SB2443

SECTION 1. The legislature finds that approximately thirteen per cent of Hawaii's adult population is diabetic. In addition, over forty per cent of Hawaii's adult population has prediabetes with blood glucose levels higher than normal, but not yet high enough to be diagnosed with diabetes. It is estimated that eight thousand people in Hawaii are diagnosed with diabetes every year.

The legislature further finds that every person with type 1 diabetes, and many with type 2 diabetes, relies on daily doses of insulin to survive. In Hawaii, diabetes and prediabetes-related costs are estimated at $1.5 billion each year. Recent reports indicate that insulin prices doubled from 2012 to 2016, and nearly tripled between 2002 and 2013. Over twenty-five per cent of type 1 diabetics have reported underusing insulin, due to the high cost.

Therefore, the legislature finds that it is critical to enact policies to reduce the cost of insulin in Hawaii to ensure that diabetics can afford life-saving and life-sustaining insulin. Accordingly, the purpose of this Act is to:

(1) Beginning January 1, 2021, require health insurers, mutual benefit societies, and health maintenance organizations that provide coverage for prescription insulin drugs to cap the total amount the policyholder, member, or subscriber is required to pay at an amount not to exceed $100 per thirty-day supply;

(2) Require the insurance commissioner to investigate prescription insulin drug pricing and submit a report to the legislature, the governor, and the general public; and

(3) Appropriate funds to the insurance division of the department of commerce and consumer affairs to carry out the purposes of this Act.

SECTION 2. Section 431:10A-121, Hawaii Revised Statutes, is amended to read as follows:

"§431:10A-121 Coverage for diabetes[.]; cost sharing in prescription insulin drugs; limits. (a) Each policy of accident and health or sickness insurance providing coverage for health care, other than an accident-only, specified disease, hospital indemnity, medicare supplement, long-term care, or other limited benefit health insurance policy, that is issued or renewed in this State, shall provide coverage for outpatient diabetes self-management training, education, equipment, and supplies, if:

(1) The equipment, supplies, training, and education are medically necessary; and

(2) The equipment, supplies, training, and education are prescribed by a health care professional authorized to prescribe.

(b) An insurer that provides coverage for prescription insulin drugs pursuant to the terms of a policy issued or renewed in this State after December 31, 2020, shall cap the total amount that a policyholder or individual covered under the policy is required to pay for a covered prescription insulin drug at an amount not to exceed $100 per thirty-day supply of insulin, regardless of the amount of insulin needed to fill the covered person's prescription.

(c) Nothing in this section shall prevent an insurer from reducing a policyholder's cost sharing by an amount greater than the amount specified in subsection (b).

(d) As used in this section, unless the context otherwise requires:

"Practitioner" means an individual licensed by the State or authorized by the laws of the State to prescribe prescription drugs within the scope of the person's practice.

"Prescription insulin drug" means any drug dispensed, distributed, or sold pursuant to a practitioner's order that contains insulin and is used to treat diabetes."

SECTION 3. (a) The insurance commissioner shall investigate pricing of prescription insulin drugs, as defined in section 431:10A-121, made available to Hawaii consumers to ensure adequate consumer protections and pricing of prescription insulin drugs, and whether additional consumer protections are needed.

(b) As part of the investigation, the insurance commissioner shall gather, compile, and analyze information concerning the organizations, business practices, pricing information, data, reports, and other information that the insurance commissioner finds necessary from pharmacy benefit management firms, and companies engaged in the manufacture or sale of prescription insulin drugs. The insurance commissioner shall also consider any publicly available information related to drug pricing.

(d) The insurance commissioner shall submit a report of its findings from the investigation and recommendations, including any proposed legislation, to the legislature, the governor, and the general public no later than twenty days prior to the convening of the regular session of 2022. The report shall include:

(1) A summary of insulin pricing practices and variables that contribute to pricing for health insurers, mutual benefit societies, and health maintenance organizations;

(2) Public policy recommendations to control and prevent overpricing of prescription insulin drugs made available to Hawaii consumers;

(3) Recommendations to prevent deceptive sales practices related to the pricing and sale of prescription insulin drugs; and

(4) Any other information the insurance commissioner finds necessary.

(e) The department of the attorney general shall provide advice and assistance as may be necessary in the conduct of the investigation.

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2020-2021 for the insurance division of the department of commerce and consumer affairs to conduct its investigation and make its report pursuant to section 3 of this Act.

The sum appropriated shall be expended by the department of commerce and consumer affairs for the purposes of this Act.

SECTION 5. The benefit to be provided by mutual benefit societies and health maintenance organizations corresponding to the benefit provided under section 431:10A-121, Hawaii Revised Statutes, in section 2 of this Act, shall take effect for all individual or group hospital or medical service plan contracts, and policies, contracts, plans, or agreements issued in the State after December 31, 2020.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2443
THIRTIETH LEGISLATURE, 2020
STATE OF HAWAII