Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Labor, to which was referred H.C.R. No. 43 entitled:

begs leave to report as follows:

The purpose of this measure is for the Department of Labor and Industrial Relations, in conjunction with Hawaii health plan carriers, to explore options for redesigning the benefit levels of "A" status plans defined under Hawaii's Prepaid Health Care Act (PHCA).

Testimony in support of this measure was submitted by the Hawaii Medical Service Association. Testimony in opposition to this measure was submitted by the Department of Labor and Industrial Relations (DLIR).

Your Committee finds that the cost of medical care in Hawaii, as well as the nation, is rapidly increasing which, coupled with the continued distressed state of the economy, has resulted in an increased number of individuals who lack medical coverage. Currently, the State acts to ensure that individuals obtain medical insurance through the Hawaii PHCA wherein coverage is provided to Hawaii employees through a public-private approach. Your Committee further finds that the PHCA requires qualified prepaid health plans, known as "A" status plans, to provide health care benefits equal to those provided by the prevalent prepaid health plans.

However, as the costs and required benefits for medical coverage under the PHCA have risen over the years, it is incumbent upon the State to explore alternative options to maintain affordability without excessively compromising the level of benefits to be provided. Therefore, your Committee determines that it would be extremely beneficial for the DLIR to work with health plan carriers in order to reassess and redesign the current benefit levels currently existing under the PHCA.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee concurs with the intent and purpose of H.C.R. No. 43, and recommends its adoption.