Bill Text: HI SB1179 | 2025 | Regular Session | Introduced
Bill Title: Relating To Health Care.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2025-01-27 - Referred to CPN/HHS, WAM. [SB1179 Detail]
Download: Hawaii-2025-SB1179-Introduced.html
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THE SENATE |
S.B. NO. |
1179 |
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THIRTY-THIRD LEGISLATURE, 2025 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to health care.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
PART I
SECTION 1. The legislature finds that the delivery of health care services in the State has approached crisis levels. Many physicians and other health care providers are leaving Hawaii, and the level of health care services on the neighbor islands in particular is seriously deficient.
The legislature further finds that, even with the 1974 Hawaii Prepaid Health Care Act that mandates employers provide health insurance for employees working at least nineteen hours per week, and even with the extensions of medicaid to larger populations in the State and the increase of commercial health insurance coverage created by the federal Patient Protection and Affordable Care Act (PPACA), there remain a substantial number of uninsured or underinsured individuals. Additionally, the linkage of health insurance to employment status, which many years ago was an employment benefit, has now become a serious impediment to employee mobility. A substantial number of people feel financially compelled to remain in unsatisfactory employment situations to protect their access to health insurance and therefore to health care.
The legislature finds that it is in the best interest of the State for each and every state citizen to have publicly provided, high quality, affordable health care. Health care is more than just medical insurance payouts. It includes cost-saving, preventive, and early intervention measures to prevent medical conditions from becoming chronic, permanently disabling, or fatal and includes proven secondary and tertiary prevention strategies and interventions to maintain the health and quality of life of those who are burdened with serious chronic diseases.
The legislature additionally finds that Hawaii's current health care insurance system is a disjointed, costly, inefficient, and unnecessarily complicated, multi-payer, private medical insurance model that is largely profit-driven, adversarial, beset with constant cost-shifting and reluctant health care delivery, onerously bureaucratic, and economically irrational. Additionally, health care costs are skyrocketing, creating an affordability and accessibility crisis for Hawaii's residents. The three largest cost-drivers of health care in the United States in general and in Hawaii in particular are:
(1) The administrative cost of a profit-driven complex of payment-reluctant, multi-payer health insurance bureaucracies competing to insure the healthy, while leaving those who need health care the most to the taxpayers, or competing to siphon money out of the state medicaid budget while beneficiary access to care deteriorates and costs rise;
(2) Lack of access to cost-effective primary care for large segments of the population; and
(3) The high cost of prescription drugs.
The legislature further finds that 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 Hawaii Prepaid Health Care Act. Hawaii was once known for having a low uninsured population of between two and five per cent in 1994. Hawaii had the lowest per-capita medicare spending in the country in 2008-2009, prior to the PPACA when almost all Hawaii providers of care were paid with fee-for-service. Ten years later Hawaii had climbed to ninth lowest per-capita medicare spending and rising.
However, the crisis in health care in the United States has also befallen Hawaii. Today, thousands of Hawaii citizens lack health care coverage, many of whom are children. Many other Hawaii residents are underinsured or unable to use or access their covered benefits because of increasingly expensive deductibles and out-of-pocket co-payments for outpatient visits, diagnostic tests, and prescription drugs, among other factors. Even well-insured individuals experience problems with their insurers 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. And even with health insurance, Hawaii residents are experiencing increasing difficulty finding doctors when they need them on all islands, but especially on the neighbor islands.
The legislature therefore concludes that a universal, publicly administered, health care-for-all insurance model with one payout agency for caregivers and providers, adapted to meet the unique conditions in Hawaii, would be beneficial across all sectors in the State. A single payer system would remove health care as a factor in labor negotiations; reduce overall costs and generate savings for patients; streamline processes for health care providers; reduce overhead expenses for businesses; create a single, centralized health information database for all residents in Hawaii, allowing for more informed decision making regarding health crises in the State; create an equitable allocation of public health resources and provide for a needs-based expansion of health care facilities; reduce billing and collections costs for hospitals and independent health care providers; and eliminate profit-based decision making in the provision of health care services.
