THE SENATE	S.B. NO.	3239
THIRTY-SECOND LEGISLATURE, 2024		S.D. 2
STATE OF HAWAII		H.D. 1

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

The purpose of this Act is to require the office of wellness and resilience convene a working group to study the feasibility of developing, implementing, and executing a program for the State to acquire and forgive outstanding medical debt of Hawaii residents.

SECTION 2. (a) There is established a medical debt forgiveness working group within office of wellness and resilience to study the feasibility of developing, implementing, and executing a program for the State to acquire and forgive outstanding medical debt of Hawaii residents.

(b) The office of wellness and resilience shall invite relevant stakeholders to participate in the working group, including but not limited to:

(1) Representatives from insurance companies operating in the State;

(2) Representatives from public and private hospitals operating in the State; and

(3) Any other person deemed necessary by the office of wellness and resilience.

(c) The working group shall consider:

(1) Program eligibility requirements; and

(2) Best practices to 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, preventive measures, or similar assistance.

(d) The office of wellness and resilience shall submit a report of the working group's findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2025.

(e) The working group shall cease to exist on June 30, 2025.

SECTION 3. This Act shall take effect on July 1, 3000.

Report Title:

Office of Wellness and Resilience; Medical Debt Forgiveness; Working Group; Report to Legislature

Description:

Requires the Office of Wellness and Resilience to establish a Medical Debt Forgiveness Working Group to study the feasibility of developing, implementing, and executing a program for the State to acquire and forgive outstanding medical debt of Hawaii residents. Requires a report to the Legislature. Effective 7/1/3000. (HD1)

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