STAND. COM. REP. NO. 2419

Honolulu, Hawaii

RE:    S.B. No. 2271

       S.D. 2

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2010

State of Hawaii

Madam:

     Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 2271, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO HEALTH INSURANCE PREMIUMS,"

begs leave to report as follows:

     The purpose of this measure is to provide greater transparency and accountability for how insurers spend health care premiums.

     Your Committee received testimony in support of this measure from Hawaii Medical Service Association, Hawaii Association of Health Plans, and one private citizen.  Testimony in opposition to this measure was received from the Insurance Commissioner of the Department of Commerce and Consumer Affairs and ‘Ohana Health Plan.  Testimony with comments was received from the Department of the Attorney General, Hawaii Medical Association, and the American Council of Life Insurers.  Written testimony presented to the Committee may be reviewed on the Legislature's website.

     Your Committee finds that the medical data clearinghouse created by Section 2 of this measure serves the purpose of transparency in the spending of health insurance premium dollars by providing a comprehensive source of information to be used by consumers, the health care industry, the health insurance industry, and government bodies to compare costs, services, and reimbursements across providers in order to be able to make informed choices in selecting health care and formulating health care policy.  Your Committee further notes that health insurance premium spending is spread across a variety of providers and facilities.  To obtain an accurate picture of health insurance premium distribution, transparency across the full spectrum of the health care system is necessary.  Your Committee finds that the health care system is comprised of a broad network of providers, including direct service providers, facilities that house services, and insurers that enable access to services.  The goal of transparency in health care premium spending is only achievable by promoting transparency in the system as a whole.

     Your Committee finds that the minimum spending threshold and transparency reporting requirements established by Section 3 of this measure are an effective means of enforcing transparency in health insurance premium spending.  Your Committee finds that the annual premium transparency report required under Section 3 of this measure will provide focused information on the exact expenditures of premium dollars that will be especially valuable in the context of the larger amount of health care spending information provided by the medical data clearinghouse.

     Your Committee has amended this measure by:

     (1)  Adding a new section to remove a conflicting provision of the current law that would allow a mutual benefit society to exceed the minimum spending threshold established by this measure; and

     (2)  Making nonsubstantive technical changes for the purposes of clarity and accuracy.

     As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2271, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2271, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

____________________________

ROSALYN H. BAKER, Chair