Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 259, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this bill is to:

The Hawaii Psychiatric Medical Association, National Association of Social Workers, Hawaii Psychological Association, Mental Health Association in Hawaii, Hawaii Medical Association, and several concerned individuals provided testimony in support of this bill. The Department of Commerce and Consumer Affairs testified in support of the bill and requested an amendment. The Hawaii Medical Service Association submitted comments and concerns, and requested amendments. Testimony in opposition to the bill was provided by the Chamber of Commerce of Hawaii.

Your Committee finds that as introduced, this bill repealed the sunset date of the serious mental illness parity requirements under Act 121, Session Laws of Hawaii 2001. As received by your Committee the bill had been amended to also include provisions expanding the definition of "serious mental illness" to include a new set of illnesses.

When any new mandated health insurance coverage is proposed, section 23-51, Hawaii Revised Statutes, requires an Auditor's report assessing the coverage's social and financial effects before it is considered by the Legislature.

Your Committee recognizes that the issue of mental illness coverage parity has been the subject of an Auditor's sunrise study. Your Committee finds, however, that the Auditor's 1997 study does not provide assistance in evaluating the new coverages proposed under this bill. The study was a broad assessment of proposed parity of coverage for the full range of mental health and substance abuse illnesses, and it lacked a certain focus because the term "parity" was undefined. In addition, in 1997 there was little experience with mental illness parity laws because interest in parity at the state level had just been given momentum by the enactment of a federal parity law in 1996.

Your Committee believes that a new study conducted at this time would provide the Legislature with the kind of information needed to make a sound decision on the proposed expanded parity coverage. The study would be focused on the specified additional mental illnesses that this bill would add to the parity law, and could draw upon this State's and other states' experience with parity.

Your Committee notes that a costs study is all the more necessary at this time given the rising cost of health care, recent health plan premium increases, and the potential impact that any new mandated health benefit would have on employers in today's uncertain economic climate.

Accordingly, your Committee has amended this bill by removing the provisions expanding and clarifying the definition of "serious mental illness." Instead, it is your Committee's intent to support a resolution requesting an Auditor's study on the proposed benefits, to be made available for consideration by the Legislature in the 2004 Regular Session.

Other technical, nonsubstantive amendments were made for purposes of clarity and style.

As affirmed by the record of votes of the members of your Committee on Consumer Protection and Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 259, H.D. 1, as amended herein, and recommends that it be referred to the Committee on Finance in the form attached hereto as H.B. No. 259, H.D. 2.