STAND. COM. REP. NO. 883-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2974
                                     




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Health, to which was referred S.B. No.
2974 entitled: 

     "A BILL FOR AN ACT RELATING TO SUBSTANCE ABUSE INSURANCE
     BENEFITS,"

begs leave to report as follows:

     The purpose of this bill is to require that for purposes of
health insurance coverage under individual and group contracts
and other health plans, including QUEST, covered benefits and
services for alcohol or drug dependence should:

     (1)  Be treated the same as any other illness or disease;
          and

     (2)  Should not be subject to lifetime, annual, or other
          limitations if these limitations are not applicable to
          other illnesses or diseases.

     Testimony in support of this bill was submitted by the
Hawaii Substance Abuse Coalition, Mental Health Association of
Hawaii, Community Alliance on Prisons, Hawaii Psychiatric Medical
Association, Equal Insurance Coalition, Hawaii Government
Employees Association, National Alliance for the Mentally Ill
Hawaii, Hawaii Nurses' Association, Hawaii Advisory Commission on
Drug Abuse and Controlled Substances, Hawaii Psychological
Association, and several individuals.  Testimony in support of
the intent of this bill was provided by the Department of Health.
Legislative Information Services of Hawaii commented on the

 
 
                                 STAND. COM. REP. NO. 883-00
                                 Page 2

 
measure.  National Federation of Independent Business, Kaiser
Permanente, and Hawaii Medical Service Association testified in
opposition.

     Your Committee finds that mandating parity in coverage for
alcohol or drug dependence essentially requires that the services
provided be adequate to treat the illness.  The average premium
increase for adequate alcohol or drug dependence coverage is
estimated to be 0.2 percent, or approximately $1 per month for
most families.  In contrast, costs of failing to provide adequate
treatment are borne not only by employers in decreased
productivity, but also by society in general in the form of
increased health care, welfare, and criminal activity costs, as
well as the destructive effect of addiction on families.

     Your Committee is cognizant of section 23-51, Hawaii Revised
Statutes, which requires concurrent resolutions to be passed
requesting the Auditor to conduct a social and financial audit of
proposed mandated health insurance coverage before any
legislative matter can mandate health insurance coverage.  As
such, your Committee will be introducing a concurrent resolution
to conform with the law.

     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 S.B. No.
2974 and recommends that it pass Second Reading and be referred
to the Committee on Consumer Protection and Commerce.

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



                                   ______________________________
                                   ALEXANDER C. SANTIAGO, Chair