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

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, that has become a widespread issue across the nation. Further, many Americans have insufficient funds to buffer the shocks of unanticipated medical debt. 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.

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 Americans who find themselves unable to pay, further exacerbating the severity of this medical debt crisis.

The legislature notes that in other parts of the country, nonprofit organizations have successfully purchased millions of dollars in medical debt from hardworking families and abolished their debt altogether. The number of organizations emerging in this secondary mark are growing following a 2020 legal opinion by the Office of Inspector General for the United States Department of Health and Human Services, that provided legal clarity regarding the right for hospitals and similar nonprofits to work together in donating or selling medical debt.

The legislature finds that health care providers that donate or sell medical debt accounts to third parties for abolishment are able to address a social determinant of health and enhance community well-being while receiving revenue for dormant patient accounts.

The purpose of this Act is to require the office of wellness and resilience to design and implement a three-year pilot program in collaboration with health care providers to acquire and forgive outstanding medical debt.

SECTION 2. (a) The office of wellness and resilience shall design and implement a three-year pilot program in collaboration with health care providers to acquire and forgive outstanding medical debt.

(b) The office of wellness and resilience shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2028.

SECTION 3. In accordance with section 9 of article VII, of the Constitution of the State of Hawaii and sections 37-91 and 37-93, Hawaii Revised Statutes, the legislature has determined that the appropriation contained in this Act will cause the state general fund expenditure ceiling for fiscal year 2024-2025 to be exceeded by $          , or       per cent. The reasons for exceeding the general fund expenditure ceiling are that the appropriation made in this Act is necessary to serve the public interest and to meet the need provided for by this Act.

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 2024-2025 for the pilot program established pursuant to this Act.

The sum appropriated shall be expended by the office of wellness and resilience for the purposes of this Act.

SECTION 5. This Act shall take effect on December 31, 2050.

Report Title:

OWR; Health Care; Debt; Pilot Program; Report; Expenditure Ceiling; Appropriation

Description:

Requires the Office of Wellness and Resilience to design and implement a three-year pilot program in collaboration with health care providers to acquire and forgive outstanding medical debt. Requires a report to the Legislature. Declares that the general fund expenditure ceiling is exceeded. Makes an appropriation. Takes effect 12/31/2050. (SD1)

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