STAND. COM. REP. NO. 1288

Honolulu, Hawaii

, 2023

RE: S.B. No. 64

S.D. 1

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Health & Homelessness, to which was referred S.B. No. 64, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO MEDICARE SUPPLEMENT INSURANCE,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Require issuers of Medicare Supplement Insurance to accept an eligible individual's application for coverage at any time throughout the year; and

(2) Prohibit issuers of Medicare Supplement Insurance from denying or conditioning the issuance or effectiveness of a policy or certificate or making any premium rate distinctions due to health status, claims experience, receipt of health care, or medical condition.

Your Committee received testimony in support of this measure from the Leukemia & Lymphoma Society, Hawaii Medical Association, Kūpuna Caucus of the Democratic Party of Hawai‘i, and two individuals. Your Committee received testimony in opposition to this measure from the Department of Commerce and Consumer Affairs and Hawaii Association of Health Plans. Your Committee received comments on this measure from the Hawaii Medical Service Association.

Your Committee finds that eligible individuals are able to purchase Medicare Supplement Insurance, also known as Medigap, on a guaranteed-issue basis only during the six-month open enrollment period that begins when an individual is enrolled for benefits under Medicare Part B. Your Committee further finds that it is extremely difficult for individuals whose health conditions or financial situations may have changed after their open enrollment period to switch to a more suitable Medigap plan. Your Committee recognizes that permitting individuals to change insurance plans multiple times during a twelve-month period may encourage forum shopping and lead to increased prices for consumers.

Accordingly, your Committee has amended this measure by:

(1) Requiring the Insurance Commissioner to adopt rules to establish an annual open enrollment period for beneficiaries who have been enrolled in a Medigap policy for a minimum of twelve months;

(2) Requiring issuers of Medicare Supplement Insurance to accept an eligible individual's application for coverage during the annual open enrollment period;

(3) Deleting language requiring issuers of Medicare Supplement Insurance to accept an eligible individual's application for coverage at any time throughout the year;

(4) Deleting the severability clause;

(5) Changing the effective date to December 31, 3000, to encourage further discussion; and

(6) Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Health & Homelessness that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 64, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 64, S.D. 1, H.D. 1, and be referred to your Committee on Consumer Protection & Commerce.

Respectfully submitted on behalf of the members of the Committee on Health & Homelessness,

____________________________

DELLA AU BELATTI, Chair