Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 1065, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this bill is to fairly provide mental health benefits and alcohol and drug treatment coverage in parity with coverage for physical health conditions or diseases.

Your Committee received testimony in support of this measure from the Hawaii Psychological Association. The Department of Commerce and Consumer Affairs supported the intent of this measure. Testimony in opposition of this measure was received from the Hawaii Medical Service Association.

Your Committee finds that consumers should have access under their health policies, to appropriate medical treatment. Putting mental conditions on par with physical conditions is reasonable and fair.

Concern was expressed that the language in this measure is unclear and will allow health maintenance organization, mutual benefit societies, and other health insurers to offer multiple health plans, some of which may not include parity for mental health benefits. This will result in adverse selection of plans with mental health parity as well as increased costs.

Your Committee notes that pursuant to Senate Concurrent Resolution No. 116, House Draft 1, 2003, the Auditor conducted a sunrise review analyzing the social and financial effects of mandating mental health parity (Report No. 04-07). The study considered expanding the parity currently provided for serious mental illness, by amending the definition of "serious mental illness" to include obsessive compulsive disorder, dissociative disorder, delusional disorder, and major depression. Although the audit was inconclusive on the costs of this change, it indicated that, "under Hawaii law, disorders included in the definition of serious mental illness benefit from health insurance coverage on a par with other medical and surgical conditions."

With the prior concurrence of the Health Committee Chair, your Committee has amended this bill by replacing the contents of this bill with that of Senate Bill No. 761. As amended, this bill expands the definition of "serious mental illness" to include obsessive compulsive disorder, dissociative disorder, delusional disorder, and major depression.

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1065, 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. 1065, H.D. 2.