Accordingly, the legislature concludes that Hawaii should take substantial steps toward the establishment of universal health care for the residents of the State and to encourage, as much as practical, reduction of administrative complexity in the compensation of the State's hospitals and other institutional providers of care, and of physicians and other workers in the health care field. This should be accomplished by the creation of a publicly financed health care program, to be known as "malama care", for all Hawaii residents and which shall replace all existing health care systems in the State once the appropriate federal waivers are obtained, including medicare, Medicaid, and the prepaid health care act.
The purpose of this Act is to initiate the implementation of malama care by:
(1) Requiring the Hawaii health authority to develop a universal, single payer health care plan to be implemented as malama care;
(2) Establishing malama care; and
(3) Appropriating funds.
PART II
SECTION 2. Chapter 322H, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:
"Part . Malama care
§322H-A Definitions. For the purposes of this part:
"Malama care" means a universal, single payer health care system to provide comprehensive health care benefits to all residents of the State.
"Resident" means an individual who is or intends to be domiciled in the State.
§322H-B Hawaii health authority; malama care; duties and responsibilities; benefits. (a) The authority shall be responsible for the overall planning and implementation of malama care.
(b) The authority shall develop a comprehensive universal, single payer health plan that includes:
(1) Establishment of eligibility for inclusion in a universal, single payer health care system for all residents of the State;
(2) Determination of the sequencing and financing requirements for a universal, single payer health care system;
(3) Determination of the cost for providing a benefits package to all residents of the State that includes all mandatory health care benefits pursuant to section -4;
(4) Recommendation if a benefits package established pursuant to paragraph (3) should include rehabilitation services in a skill nursing facility and long-term care in a skilled nursing facility;
(5) Evaluation of health care and cost effectiveness of all aspects of a universal, single payer health plan for all individuals;
(6) Establishment of a budget for a universal, single payer health plan for all residents of the State; and
(7) Establishment of a budget for all hospitals operating under malama care in the State.
(c) The authority shall determine the waivers that are necessary and available by federal law, rule, or regulation necessary to implement and maintain this part.
(d) The authority shall adopt rules pursuant to chapter 91 necessary for the purposes of this part.
(e) The authority may establish any subcommittees necessary for the purposes of this section.
§322H-C Business plan. (a) The authority shall develop a comprehensive business plan to govern and manage the steps necessary to establish malama care. The business plan shall include fiscal projections of revenues and expenses over a five-year period for a public-private universal health care system providing benefits as establish pursuant to section 322H-A with an actuarial value of ninety-five per cent when fully implemented. The business plan shall include mechanisms for funding malama care, including any proposed income tax or surcharge.
§322H-D Malama care; goals; values. The authority shall ensure that any plan established pursuant to section 322H-B shall be based on the following principles:
(1) Health care, as a fundamental right for all residents of the State, is to be secured for all individuals on an equitable basis by public means, similar to public education, public safety, and other public infrastructure;
(2) Access to health care services shall be based on each individual's need and shall not be restricted based on race, sex, sexual orientation, gender identity or expression, religion, national origin, citizenship status, age, pregnancy and related medical conditions, disability, wealth, income, genetic conditions, primary language use, or previous or existing medical conditions; and
(3) The components of the health care system shall be accountable and fully transparent to the public with regards to information, decision making, and management to ensure meaningful public participation in decisions affecting the public's health care.
§322H-E Research. The authority shall conduct research on the following to prepare for adoption of a universal, single payer health plan for all individuals in the State:
(1) The causes, consequences, and means to mitigate health care provider burn-out in the State;
(2) Current compensation practices adopted by health insurers, mutual benefit societies, and health maintenance organizations operating in the State; and
(3) Any other current financial practices relating to health care.
