THE SENATE

S.B. NO.

3239

THIRTY-SECOND LEGISLATURE, 2024

S.D. 2

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO MEDICAL DEBT.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that approximately four out of every ten Americans, including those with health insurance, have some form of medical debt, which has become a widespread issue across the nation.  According to a 2022 report from the Peterson-KFF Health System Tracker, approximately three million Americans have medical debt in amounts exceeding $10,000.  Although Hawaii residents generally have less medical debt than residents in other states, approximately one in ten Hawaii residents have outstanding medical debt on their credit reports.  In other states and cities that have acquired and forgiven unpaid medical debt, a majority of forgiven debt was owed by those with health insurance, making it likely that even in Hawaii a significant number of families with health insurance still have unpaid medical debt.

     The legislature also finds that medical debt is a social determinant of health because patients with burdensome medical debt often delay the care they need, may experience problems obtaining employment and housing, have difficulty escaping poverty, and experience mental stress.  The legislature recognizes that due to the massive amounts of outstanding debt owed to hospitals and service providers, a secondary market has emerged whereby commercial debt buyers purchase outstanding and dormant debt owed to health care providers and take aggressive action to collect from families who find themselves unable to pay, further exacerbating the severity of this medical debt crisis.

     The legislature notes that in other parts of the country, nonprofit organizations have successfully purchased billions of dollars in medical debt from healthcare providers and collection agencies and abolished the respective patients' debts altogether.

     The legislature finds that health care providers whose owed debt is sold to third parties for abolishment can equally benefit and are able to address a social determinant of health and enhance community well-being while receiving revenue for dormant patient accounts.

     The purpose of this Act is to authorize the office of wellness and resilience to develop, implement, and execute a program to acquire and forgive outstanding medical debt.

     SECTION 2.  (a)  The office of wellness and resilience may develop, implement, and execute a program to acquire and forgive outstanding medical debt.

     (b)  The office of wellness and resilience may contract with an entity with demonstrated experience partnering with hospitals and health systems to acquire and forgive outstanding medical debt.

     (c)  When developing and executing a program to acquire and forgive outstanding medical debt, the office of wellness and resilience shall:

     (1)  Develop the program to acquire and forgive the medical debt of households at no more than four hundred per cent of the federal poverty level, or households with a medical debt balance of five per cent or more of household income; and

     (2)  Ensure that any specific personal information or health data is collected in compliance with the Health Insurance Portability Act of 1996 and is used for no purpose other than the acquisition and forgiveness of medical debt, provision of financial education, insurance, preventative measures, or similar assistance.

     (d)  The office of wellness and resilience may receive private funds, federal funds, and any funds appropriated by the legislature for the purpose of acquiring and forgiving outstanding medical debt.

     (e)  The office of wellness and resilience shall submit a report of its progress to the legislature no later than twenty days prior to the convening of each regular session.

     SECTION 3.  This Act shall take effect on December 31, 2050.

 

Report Title:

OWR; Health Care; Debt; Forgiveness; Program; Reports to Legislature

 

Description:

Authorizes the Office of Wellness and Resilience to develop, implement, and execute a program to acquire and forgive outstanding medical debt.  Requires annual reports to the Legislature.  Effective 12/31/2050.  (SD2)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.