Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Health, to which was referred H.B. No. 1259 entitled:

begs leave to report as follows:

The purpose of this bill is to provide that prepaid health care plan contracts will not be subject to the insurance premium tax.

The Department of Commerce and Consumer Affairs (DCCA), Summerlin Life and Insurance Company, H2O Transportation, Hawaii Transportation Association, and Royal State National Insurance Company supported this bill. AlohaCare opposed this bill. The Tax Foundation of Hawaii provided comments on this bill.

DCCA testified that there is limited competition in Hawaii's health insurance market, and that eliminating the premium tax on health insurers will attract for-profit health insurers to Hawaii, promote healthy competition, and provide consumers with more alternatives.

As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1259 and recommends that it pass Second Reading and be referred to the Committee on Consumer Protection & Commerce.