HB759

SECTION 1. The legislature finds that it is in the best interest of the State of Hawaii for each and every state citizen to have publicly provided high quality and affordable health care insurance coverage. Health care is more than just medical insurance payouts. It includes cost-saving preventive and early intervention measures to prohibit medical conditions from becoming chronic, permanently disabling, or fatal.

Hawaii's current health care insurance complex is a disjointed, costly, inefficient, and unnecessarily complicated multi-payer private medical insurance model that is mostly profit-driven, adversarial, beset with constant cost-shifting and reluctant health care delivery, onerously bureaucratic, and generally economically irrational. Additionally, health care rates are skyrocketing at or near double-digit annual rates and are creating an affordability and accessibility crisis for Hawaii's residents.

The three biggest cost-drivers of health care in the United States and Hawaii today are associated with the following:

(1) A profit-driven complex of payment-reluctant multi-payer health insurance bureaucracies competing to insure only the healthy and the wealthy, while leaving those who need health care the most to the taxpayers;

(2) The lack of a central electronic health care database; and

(3) High cost prescription drugs.

For more than a quarter of a century, Hawaii was far ahead of most other states and often called itself "the health state" because of the 1974 Prepaid Health Care Act. Hawaii was once known for having a low uninsured population of between two and five per cent in 1994. But, the crisis in health care on the United States continent began coming to Hawaii.

Today, more than one hundred thousand Hawaii citizens are without any health care insurance coverage. More than twelve thousand of the uninsured are children. Many other Hawaii residents are underinsured, unable to really use their insurance properly or even at all, because of increasingly expensive deductibles and out-of-pocket co-payments for outpatient visits, diagnostic tests, and prescription drugs, among other factors

The annual high increase in premium costs translates into increased employer costs. Under the Prepaid Health Care Act, private-sector employers are required to pay at least one-half of health insurance premiums for employees that work twenty hours or more per week. Public employers generally pay even more because of their exemption from the Prepaid Health Care Act and must negotiate with their employees for employer-provided family health care insurance.

The Prepaid Health Care Act does not require employers to provide health insurance coverage for employees working less than twenty hours per week. Increasing health insurance costs has led to many employers hiring individuals to work only part-time, or less than twenty hours per week, to avoid having to pay for employee health care benefits under the Prepaid Health Care Act.

Even well-insured individuals are experiencing problems with their health maintenance organizations and insurance companies denying, or very reluctantly dispensing, expensive medicines and treatments. About half of all bankruptcies are due to extremely expensive catastrophic illnesses that are not covered after a certain cap is reached. Other persons are near bankruptcy with their quality of life seriously impacted.

The legislature further finds that Canada has for many years had a tried, tested, and true universal publicly administered health care-for-all insurance model with one payout agency for caregivers and providers. A variation of this very successful system adapted to meet the unique conditions in Hawaii would be very beneficial for the following reasons:

(1) For union members and their employers, it means taking health care off the negotiating table;

(2) For patients, as taxpayers and insurance premium-payers, it means significant reductions in overall costs, increases in benefits, and the slowing of annual inflation cost increases. It also means a comeback from increasingly uncaring profit-driven health care to the restoration of human-need driven mutually respectful and caring patient-doctor-nurse-and other caregiver relationships, which in earlier times were fundamental to meaningful health care;

(3) For businesses, large and small, it reduces significant overhead expenses;

(4) For the local economy, it means keeping almost all health care dollars in the State;

(5) For government, it means having one integrated electronic health information database for unprecedented planning and cost-containment capabilities. It also means relief from the perceived emerging problem of "unfunded liabilities" associated with long-term funding of government retiree lifetime health care benefits;

(6) For physicians, nurses, and other caregivers, it means less paperwork, much less work stress, and much more time with patients;

(7) For hospitals, community health clinics, homecare providers, and long-term care facilities, it means sufficient and dependable annual financing through global budgets; and

(8) For the general public, it means accessible and affordable health care for every person and relief from the increasing stresses of constant worries over health care coverage instability.

