RELATING TO HEALTH CARE.

HB1490

HOUSE OF REPRESENTATIVES

H.B. NO.

1490

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to health care
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

PART I

����
SECTION 1.
�
The legislature finds that the delivery of
health care services in the State has approached crisis levels.
�
Many physicians and other health care
providers are leaving Hawaii, and the level of health care services on the
neighbor islands in particular is seriously deficient.

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The legislature further finds that,
even with the 1974 Hawaii Prepaid Health Care Act that mandates employers
provide health insurance for employees working at least nineteen hours per
week, and even with the extensions of medicaid to larger populations in the
State and the increase of commercial health insurance coverage created by the
federal Patient Protection and Affordable Care Act (PPACA), there remain a
substantial number of uninsured or underinsured individuals.
�
Additionally, the linkage of health insurance
to employment status, which many years ago was an employment benefit, has now
become a serious impediment to employee mobility.
�
A substantial number of people feel
financially compelled to remain in unsatisfactory employment situations to
protect their access to health insurance and therefore to health care.

����
The legislature finds that it is in
the best interest of the State for each and every state citizen to have
publicly provided, high quality, affordable health care.
�
Health care is more than just medical
insurance payouts.
�
It includes
cost-saving, preventive, and early intervention measures to prevent medical
conditions from becoming chronic, permanently disabling, or fatal and includes
proven secondary and tertiary prevention strategies and interventions to
maintain the health and quality of life of those who are burdened with serious
chronic diseases.

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The legislature additionally finds
that Hawaii's current health care insurance system is a disjointed, costly,
inefficient, and unnecessarily complicated, multi-payer, private medical
insurance model that is largely profit-driven, adversarial, beset with constant
cost-shifting and reluctant health care delivery, onerously bureaucratic, and
economically irrational.
�
Additionally,
health care costs are skyrocketing, creating an affordability and accessibility
crisis for Hawaii's residents.
�
The three
largest cost-drivers of health care in the United States in general and in
Hawaii in particular are:

����
(1)
�
The administrative
cost of a profit-driven complex of payment-reluctant, multi-payer health
insurance bureaucracies competing to insure the healthy, while leaving those
who need health care the most to the taxpayers, or competing to siphon money
out of the state medicaid budget while beneficiary access to care deteriorates
and costs rise;

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(2)
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Lack of access to
cost-effective primary care for large segments of the population; and

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(3)
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The high cost of
prescription drugs.

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The legislature further finds that
for more than a quarter of a century, Hawaii was far ahead of most other states
and often called itself "the health state" because of the 1974 Hawaii
Prepaid Health Care Act.
�
Hawaii was once
known for having a low uninsured population of between two and five per cent in
1994.
�
Hawaii had the lowest per-capita medicare
spending in the country in 2008-2009, prior to the PPACA when almost all Hawaii
providers of care were paid with fee-for-service.
�
Ten years later Hawaii had climbed to ninth
lowest per-capita medicare spending and rising.

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However, the crisis in health care
in the United States has also befallen Hawaii.
�

Today, thousands of Hawaii citizens lack health care coverage, many of
whom are children.
�
Many other Hawaii
residents are underinsured or unable to use or access their covered benefits
because of increasingly expensive deductibles and out-of-pocket co-payments for
outpatient visits, diagnostic tests, and prescription drugs, among other
factors.
�
Even well-insured individuals
experience problems with their insurers denying, or very reluctantly
dispensing, expensive medicines and treatments.
�

About half of all bankruptcies are due to extremely expensive,
catastrophic illnesses that are not covered after a certain cap is
reached.
�
Other persons are near
bankruptcy with their quality of life seriously impacted.
�
And even with health insurance, Hawaii
residents are experiencing increasing difficulty finding doctors when they need
them on all islands, but especially on the neighbor islands.

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The legislature therefore concludes
that a universal, publicly administered, health care-for-all insurance model
with one payout agency for caregivers and providers, adapted to meet the unique
conditions in Hawaii, would be beneficial across all sectors in the State.
�
A single payer system would remove health
care as a factor in labor negotiations; reduce overall costs and generate
savings for patients; streamline processes for health care providers; reduce
overhead expenses for businesses; create a single, centralized health
information database for all residents in Hawaii, allowing for more informed
decision making regarding health crises in the State; create an equitable
allocation of public health resources and provide for a needs-based expansion
of health care facilities; reduce billing and collections costs for hospitals
and independent health care providers; and eliminate profit-based decision
making in the provision of health care services.