§322H-F Reporting requirements. Beginning with the regular session of 2026, the authority shall submit an annual report to the legislature no later than twenty days prior to the convening of each regular session. The report shall include:
(1) Progress on the implementation of malama care;
(2) The business plan required by section 322H-C;
(3) Any findings and recommendations based on research conducted pursuant to section 322H-E; and
(4) Any other findings, recommendations, or proposed legislation, including proposed legislation for the repeal of the prepaid health care act and Hawaii health systems corporation, that the authority deems relevant for the implementation of malama care."
SECTION 3. Chapter 322H, Hawaii Revised Statutes, is amended by designating sections 322H-1 and 322H-2 as part I and inserting a title before section 322H-1 to read as follows:
"PART I. GENERAL PROVISIONS"
PART III
SECTION 4. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
"Chapter
malama care
§ -1 Definitions. For the purposes of this chapter:
"Authority" means the Hawaii health authority established pursuant to chapter 322H.
"Cost sharing" means copayment, coinsurance, or deductible provisions applicable to coverage for medications and treatment.
"Health care facility" means an institution providing health care services or a health care setting, including but not limited to hospitals and other licensed inpatient centers; ambulatory surgical or treatment centers; skilled nursing centers; residential treatment centers; diagnostic, laboratory, and imaging centers; and rehabilitation and other therapeutic health settings.
"Health care provider" means an individual licensed, accredited, or certified to provide or perform specified health care services in the ordinary course of business or practice of a profession consistent with state law.
"Hospital" means a facility licensed under section 321-14.5.
"Resident" means an individual who is or intends to be permanently domiciled in the State.
"Supplemental health insurance" means insurance provided by a health insurer regulated under article 10A of chapter 431; mutual benefit society regulated under article 1 of chapter 432; health maintenance organization regulated under chapter 432D; or through the TRICARE program.
§ -2 Malama care; established; administration; solicitation of bids. (a) There is established a universal, single payer health care system, to be known as malama care and to be administered by the Hawaii health authority.
(b) The authority may, subject to the requirements of chapter 103D, solicit bids from and award contracts to public or private entities for the administration of malama care including but not limited to:
(1) Claims administration;
(2) Quality assurance;
(3) Credentialing;
(4) Provider relations; and
(5) Customer service.
(c) The authority shall ensure than any entity awarded a contract pursuant to this section does not have a financial incentive to restrict individuals' access to health care.
(d) The authority may establish performance measures and provide incentives for contractors to provide timely, accurate, and transparent services to enrollees and health care providers.
§ -3 Malama care special fund. (a) There is established in the state treasury a malama care special fund, to be administered and expended by the authority.
(b) The following shall be deposited into the special fund:
(1) Appropriations by the legislature;
(2) Gifts, donations, and grants from any private individuals or organizations; and
(3) Federal funds granted by Congress or executive order for the purpose of this chapter.
(c) The malama care special fund shall be used solely for expenses incurred in the execution of malama care, including but not limited to:
(1) Salaries and overhead;
(2) Payments to third party contractors contracted to administer portions of malama care;
(3) Reimbursements to health care providers, health care facilities, and hospitals for health care services rendered to residents of the State that are covered by malama care; and
(4) Capital improvement projects.
(d) The authority shall establish a subaccount within the malama care special fund for community-based specialized services for patient with complex or highly specialized care needs. The authority may establish additional subaccounts within the fund as necessary.
(e) All unencumbered and unexpended moneys in excess of $ remaining on balance in the malama care special fund at the close of June 30 of each year shall lapse to the credit of the state general fund.
(f) The authority shall submit a report to the legislature, no later than twenty days prior to the convening of each regular session, providing an accounting of the receipts and expenditures of the fund.
