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HB2143
HOUSE OF REPRESENTATIVES
H.B. NO.
2143
THIRTY-THIRD LEGISLATURE, 2026
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.
����
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 also finds that it is in the best interest of the State for each
and every resident of the State 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.
����
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;
����
(2)
�
Lack of access to cost-effective
primary care for large segments of the population; and
����
(3)
�
The high cost of prescription drugs.
����
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, before the enactment of the PPACA when
almost all health care providers in the State were paid on a fee-for-service basis.
�
Approximately ten years later, Hawaii per-capita
medicare spending had risen relative to other states, ranking at ninth lowest.
����
T
he
crisis in health care in the United States has also reached Hawaii.
�
Today, thousands of Hawaii residents 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 high
deductibles and out-of-pocket co-payments for outpatient care, diagnostic
services, and prescription drugs, among other factors.
�
Even well-insured individuals experience
problems with their insurers denying, or very reluctantly dispensing, expensive
medication 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, especially on the neighbor islands, are
experiencing increasing difficulty obtaining timely access to doctors.
����
The
legislature therefore concludes that a universal, publicly administered, health
care-for-all insurance model with a single payment agency for caregivers and health
care providers, adapted to meet the unique conditions in Hawaii, would benefit
all sectors in the State.
�
A single payer
system would remove health care from labor negotiations; reduce overall costs
and generate savings for patients; streamline administrative processes for
health care providers; reduce overhead expenses for businesses; create a
single, centralized health information database to support more informed
decision‑making regarding health crises in the State; promote equitable
allocation of public health resources and enable needs-based expansion of
health care facilities; reduce billing and collection costs for hospitals and
independent health care providers; and eliminate profit-based decision‑making
in the provision of health care services.
����
Accordingly,
the legislature concludes that the State should take substantial steps toward
the establishment of universal health care for its residents and to encourage, to
the greatest extent practical, the reduction of administrative complexity in
the compensation of the State's hospitals and other institutional providers of health
care, and of physicians and other health care workers.
�
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 plans in the State upon the receipt of necessary federal waivers,
including waivers related to medicare, medicaid, and the prepaid health care
act.
����
The purpose of this Act is to initiate
the implementation of Hawaii care by:
����
(1)
�
Establishing Hawaii care in statute;
����
(2)
�
Designating
the Hawaii health authority as the
responsible agency for the comprehensive planning, implementation, and
administration of Hawaii care; and
����
(3)
�
Requiring the Hawaii health authority to
develop and submit a comprehensive plan for the implementation and
administration of Hawaii care by
.
PART II
����
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; COMPREHENSIVE PLAN
����
�322H-A
�
Definitions.
�
As used in this
part:
����
"Authority" means the Hawaii
health authority established pursuant to section 322H-1.
����
"Hawaii care" means the
universal, single payer health care system established under chapter
.
����
"Resident" means an individual
who is or intends to be domiciled in the State.
����
�322H-B
�
Hawaii care; comprehensive plan.
�
(a)
�
The authority shall develop a comprehensive
plan for the implementation and administration of Hawaii care.
�
The comprehensive plan shall include:
����
(1)
�
Eligibility
criteria for Hawaii care;
����
(2)
�
Sequencing
and financing requirements for Hawaii care;
����
(3)
�
Cost
of providing a benefits package to all state residents, including all mandatory
health care benefits set forth in section -4;
����
(4)
�
Recommendation
as to whether a benefits package established pursuant to paragraph (3) should
include rehabilitation services and long-term care provided in a skilled
nursing facility;
����
(5)
�
Projected
health care outcomes and cost effectiveness of Hawaii care;
����
(6)
�
Budget
for Hawaii care;
����
(7)
�
Budget
for all hospitals operating under Hawaii care in the State;
����
(8)
�
Fiscal projections of revenues and expenses
over a five-year period for Hawaii care, with an actuarial value of ninety-five
per cent when fully implemented; and
����
(9)
�
Funding mechanisms for Hawaii care, including
any proposed income tax or surcharge.