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Accordingly, the legislature
concludes that Hawaii should take substantial steps toward the establishment of
universal health care for the residents of the State and to encourage, as much
as practical, reduction of administrative complexity in the compensation of the
State's hospitals and other institutional providers of care, and of physicians
and other workers in the health care field.
�

This should be accomplished by the creation of a publicly financed
health care program, to be known as "Hawaii care", for all Hawaii
residents and which shall replace all existing health care systems in the State
once the appropriate federal waivers are obtained, including medicare, Medicaid,
and the prepaid health care act.

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The purpose of this Act is to
initiate the implementation of Hawaii care by:

����
(1)
�
Requiring the
Hawaii health authority to develop a universal, single payer health care plan
to be implemented as Hawaii care;

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(2)
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Establishing Hawaii care; and

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(3)
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Appropriating funds.

PART II

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SECTION
2.
�
Chapter 322H, Hawaii Revised
Statutes, is amended by adding a new part to be appropriately designated and to
read as follows:

"
Part .
�
Hawaii care

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�322H-A
�
Definitions.
�
For the purposes of this part:

����
"Hawaii
care" means a universal, single payer health care system to provide
comprehensive health care benefits to all residents of the State.

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"Resident"
means an individual who is or intends to be domiciled in the State.

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�322H-B
�

Hawaii health authority; Hawaii care; duties and responsibilities;
benefits.
�
(a)
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The authority shall be responsible for the
overall planning and implementation of Hawaii care.

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(b)
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The authority shall develop a comprehensive
universal, single payer health plan that includes:

����
(1)
�
Establishment of eligibility for inclusion in
a universal, single payer health care system for all residents of the State;

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(2)
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Determination of the sequencing and financing
requirements for a universal, single payer health care system;

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(3)
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Determination of the cost for providing a
benefits package to all residents of the State that includes all mandatory
health care benefits pursuant to section -4;

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(4)
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Recommendation if a benefits package
established pursuant to paragraph (3) should include rehabilitation services in
a skill nursing facility and long-term care in a skilled nursing facility;

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(5)
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Evaluation of health care and cost
effectiveness of all aspects of a universal, single payer health plan for all
individuals;

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(6)
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Establishment of a budget for a universal,
single payer health plan for all residents of the State; and

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(7)
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Establishment of a budget for all hospitals
operating under Hawaii care in the State.

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(c)
�
The authority shall determine the waivers
that are necessary and available by federal law, rule, or regulation necessary
to implement and maintain this part.

����
(d)
�
The authority shall adopt rules pursuant to
chapter 91 necessary for the purposes of this part.

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(e)
�
The authority may establish any subcommittees
necessary for the purposes of this section.

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�322H-C
�
Business plan.
�
(a)
�

The authority shall develop a comprehensive business plan to govern and
manage the steps necessary to establish Hawaii care.
�
The business plan shall include fiscal
projections of revenues and expenses over a five-year period for a
public-private universal health care system providing benefits as establish
pursuant to section 322H-A with an actuarial value of ninety-five per cent when
fully implemented.
�
The business plan
shall include mechanisms for funding Hawaii care, including any proposed income
tax or surcharge.

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�
322H
-
D
�
Hawaii care; goals; values.
�
The authority shall ensure that any plan
established pursuant to section 322H-B shall be based on the following
principles:

����
(1)
�
Health care, as a fundamental right for all
residents of the State, is to be secured for all individuals on an equitable
basis by public means, similar to public education, public safety, and other
public infrastructure;

����
(2)
�
Access to health care services shall be based
on each individual's need and shall not be restricted based on race, sex,
sexual orientation, gender identity or expression, religion, national origin, citizenship
status, age, pregnancy and related medical conditions, disability, wealth,
income, genetic conditions, primary language use, or previous or existing
medical conditions; and

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(3)
�
The components of the health care system shall
be accountable and fully transparent to the public with regards to information,
decision making, and management to ensure meaningful public participation in
decisions affecting the public's health care.

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�322H-E
�
Research.
�

The authority shall conduct research on the following to prepare for
adoption of a universal, single payer health plan for all individuals in the
State:

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(1)
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The causes, consequences, and means to
mitigate health care provider burn-out in the State;

����
(2)
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Current compensation practices adopted by
health insurers, mutual benefit societies, and health maintenance organizations
operating in the State; and

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(3)
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Any other current financial practices relating
to health care.

