members who remain.

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 948 and recommends that it pass Second
Reading and be referred to the Committee on Ways and Means.

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



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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