§ -4 Mandatory health care benefits; electronic insurance card. (a) Without limiting the development of medically more desirable combinations and the inclusion of new types of benefits, malama care shall cover at least the following benefits:
(1) Hospital benefits;
(2) Surgical benefits;
(3) Medical benefits, including:
(A) Primary care;
(B) Preventive care;
(C) Acute episodic care; and
(D) Chronic disease care;
(4) Diagnostic laboratory services, x-ray films, and radio-therapeutic services, necessary for diagnosis or treatment of injuries or diseases;
(5) Prenatal, maternal, and neonatal care;
(6) Substance abuse benefits;
(7) Psychiatric and mental health benefits;
(8) Emergency services, including ambulance coverage;
(9) Durable medical equipment and prostheses;
(10) Dental benefits, including:
(A) Prophylactic dental care, including no less than two cleaning visits and two dental examinations per year;
(B) Filling of cavities, provision of root canals, and tooth extractions, as necessary; and
(C) Dental x-rays;
(11) Vision benefits, including:
(A) No less than on examination per year;
(B) Screening for glaucoma and macular disease;
(C) Provision of a basic pair of corrective glasses at least once every two years; and
(D) Any medically necessary surgeries to address ocular diseases;
(12) Hearing benefits, including:
(A) An examination no less than once per year; and
(B) Hearing aids, if necessary;
(13) Physical therapy;
(14) Pharmacy benefits, including prescription drug coverage;
(15) Standard diagnostic screenings, including mammography, colonoscopy, blood glucose, blood cholesterol, bone density, and hearing testing; and
(16) Vaccines recommended by the Centers for Disease Control and Prevention.
(b) The authority shall issue each resident of the State an electronic insurance card, which shall serve as proof that the cardholder is covered by malama care.
(c) Pharmacy benefits shall be provided in accordance with a comprehensive formulary to be determined by the authority; provide that prescription drug coverage shall be consistent with pharmacy best practices for standards and procedures and cost controls.
(d) Except as otherwise provided, the benefits required by this chapter shall be provided without cost sharing to persons covered by malama care, including benefits provided by out-of-state health care providers to residents who are temporarily out of State.
(e) Nothing in this chapter shall be construed to require malama care to cover any benefit in excess of those required by this section that is not deemed medically necessary.
§ -5 Network adequacy. The authority shall maintain a robust and adequate network of health care providers located in the State or regularly serving residents.
§ -6 Hospitals; budgets; payments; operations. (a) Each hospital operating in the State shall be funded by a global budget, to be determined for each hospital by the authority and to be based on the cost of operations for services provided by each individual hospital. Hospital operating budgets shall not be based on fee-for-service billings and collections or payment through capitation.
(b) Any funds from a hospital's operating budget that are unexpended or unencumbered by July 30 of each year shall be applied to the hospital's budget for the following fiscal year.
(c) Each hospital may elect to include an associated group practice, including physicians and other licensed health care providers, under the hospital's global operating budget; provided that:
(1) The hospital's global operating budget shall be expanded to include the cost of salaries for the health care providers and support staff who are part of the group practice;
(2) The group practice shall not have defined members or a separate risk pool; and
(3) The services of members of the group practice shall be available to all persons enrolled in malama care.
(d) Nothing in this section shall be construed to prohibit a hospital from accepting a patient with supplemental health insurance; provided that the hospital shall not bill a patient with supplemental health insurance for any services covered under malama care.
§ -7 Payments to health care providers and health care facilities; fee-for-service. (a) Health care providers and health care facilities operating independently of a hospital shall be paid on a fee-for-service basis.
(b) The authority shall establish a standardized schedule for fee-for-service payments based on the professional training and time required for each covered service. The schedule authority shall negotiate the fee-for-service schedule with organized groups representing health care providers on an annual basis. The fee-for-service payment schedule shall not be based on capitation.
(c) The authority shall make available the necessary information, forms, access to eligibility on enrollment systems, and billing procedures to health care professionals operating in the State to ensure immediate enrollment for individuals enrolled in malama care at the point of service or treatment.