����
(b)
�
The authority shall submit the comprehensive
plan to the legislature no later than
.
����
�
322H
-C
�
Goals; values.
�
The authority
shall ensure that any plan established pursuant to this part 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
����
(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.
����
�322H-D
�
Research.
�
The authority shall
conduct research on the following to prepare for adoption of Hawaii care:
����
(1)
�
The
causes, consequences, and means to mitigate health care provider burn-out in
the State;
����
(2)
�
Current
compensation practices adopted by health insurers, mutual benefit societies,
and health maintenance organizations operating in the State; and
����
(3)
�
Any
other current financial practices relating to health care."
����
SECTION
3
.
�
Chapter 322H, Hawaii Revised Statutes, is
amended by designating sections 322H-1 to 322H-2, as part I and inserting a
title before section 322H-1, to read as follows:
"
PART I.
�
GENERAL PROVISIONS
"
����
SECTION
4.
�
Chapter 322H, Hawaii Revised
Statutes, is amended by adding a new section to part I to be appropriately
designated and to read as follows:
����
"
�322H-
�
Reports.
�
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)
�
Summary of the authority's activities during
the preceding year;
����
(2)
�
Actions taken to address issues, unmet needs,
and challenges relating to the provision of health care services to residents
of the State;
����
(3)
�
Any findings and recommendations based on
research conducted pursuant to section 322H-D; and
����
(4)
�
Any other findings, and recommendations, including
proposed legislation."
����
SECTION
5
.
�
Section 322H-2, Hawaii
Revised Statutes, is amended to read as follows:
����
"
�322H-2
�
Hawaii health authority; duties and responsibilities.
�
(a)
�
The authority shall be
responsible for overall health planning for the State and [
shall be
responsible for
] determining future capacity needs for health providers,
facilities, equipment, and support services providers[
.
]
in the
State.
����
(b)
�
The authority shall [
d
evelop
a comprehensive health plan
that includes:
����
(1)
�
Establishment of eligibility
for inclusion in a health plan for all individuals;
����
(2)
�
Determination of all
reimbursable services to be paid by the authority;
����
(3)
�
Determination of all approved
providers of services in a health plan for all individuals;
����
(4)
�
Evaluation of health care and
cost effectiveness of all aspects of a health plan for all individuals; and
����
(5)
�
Establishment of a budget for
a health plan for all individuals in the State.
]
be responsible for the
comprehensive planning, implementation, and administration of Hawaii care,
established pursuant to chapter .
����
(c)
�
The authority shall
determine the waivers that are necessary and available by federal law, rule, or
regulation necessary to implement and maintain this chapter.
����
(d)
�
The authority may establish subcommittees
necessary to carry out its duties and responsibilities.
����
[
(d)
]
(e)
�
The authority shall adopt
rules pursuant to chapter 91 necessary for the purposes of this chapter.
����
[
(e)
�
The authority shall
submit a comprehensive health plan for all individuals in the State, including
its findings and recommendations, to the legislature no later than twenty days
prior to the convening of the regular session of 2012.
]"
PART III
����
SECTION 6.
�
The Hawaii Revised Statutes is amended by adding a new chapter to be
appropriately designated and to read as follows:
"
Chapter
Hawaii
care
����
� -
1
�
Definitions.
�
As used in this
chapter:
����
"Authority" means the Hawaii
health authority established pursuant to section 322H-1.
����
"Cost sharing" means copayment,
coinsurance, or deductible provisions applicable to coverage for medications
and treatment.
����
"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.
����
"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.
����
"Hospital" means a facility
licensed under section 321‑14.5.
����
"Resident" means an individual
who is or intends to be permanently domiciled in the State.
����
"Supplemental health insurance"
means insurance provided by a health insurer regulated under article 10A of
chapter 431; a mutual benefit society regulated under article 1 of chapter 432;
a health maintenance organization regulated under chapter 432D; or provided through
the TRICARE program.
����
� -2
�
Hawaii care; established; administration;
solicitation of bids.