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�322H-F
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Reporting requirements.
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Beginning with the regular session of 2026,
the authority shall submit an annual report to the legislature no later than
twenty days prior to the convening of each regular session.
�
The report shall include:

����
(1)
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Progress on the implementation of Hawaii care;

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(2)
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The business plan required by section 322H-C;

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(3)
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Any findings and recommendations based on
research conducted pursuant to section 322H-E; and

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(4)
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Any other findings, recommendations, or
proposed legislation, including proposed legislation for the repeal of the
prepaid health care act and Hawaii health systems corporation, that the
authority deems relevant for the implementation of Hawaii care."

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SECTION
3
.
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Chapter 322H, Hawaii Revised Statutes, is
amended by designating sections 322H-1 and 322H-2 as part I and inserting a
title before section 322H-1 to read as follows:

"
PART
I.
�
GENERAL PROVISIONS
"

PART III

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SECTION 4.
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The Hawaii Revised Statutes is amended by
adding a new chapter to be appropriately designated and to read as follows:

"
Chapter

Hawaii care

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� -
1
�
Definitions.
�
For the purposes of this chapter:

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"Authority"
means the Hawaii health authority established pursuant to chapter 322H.

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"Cost
sharing" means copayment, coinsurance, or deductible provisions applicable
to coverage for medications and treatment.

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"Health
care facility" means an institution providing health care services or a
health care setting, including but not limited to hospitals and other licensed
inpatient centers; ambulatory surgical or treatment centers; skilled nursing
centers; residential treatment centers; diagnostic, laboratory, and imaging
centers; and rehabilitation and other therapeutic health settings.

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"Health
care provider" means an individual licensed, accredited, or certified to
provide or perform specified health care services in the ordinary course of
business or practice of a profession consistent with state law.

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"Hospital"
means a facility licensed under section 321-14.5.

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"Resident"
means an individual who is or intends to be permanently domiciled in the State.

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"Supplemental
health insurance" means insurance provided by a health insurer regulated
under article 10A of chapter 431; mutual benefit society regulated under
article 1 of chapter 432; health maintenance organization regulated under
chapter 432D; or through the TRICARE program.

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� -2
�
Hawaii care; established; administration;
solicitation of bids.
�
(a)
�
There is established a universal, single
payer health care system, to be known as Hawaii care and to be administered by
the Hawaii health authority.

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(b)
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The authority may, subject to the
requirements of chapter 103D, solicit bids from and award contracts to public
or private entities for the administration of Hawaii care including but not
limited to:

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(1)
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Claims administration;

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(2)
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Quality assurance;

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(3)
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Credentialing;

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(4)
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Provider relations; and

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(5)
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Customer service.

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(c)
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The authority shall ensure than any entity
awarded a contract pursuant to this section does not have a financial incentive
to restrict individuals' access to health care.

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(d)
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The authority may establish performance
measures and provide incentives for contractors to provide timely, accurate,
and transparent services to enrollees and health care providers.

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� -3
�
Hawaii care special fund.
�
(a)
�

There is established in the state treasury a Hawaii care special fund,
to be administered and expended by the authority.

����
(b)
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The following shall be deposited into the
special fund:

����
(1)
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Appropriations by the legislature;

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(2)
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Gifts, donations, and grants from any private
individuals or organizations; and

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(3)
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Federal funds granted by Congress or executive
order for the purpose of this chapter.

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(c)
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The Hawaii care special fund shall be used
solely for expenses incurred in the execution of Hawaii care, including but not
limited to:

����
(1)
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Salaries and overhead;

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(2)
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Payments to third party contractors contracted
to administer portions of Hawaii care;

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(3)
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Reimbursements to health care providers,
health care facilities, and hospitals for health care services rendered to
residents of the State that are covered by Hawaii care; and

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(4)
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Capital improvement projects.

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(d)
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The authority shall establish a subaccount
within the Hawaii care special fund for community-based specialized services
for patient with complex or highly specialized care needs.
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The authority may establish additional
subaccounts within the fund as necessary.

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(e)
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All unencumbered and unexpended moneys in
excess of $
remaining on balance in the Hawaii care special fund at the close of June 30 of
each year shall lapse to the credit of the state general fund.

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(f)
�
The authority shall submit a report to the
legislature, no later than twenty days prior to the convening of each regular
session, providing an accounting of the receipts and expenditures of the fund.

