Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1353 entitled:

begs leave to report as follows:

The purpose of this measure is to make an emergency appropriation for the State's medical assistance program.

Specifically, this bill appropriates funds to allow the State's medical assistance program, or medicaid, to continue providing health and health related services to medicaid recipients who are aged, blind, or disabled, and to reimburse health care providers who provide health and health related services to this population.

Your Committee finds that the State's medicaid program's expenses have risen significantly above the levels anticipated for fiscal year 2002-2003. On July 1, 2001, the QUEST managed care program covered 124,258 recipients. Approximately eighteen months later, QUEST has grown by nearly thirteen thousand recipients. A plan to move the high cost aged, blind, and disabled medicaid fee for service population into the QUEST managed care plan has not been implemented because of high start-up costs and high capitation rates for the aged, blind, and disabled population. In addition, the continuing rising cost of prescription drugs is expected to lead to prescription drug expenditures that exceed the amount budgeted by over $12,000,000 for fiscal year 2002-2003.

Your Committee believes that this emergency appropriation will allow the Department of Human Services' medical assistance program to continue providing health care to our neediest population, allowing them to receive the timely medical care they need and deserve.

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 is in accord with the intent and purpose of S.B. No. 1353 and recommends that it pass Third Reading.