CONFERENCE COMMITTEE REP. NO.162-02
Honolulu, Hawaii
, 2002
RE: H.B. No. 1761
H.D. 1
S.D. 2
C.D. 1
Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twenty-First State Legislature
Regular Session of 2002
State of Hawaii
Honorable Robert Bunda
President of the Senate
Twenty-First State Legislature
Regular Session of 2002
State of Hawaii
Sir:
Your Committee on Conference on the disagreeing vote of the House of Representatives to the amendments proposed by the Senate in H.B. No. 1761, H.D. 1, S.D. 2, entitled:
"A BILL FOR AN ACT RELATING TO INSURANCE,"
having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.
The purpose of this bill is to allow the Insurance Commissioner (Commissioner) to regulate the rates of "managed care plans" (health plans), which include health insurers regulated under the Insurance Code, as well as health maintenance organizations and mutual benefit societies.
The bill establishes a prior approval system where proposed rates must be filed with the Commissioner and are subject to a 90-day waiting period before becoming effective. The Commissioner may disapprove rates that are inadequate, excessive, or unfairly discriminatory. The system is similar to that applicable to workers' compensation, motor vehicle, and other property and casualty insurance lines. This bill also requires that managed care plans with reserves exceeding 50 percent of annual health care expenditures and operating expenses return the excess to enrollees, or apply it to stabilize or reduce rates.
Your Committee on Conference recognizes that rate regulation is necessary because Hawaii's noncompetitive health plan market provides no incentive for health plan efficiency and product development. This measure will make health plan rate-making practices more transparent and minimize the over-pricing and under-pricing of insurance products. Ensuring that rates are fair and not excessive will facilitate competition and increase the affordability and availability of health care in Hawaii.
Your Committee on Conference has amended this measure by:
(1) Amending the definition of "rate" to exclude fees and fee schedules paid by the insurer to providers of services covered under the Act; and
(2) Providing that the Act shall be repealed on June 30, 2006.
As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of H.B. No. 1761, H.D. 1, S.D. 2, as amended herein, and recommends that it pass Final Reading in the form attached hereto as H.B. No. 1761, H.D. 1, S.D. 2, C.D. 1.
Respectfully submitted on behalf of the managers:
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ON THE PART OF THE SENATE |
ON THE PART OF THE HOUSE |
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____________________________ RON MENOR, Chair |
____________________________ KENNETH T. HIRAKI, Co-Chair |
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____________________________ DAVID M. MATSUURA, Co-Chair |
____________________________ DENNIS A. ARAKAKI, Co-Chair |
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____________________________ BRIAN T. TANIGUCHI, Co-Chair |
____________________________ DWIGHT Y. TAKAMINE, Co-Chair |
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