Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred S.B. No. 2579, S.D. 2, H.D. 1, entitled:

begs leave to report as follows:

The purposes of this bill are to provide appropriate and cost-effective insurance coverage for mental health and drug and alcohol treatment by:

Testimony in support was received from Kaiser Permanente (supporting S.D. 2 in preference to H.D. 1), Hawaii Medical Association (S.D. 2), Hawaii Psychiatric Association (H.D. 1), Hawaii Government Employees Association (S.D. 2), Blueprint for Change (H.D. 1), Hawaii Psychological Association (S.D. 2), National Association of Social Workers (H.D. 1), Equal Insurance Coalition (H.D. 1), NAMI Hawaii (H.D. 1), NAMI O'AHU (H.D. 1), Hawaii Disability Rights Center (H.D. 1), and four individuals (H.D. 1).

The Department of Health supported the intent of the bill. The Chamber of Commerce of Hawaii testified in opposition (H.D. 1), pending receipt of Auditor's report.

The Hawaii Medical Service Association expressed concerns (H.D. 1). The state Insurance Commissioner took no position but provided comments and concerns.

Perhaps due to the substantial changes that were made by the H.D. 1 to the S.D. 2 of this bill, and the brief time between publication of the H.D. 1 and this Committee's public hearing, some testimony was received in support of the S.D. 2. When only written testimony was provided it was not possible to be certain whether the testimony was a request that the Committee revert to the earlier draft, or simply a reflection of a lack of familiarity with the H.D. 1.

It is perhaps fair to characterize much of the testimony as supporting the S.D. 2 as an incremental improvement over previous drafts, and the H.D. 1 as a separate and more comprehensive effort. However, in some cases such as Kaiser Permanente's testimony, it was clear that the testimony expressed a preference for the S.D. 2.

Your Committee finds that requiring mental health parity represents sound public policy and that insurers should view the treatment of mental illness and alcohol or drug dependence in the same manner as they view the treatment of a physical health condition.

National trends in mental health care are towards expansion of mental health and substance abuse treatment benefits to ensure parity with physical illnesses. Only a very small percentage of the population uses mental health and substance abuse treatment services. It is estimated that only four percent of the population use mental health services, compared to 65 percent who use physical health care services.

Your Committee notes that a major frustration faced by the interested parties and members of the Legislature is a delay in publication of the Auditor's report, which was undertaken pursuant to S.C.R. No. 116. The report was to be submitted 20 days prior to the convening of this session.

While it appears probable that the report will be published within the next two weeks, allowing it to be considered in the event that this bill becomes the subject of a conference committee, this is not what the Legislature requested. The belated response has diminished the value of the report, especially to the members of the general public who were not able to use it in formulating their individual or organizational position on this important measure.

Your Committee has amended this bill by changing the effective date to July 1, 2099. This will assure that there is further opportunity for deliberation, with due regard to the prior concurrence of this Committee.

Technical nonsubstantive amendments were also made for clarity, consistency, 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 S.B. No. 2579, S.D. 2, H.D. 1, as amended herein, and recommends that it be referred to the Committee on Finance in the form attached hereto as S.B. No. 2579, S.D. 2, H.D. 2.