STAND. COM. REP. NO. 1649

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.C.R. No. 129
                                        S.D. 1




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.C.R. No. 129, S.D. 1, entitled:

     "SENATE CONCURRENT RESOLUTION REQUESTING THE INSURANCE
     COMMISSIONER TO INVESTIGATE AND DETERMINE THE FAIRNESS OF
     THE ELIGIBLE CHARGE REIMBURSEMENT RATES OF HAWAII'S MUTUAL
     BENEFIT SOCIETIES AND HEALTH MAINTENANCE ORGANIZATIONS,"

begs leave to report as follows:

     The purpose of this Concurrent Resolution is to request the
Insurance Commissioner to investigate and determine the fairness
of the eligible charge reimbursement rates of Hawaii's mutual
benefit societies and health maintenance organizations.

     Specifically, this Concurrent Resolution requests the
Insurance Commissioner to compare and contrast the reimbursement
rates, coverages, and administrative fees of mutual benefit
societies against those of for-profit insurance companies.

     Your Committee finds that the eligible charge reimbursement
rates of mutual benefit societies and health maintenance
organizations may be unfairly low in contrast to the rates of
traditional accident and sickness for-profit insurance companies.
Your Committee is concerned that the reimbursement rates of
mutual benefit societies and health maintenance organizations do
not reflect free market equilibrium levels but are the result of
anti-competitive market practices and stratagems that have

 
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                                   STAND. COM. REP. NO. 1649
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consolidated their dominance within the health insurance
industry.

     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 concurs with the intent and purpose of S.C.R. No. 129,
S.D. 1, and recommends its adoption.

                                 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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