The purpose of this Act is to create a unified, single-payer, universal health care system covering all Hawaii residents, similar to that of Canada's.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

SINGLE-PAYER UNIVERSAL HEALTH CARE SYSTEM

§ -1 Single-payer universal health care insurance system; established. There is established the single-payer universal health care insurance system to provide the same high-quality level of "medically necessary" health care to all Hawaii citizens. Private health care insurers are prohibited from duplicating the coverages provided by the single-payer universal health care insurance system.

§ -2 State health care insurance planning and financing authority. (a) There is established within the department of health, for administrative support purposes, the state health care insurance planning and financing authority, to determine the costs of the system, and to gather together the needed financing methods and transition mechanisms.

(b) Effective July 1, 2008, the functions of the state health planning and development agency shall be transferred to the state health care insurance planning and financing authority, as well as the Prepaid Health Care Act functions and the Hawaii employer union health benefits trust fund, and these functions shall be maintained until the full integration of each into the system can be completed by the state health care insurance planning and financing authority.

(c) Directors of the authority shall be chosen through statewide election, be composed of seven voting members, and meet the same age and residency requirements as candidates for the state senate. There shall be one executive director member elected with no requirement. All members shall be elected by voters statewide for terms of six years each, except that the terms of the six non-executive director members in the first election shall be for two, four, and six years, respectively, with each seat's initial term of two, four, or six years being determined by lottery conducted by the office of elections. Three of the non-executive directors shall be residents of the city and county of Honolulu. Of the other three, one each, shall be a permanent resident of Hawaii county, Kauai county, and Maui county, respectively.

(d) The state health care insurance planning and financing authority shall:

(1) Start up and maintain a trust fund comprised of a pay-as-we-go transfer payments system and a reserve fund;

(2) Negotiate and receive all federal, state, and other appropriate health care revenue;

(3) Assess temporary surcharges on the income and general excise taxes for start-up and for emergency costs as necessary, for instance, during epidemic or other medical catastrophe;

(4) Be the single-payer of universal health care financing (the one payout agency) for Hawaii;

(5) Hire a chief executive officer who shall be accountable for the development and success of the single-payer universal health care system and other staff as necessary; and

(6) Conduct a continuous and ongoing program of enrollment.

(e) The concurrence of a majority of all directors shall be necessary to make any action of the authority valid.

(f) The salary of the executive director shall be $ a year and the salaries of the other members shall be $ a year."

SECTION 3. All rights, powers, functions, and duties of the state health planning and development agency and the Prepaid Health Care Act functions of the Hawaii employer-union benefits trust fund are transferred to the state health care insurance planning and financing authority.

All officers and employees whose functions are transferred by this Act shall be transferred with their functions and shall continue to perform their regular duties upon their transfer, subject to the state personnel laws and this Act.

No officer or employee of the State having tenure shall suffer any loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefit or privilege as a consequence of this Act, and such officer or employee may be transferred or appointed to a civil service position without the necessity of examination; provided that the officer or employee possesses the minimum qualifications for the position to which transferred or appointed; and provided that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

An officer or employee of the State who does not have tenure and who may be transferred or appointed to a civil service position as a consequence of this Act shall become a civil service employee without the loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefits or privileges and without the necessity of examination; provided that such officer or employee possesses the minimum qualifications for the position to which transferred or appointed.

If an office or position held by an officer or employee having tenure is abolished, the officer or employee shall not thereby be separated from public employment, but shall remain in the employment of the State with the same pay and classification and shall be transferred to some other office or position for which the officer or employee is eligible under the personnel laws of the State as determined by the head of the department or the governor.

SECTION 4. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the department of labor and industrial relations regarding the Prepaid Health Care Act, the state health planning and development agency, and the Hawaii employer-union benefits trust fund relating to the functions transferred to the department of health shall be transferred with the functions to which they relate.

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $ , or so much thereof as may be necessary for fiscal year 2007-2008, and the same sum, or so much thereof as may be necessary for fiscal year 2008-2009, for establishment of the state health care insurance planning and financing authority to operate a single-payer universal health care insurance system.

The sums appropriated shall be expended by the department of health for the purposes of this Act.

SECTION 6. This Act shall take effect on July 1, 2007.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	759
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII