Hawaii

SUMMARY

Hawaii was relatively active in the 2018 legislative term and introduced legislation pertaining to healthcare price transparency, cost, and competition. While most bills failed to pass, the legislature passed SB 2340, which ensures that certain benefits under the Affordable Care Act are preserved under Hawaii law, including prohibiting health insurance entities from imposing a preexisting condition exclusion and prohibiting health insurance entities from using an individual’s gender to determine premiums or contributions.

In 2017, the state legislature passed HB 552, which established the Affordable Health Insurance Working Group to plan for and mitigate adverse effects of the potential repeal of the federal Affordable Care Act by Congress. Regardless of what happens on the federal level, the bill calls for the preservation of the primary provisions of the individual mandate. The Legislature also passed a bill that establishes a Hawaii Health Savings Account, which allows local employees to open a tax-exempt account funded by employer contributions. The bill was referred to the Governor and has not yet been signed.

Hawaii also continues to use the Hawaii Health Information Exchange, the state’s private sector non-profit designee for the receipt of federal funds to create a statewide health information exchange that will ultimately feed into the nationwide eHealth Exchange technology network.

 

LEGISLATION/REGULATION

Legislative Calendar

Hawaii’s most recent legislative session ran from 1/17/2018 – 5/3/2018.

 

Recent Legislative Developments

Healthcare Transparency

2018 HB 2668 

RELATING TO PRESCRIPTION DRUGS: Requires the Department of Health to compile, analyze, and report certain information on essential prescription drugs marketed in the State for the treatment of diabetes, requires certain entities to provide information that justifies cost increases in drug products. 

Inactive/Dead.
SB 287

DISCLOSURE OF PRIOR AUTHORIZATION STANDARDS AND PROCESSES: Requires all health insurers, including health benefits plans under chapter 87A, HRS, to disclose on, or have accessible through, their public web sites any medical policies used for making preauthorization decisions.

Inactive/Dead.
HB 694

HEALTH:Establishes the Health Analytics Program in the Med-QUEST Division of the Department of Human Services and authorizes DHS to maintain an all-payers medical claims database.

Inactive/Dead.

 

Healthcare Cost

2018 HB 2424 GENERAL EXCISE TAX: Reduces costs by exempting gross receipts from the general excise tax: from the sale of prescription drugs sold pursuant to a doctor’s prescription, diabetic supplies, mobility enhancing equipment, durable medical equipment, prosthetic devices, medical oxygen, and human blood and its derivatives from the general excise tax, amends the definition of prosthetic device to include devices worn on the body, amends the definition of prescription drugs. Inactive/Dead.
SB 2108 HEALTH CARE ASSISTANCE:Requires the Department of Human Services to provide a tiered level of health care premium assistance for individuals depending on their family’s income as compared to the federal poverty level. Inactive/Dead.
SB 3072 PHARMACY BENEFIT MANAGERS: Requires pharmacy benefit managers to notify contracting pharmacies of changes to maximum allowable costs by the National Drug Code fifteen days prior to the change. Requires pharmacy benefit managers to disclose where an equivalent drug can be obtained at or below the maximum allowable cost, when a maximum allowable cost appeal is upheld on appeal. Requires pharmacy benefit managers to: allow contracting pharmacies to reverse and rebill claims if the pharmacy benefit manager establishes a maximum allowable cost that is denied on appeal; and pay the difference to the contracting pharmacies. Inactive/Dead.
HB 2644/SB 3104 PHARMACY BENEFIT MANAGERS: Establishes requirements for pharmacy benefit managers and maximum allowable cost, including the ability of pharmacies to receive comprehensive maximum allowable cost lists and bring complaints, within the purview of the Department of Commerce and Consumer Affairs, clarifies the available penalties for violations of maximum allowable cost requirements.   Inactive/Dead.

 

Healthcare Markets

2018 SB 2340/HB 2126 RELATING TO HEALTH INSURANCE: Ensures certain benefits under the federal Affordable Care Act are preserved under Hawaii law, including: extending dependent coverage for adult children up to 26 years of age; prohibiting health insurance entities from imposing a preexisting condition exclusion; and prohibiting health insurance entities from using an individual’s gender to determine premiums or contributions. Passed – Enrolled to Governor on 5/3/18 
HB 2127 

HEALTH INSURANCE: Requires health insurers, mutual benefit societies, and health maintenance organizations to provide coverage for a comprehensive category of reproductive health services, drugs, devices, products, and procedures, requires the Department of Human Services to establish and administer a program to reimburse the cost of medically appropriate services, drugs, devices, products, and procedures for individuals who can become pregnant and who would be eligible for medical assistance. 

Inactive/Dead.
HB 407

HIGH DEDUCTIBLE HEALTH PLANS: Authorizes the issuance of employer-sponsored high deductible health plans, if certain conditions are met. Requires maintenance of health savings accounts in conjunction with high deductible health plans. Specifies that employers and insurers that buy or sell high deductible health plans remain subject to the Prepaid Health Care Act.

Inactive/Dead.
SB 2891

TELEHEALTH: Requires the Department of Health to conduct a telehealth pilot project and publish an evaluation report on the pilot project outcomes. Exempts the pilot project from the State Procurement Code for a period of twelve months. Clarifies that the period of performance of all procurements made during this temporary exemption does not exceed the term of the pilot project.

Inactive/Dead.
2017 SB 403/HB 552

ESTABLISHES THE AFFORDABLE HEALTH INSURANCE WORKING GROUP: Preserves the ACA’s primary provisions, regardless of what happens on the federal level. Specifically, the bill calls for the preservation of the individual mandate; minimum essential benefit requirements;  dependents allowed on parents’ health plan until age 26; the ban on pre-existing condition exclusions and gender based premiums.

Additionally, the bill establishes the Medicaid Plus program which requires the Department of Human Services to provide insurance coverage to individuals and qualifying families whose income is between 138.5 percent and 250 percent of the federal poverty level in Hawaii. The Medicaid Plus program includes the following essential health care benefits: ambulatory patient services; emergency services; hospitalization benefits; pregnancy, maternity, and newborn care; laboratory services; preventative and wellness services and chronic disease management; and limited prescription drug coverage.

Passed – Signed by Governor on 6/20/17 and became Act 43.
HB 1444/SB 1158

PHARMACY BENEFIT MANAGERS: requires pharmacy benefit managers in Hawaii to register with the Insurance commissioner.

Passed – 6/20/17 and became HRS § 431S-3.
HB 407

ALLOWING EMPLOYER-SPONSORED HIGH DEDUCTIBLE HEALTH PLANS IN CONJUNCTION WITH PRE-PAID COMPLIANT PLANS: Creates a Hawaii Health Savings Account that enables local employees to open a tax-exempt account funded by employer contributions which can be used to pay medical expenses. No income tax is paid on the portion of the employee’s income deposited to an HSA. Employers would be required to pay at least 80% of the deductible amount. Furthermore, preventative care is covered at 100% and is not subject to the deductible.

Inactive/Dead.

 

Key Statutes

We compile state statutes relate to healthcare price and competition, including healthcare transparency, markets, and costs. For a complete listing of all health related statutes visit the State Health Practice Database for Research.

Healthcare Markets

  • HRS §§ 323D-71 through 323D-83 states that prior to obtaining ownership of a hospital, the acquirer must seek and obtain approval from the state regulatory agency, with concurrent review by the state attorney general. In deciding whether to approve or disapprove the transaction, the agency shall consider whether the proposed acquisition is in the public interest; to wit, whether adequate safeguards are in place to ensure continued access to affordable healthcare in the affected community.

 

  • HRS § 323D-43 prohibits health care providers from acquiring, replacing, or adding to their facilities and equipment, except in specified circumstances, without the prior approval of the State Health Planning & Development Agency through the state’s Certificate of Need process. A Certificate of Need regime aims to reduce healthcare overheard by reducing unnecessary or duplicative services, but can be anticompetitive by increasing regulatory barriers for new entrants.

 

  • HRS §§ 431:14G-101 through 431:14G-112 applies rate regulation to all health insurance offered by managed care plans, providing that rates “shall not be excessive, inadequate, or unfairly discriminatory and shall be reasonable in relation to the costs of the benefits provided.” Managed care plans must file proposed rates with the commissioner of insurance for approval. Additionally, no manage care plan may attempt or actually monopolize an insurance market, engage in a boycott of an insurance market, or make an arrangement that has the effect of restraining trade unreasonable or of substantially lessening competition in the business of insurance.

 

  • HRS § 431:13-103 defines prohibited unfair methods of competition and unfair or deceptive acts or practices in the business of insurance.

 

  • HRS § 431S requires each person seeking to register as a pharmacy benefit manager to register with the Insurance Commissioner.

 

  • Act 43 (cite to HRS pending) establishes the Affordable Health Insurance Working Group to address the complexities of the health care system in Hawaii and the related uncertainty over the future of the federal Affordable Care Act.

 

2017-2019 BUDGET

The State budgets on a biennium basis with the Executive biennium budget submitted to the Legislature for action on odd numbered years and the Executive supplemental budget submitted on even numbered years. The State’s fiscal year runs from July 1st to June 30th. Hawaii enacted its 2017-2019 Budget during the regular legislative session. To view Hawaii’s Department of Health 2017-2019 Budget, visit page 14 here.

 

LITIGATION/ENFORCEMENT

  • None identified.

 

KEY RESOURCES

Hawaii State Legislature

Hawaii Office of the Attorney General

Hawaii Health Information Corporation