(d) Nothing in this section shall be construed to prohibit a health care provider or health care facility from accepting a patient with supplemental health insurance; provided that the health care provider or health care facility shall not bill a patient with supplemental health insurance for any services covered under malama care.
§ -8 Supplemental health insurance. Nothing in this chapter shall be
construed to prohibit a resident from maintaining supplemental health
insurance; provided that the resident shall be responsible for any premiums,
copayments, deductibles, or coinsurance requirements under a supplemental health
insurance's policy, contract, plan, or agreement.
§ -9 Office of the patient advocate; established. There is established an office of the patient advocate, which shall operate independently of the authority and which shall serve to investigate complaints of adverse decisions by the authority or any hospital, health care provider, or health care facility participating in malama care.
§ -10 Community-based programs. (a) The authority shall establish global operating budgets for community-based programs, which shall be based on operating costs, including cost of salaries and overhead.
(b) Community-based programs shall serve residents with complex or highly specialized care needs and shall include, at a minimum:
(1) Treatment programs for mental health and substance abuse;
(2) Home care; and
(3) Collaborative support for patients requiring specialized care within primary care practices.
§ -11 Rulemaking. The authority shall adopt rules pursuant to chapter 91 necessary for this chapter, including but not limited to:
(1) Rules for the payment of cost sharing by residents; provided that the cost sharing requirement shall be no more than $30; and
(2) Rules for the provision of care for residents in the State receiving health care coverage from federal and state medicare or medicaid programs.
§ -12 Reporting. The authority shall provide an annual report to the legislature no later than twenty days prior to the convening of each regular session, which shall include a summary of its activities during the preceding year, including:
(1) Actions taken to address issues, unmet needs, and challenges relating to the provision of health care services to residents of the State;
(2) Funds received pursuant to the activities of the authority from federal, state, private, and philanthropic sources; and
(3) Any other findings and recommendations, including any proposed legislation."
PART IV
SECTION 5. The governor shall, no later than December 31, 2025, appoint members to the Hawaii health authority pursuant to section 332H-1, Hawaii Revised Statutes, with advice and consent of the senate as soon as practical thereafter.
SECTION 6. (a) The department of human services shall apply to the United States Department of Health and Human Services for any amendment to the state medicaid plan or for any medicaid waiver necessary to implement part III of this Act. The department shall submit the medicaid state plan amendment no later than .
(b) The State shall submit a state innovation waiver proposal to the United States Secretaries of Health and Human Services and the Treasury to waive certain provisions of the federal Patient Protection and Affordable Care Act of 2010, Public Law No. 111-148, as amended, as provided under section 1332 of the federal act, and upon approval by the Secretaries to implement the waiver on .
SECTION 7. There is appropriated out of the general revenues of the State of Hawaii the sum of $350,000 or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for the general administration of the Hawaii health authority, including the hiring of any staff.
The sums appropriated shall be expended by the Hawaii health authority for the purposes of this Act.
SECTION 8. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 9. This Act shall take effect on July 1, 2025; provided that part III shall take effect one hundred eighty days after the approval of the Hawaii medicaid state plan by the Centers for Medicare and Medicaid Services.
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INTRODUCED BY: |
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Report Title:
Malama Care; Universal Health Care; Hawaii Health Authority; Single Payer Health Care System; Medicare; Medicaid; Prepaid Health Care Act
Description:
Requires the Hawaii Health Authority to develop a comprehensive plan for the establishment of a universal, single payer health care system to replace all other health care coverage in the State, including Medicare, Medicaid, and the Prepaid Health Care Act. Establishes a universal, single payer health care system to be known as the Malama Care program under the Hawaii Health Authority to take effect one hundred eighty days after the approval of waivers from certain provisions of the Patient Protection and Affordable Care Act of 2010 and the State's Medicaid plan. Appropriates funds.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