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� -4
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Mandatory health care benefits; electronic
insurance card.
�
(a)
�
Without limiting the development of medically
more desirable combinations and the inclusion of new types of benefits, Hawaii
care shall cover at least the following benefits:

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(1)
�
Hospital
benefits;

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(2)
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Surgical benefits;

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(3
)
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Medical benefits,
including:

���������
(A)
�
Primary care;

���������
(B)
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Preventive care;

���������
(C)
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Acute episodic care; and

���������
(D)
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Chronic disease care;

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(4)
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Diagnostic
laboratory services, x-ray films, and radio-therapeutic services, necessary for
diagnosis or treatment of injuries or diseases;

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(5)
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Prenatal,
maternal, and neonatal care;

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(6)
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Substance
abuse benefits;

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(7)
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Psychiatric and mental health benefits;

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(8)
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Emergency services, including ambulance
coverage;

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(9)
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Durable medical equipment and prostheses;

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(10)
�
Dental benefits, including:

���������
(A)
�
Prophylactic dental care, including no less
than two cleaning visits and two dental examinations per year;

���������
(B)
�
Filling of cavities, provision of root canals,
and tooth extractions, as necessary; and

���������
(C)
�
Dental x-rays;

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(11)
�
Vision benefits, including:

���������
(A)
�
No less than on examination per year;

���������
(B)
�
Screening for glaucoma and macular disease;

���������
(C)
�
Provision of a basic pair of corrective
glasses at least once every two years; and

���������
(D)
�
Any medically necessary surgeries to address
ocular diseases;

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(12)
�
Hearing benefits, including:

���������
(A)
�
An examination no less than once per year; and

���������
(B)
�
Hearing aids, if necessary;

���
(13)
�
Physical therapy;

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(14)
�
Pharmacy benefits, including prescription drug
coverage;

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(15)
�
Standard diagnostic screenings, including mammography,
colonoscopy, blood glucose, blood cholesterol, bone density, and hearing
testing; and

���
(16)
�
Vaccines recommended by the Centers for Disease
Control and Prevention.

����
(b)
�
The authority shall issue each resident of
the State an electronic insurance card, which shall serve as proof that the
cardholder is covered by Hawaii care.

����
(c)
�
Pharmacy benefits shall be provided in
accordance with a comprehensive formulary to be determined by the authority;
provide that prescription drug coverage shall be consistent with pharmacy best
practices for standards and procedures and cost controls.

����
(d)
�
Except as otherwise provided, the benefits
required by this chapter shall be provided without cost sharing to persons
covered by Hawaii care, including benefits provided by out-of-state health care
providers to residents who are temporarily out of State.

����
(e)
�
Nothing in this chapter shall be construed to
require Hawaii care to cover any benefit in excess of those required by this
section that is not deemed medically necessary.

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� -5
�
Network adequacy.
�
The authority shall maintain a robust and
adequate network of health care providers located in the State or regularly
serving residents.

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� -6
�
Hospitals; budgets; payments; operations.
�
(a)
�

Each hospital operating in the State shall be funded by a global budget,
to be determined for each hospital by the authority and to be based on the cost
of operations for services provided by each individual hospital.
�
Hospital operating budgets shall not be based
on fee-for-service billings and collections or payment through capitation.

����
(b)
�
Any funds from a hospital's operating budget
that are unexpended or unencumbered by July 30 of each year shall be applied to
the hospital's budget for the following fiscal year.

����
(c)
�
Each hospital may elect to include an
associated group practice, including physicians and other licensed health care
providers, under the hospital's global operating budget; provided that:

����
(1)
�
The hospital's global operating budget shall
be expanded to include the cost of salaries for the health care providers and
support staff who are part of the group practice;

����
(2)
�
The group practice shall not have defined
members or a separate risk pool; and

����
(3)
�
The services of members of the group practice
shall be available to all persons enrolled in Hawaii care.

����
(d)
�
Nothing in this section shall be construed to
prohibit a hospital from accepting a patient with supplemental health
insurance; provided that the hospital shall not bill a patient with
supplemental health insurance for any services covered under Hawaii care.

����
� -7
�
Payments to health care providers and health
care facilities; fee-for-service.
�
(a)
�
Health care providers and health care
facilities operating independently of a hospital shall be paid on a
fee-for-service basis.

����
(b)
�
The authority shall establish a standardized
schedule for fee-for-service payments based on the professional training and
time required for each covered service.
�

The schedule authority shall negotiate the fee-for-service schedule with
organized groups representing health care providers on an annual basis.
�
The fee-for-service payment schedule shall
not be based on capitation.

����
(c)
�
The authority shall make available the
necessary information, forms, access to eligibility on enrollment systems, and
billing procedures to health care professionals operating in the State to
ensure immediate enrollment for individuals enrolled in Hawaii care at the
point of service or treatment.

����
(d)
�
Nothing in this section shall be construed to
prohibit a health care provider or health care facility from accepting a
patient with supplemental health insurance; provided that the health care
provider or health care facility shall not bill a patient with supplemental
health insurance for any services covered under Hawaii care.

����
� -8
�
Supplemental health insurance.
�
Nothing in this chapter shall be
construed to prohibit a resident from maintaining supplemental health
insurance; provided that the resident shall be responsible for any premiums,
copayments, deductibles, or coinsurance requirements under a supplemental health
insurance's policy, contract, plan, or agreement.

����
� -9
�
Office of the patient advocate; established.
�
There is established an office of the patient
advocate, which shall operate independently of the authority and which shall
serve to investigate complaints of adverse decisions by the authority or any
hospital, health care provider, or health care facility participating in Hawaii
care.

����
� -10
�
Community-based programs.
�
(a)
�

The authority shall establish global operating budgets for
community-based programs, which shall be based on operating costs, including
cost of salaries and overhead.

����
(b)
�
Community-based programs shall serve
residents with complex or highly specialized care needs and shall include, at a
minimum:

����
(1)
�
Treatment programs for mental health and
substance abuse;

����
(2)
�
Home care; and

����
(3)
�
Collaborative support for patients requiring
specialized care within primary care practices.

����
� -11
�
Rulemaking.
�

The authority shall adopt rules pursuant to chapter 91 necessary for
this chapter, including but not limited to:

����
(1)
�
Rules for the payment of cost sharing by
residents; provided that the cost sharing requirement shall be no more than $30;
and

����
(2)
�
Rules for the provision of care for residents
in the State receiving health care coverage from federal and state medicare or
medicaid programs.

����
� -12
�
Reporting.
�

The authority shall provide an annual report to the legislature no
later than twenty days prior to the convening of each regular session, which
shall include a summary of its activities during the preceding year, including:

����
(1)
�
Actions taken to address issues, unmet needs,
and challenges relating to the provision of health care services to residents
of the State;

����
(2)
�
Funds received pursuant to the activities of
the authority from federal, state, private, and philanthropic sources; and

����
(3)
�
Any other findings and recommendations,
including any proposed legislation."

PART IV

����
SECTION 5.
�
The governor shall, no later than December
31, 2025, appoint members to the Hawaii health authority pursuant to section
332H-1, Hawaii Revised Statutes, with advice and consent of the senate as soon
as practical thereafter.

����
SECTION 6.
�
(a)
�
The
department of human services shall apply to the United States Department of
Health and Human Services for any amendment to the state medicaid plan or for
any medicaid waiver necessary to implement part III of this Act.
�
The department shall submit the medicaid
state plan amendment no later than .

����
(b)
�
The State shall submit a state innovation
waiver proposal to the United States Secretaries of Health and Human Services
and the Treasury to waive certain provisions of the federal Patient Protection
and Affordable Care Act of 2010, Public Law No. 111-148, as amended, as
provided under section 1332 of the federal act, and upon approval by the
Secretaries to implement the waiver on .

����
SECTION 7.
�
There is appropriated out of the general
revenues of the State of Hawaii the sum of $350,000 or so much thereof as may
be necessary for fiscal year 2025-2026 and the same sum or so much thereof as
may be necessary for fiscal year 2026-2027 for the general administration of
the Hawaii health authority, including the hiring of any staff.

����
The sums

appropriated shall be expended by the
Hawaii health authority for the purposes of this Act.

����
SECTION 8.
�
In codifying the new sections added by
section 2 of this Act, the revisor of statutes shall substitute appropriate
section numbers for the letters used in designating the new sections in this
Act.

����
SECTION 9.
�
This Act shall take effect on July 1, 2025;
provided that part III shall take effect one hundred eighty days after the
approval of the Hawaii medicaid state plan by the Centers for Medicare and
Medicaid Services.

INTRODUCED BY:

_____________________________

Report Title:

Hawaii
Care; Universal Health Care; Hawaii Health Authority; Single Payer Health Care
System; Medicare; Medicaid; Prepaid Health Care Act

Description:

Requires
the Hawaii Health Authority to develop a comprehensive plan for the
establishment of a universal, single payer health care system to replace all
other health care coverage in the State, including Medicare, Medicaid, and the
Prepaid Health Care Act.
�
Establishes a
universal, single payer health care system to be known as the Hawaii Care
program under the Hawaii Health Authority to take effect one hundred eighty
days after the approval of waivers from certain provisions of the Patient
Protection and Affordable Care Act of 2010 and the State's Medicaid plan.
�
Appropriates funds.

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