�
(a)
�
There is established a universal, single
payer health care system, to be known and cited to as Hawaii care and to be
administered by the Hawaii health authority.
�
The purpose of Hawaii care is to provide comprehensive health care
benefits to all residents of the State, and replace all existing health care
plans in the State.
����
(b)
�
The authority may, subject to the requirements of chapters 103D and
103F, as applicable, solicit bids from and award contracts to public or private
entities for the administration of Hawaii care, including but not limited to:
����
(1)
�
Claims
administration;
����
(2)
�
Quality
assurance;
����
(3)
�
Credentialing;
����
(4)
�
Provider
relations; and
����
(5)
�
Customer
service.
����
(c)
�
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.
����
(d)
�
The authority may establish performance measures and provide incentives
for contractors to provide timely, accurate, and transparent services to
enrollees and health care providers.
����
� -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)
�
The following shall be deposited into the special fund:
����
(1)
�
Appropriations
by the legislature;
����
(2)
�
Gifts,
donations, and grants from any private individuals or organizations; and
����
(3)
�
Federal
funds granted for the purpose of this chapter.
����
(c)
�
The Hawaii care special fund shall be used solely for expenses incurred
in the operations of Hawaii care, including but not limited to:
����
(1)
�
Salaries
and overhead;
����
(2)
�
Payments
to third party contractors contracted to administer portions of Hawaii care;
����
(3)
�
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
����
(4)
�
Capital
improvement projects.
����
(d)
�
The authority shall establish a subaccount within the Hawaii care
special fund for community-based specialized services for patients with complex
or highly specialized care needs.
�
The
authority may establish additional subaccounts within the fund as necessary.
����
(e)
�
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 general fund.
����
(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.
����
� -4
�
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:
����
(1)
�
Hospital
benefits;
����
(2)
�
Surgical benefits;
����
(3
)
�
Medical benefits, including:
���������
(A)
�
Primary
care;
���������
(B)
�
Preventive
care;
���������
(C)
�
Acute
episodic care; and
���������
(D)
�
Chronic
disease care;
����
(4)
�
Diagnostic laboratory services, x-ray
films, and radio-therapeutic services, necessary for diagnosis or treatment of
injuries or diseases;
����
(5)
�
Prenatal, maternal, and neonatal care;
����
(6)
�
Substance abuse benefits;
����
(7)
�
Psychiatric
and mental health benefits;
����
(8)
�
Emergency
services, including ambulance coverage;
����
(9)
�
Durable
medical equipment and prostheses;
���
(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 medically necessary;
and
���������
(C)
�
Dental
x-rays;
���
(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;
���
(12)
�
Hearing
benefits, including:
���������
(A)
�
An
examination no less than once per year; and
���������
(B)
�
Hearing
aids, if medically necessary;
���
(13)
�
Physical
therapy;
���
(14)
�
Pharmacy
benefits, including prescription drug coverage;
���
(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, that 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; provided 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.
����
� -5
�
Network adequacy.
�
The authority shall maintain a robust and
adequate network of health care providers located in the State or regularly
serving residents.
����
� -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 authority
shall negotiate the fee-for-service schedule with organized groups representing
health care providers on an annual basis.
�
The fee‑for-service 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, that shall operate independently of the authority and that 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, that 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
�
Rules.
�
The authority shall adopt rules pursuant to chapter 91 necessary to
carry out the purposes of this chapter, including but not limited to rules for:
����
(1)
�
Payment
of cost sharing by residents; provided that the cost sharing requirement shall
be not more than $30; and
����
(2)
�
Provision
of care for residents in the State receiving health care coverage from federal
and state medicare or medicaid programs.
����
� -12
�
Annual Report.
�
The authority shall submit an annual
report to the legislature no later than twenty days prior to the convening of
each regular session, including:
����
(1)
�
Status
of the implementation and operation of Hawaii care; and
����
(2)
�
Any
findings and recommendations, including any proposed legislation that the
authority deems relevant for the implementation and effective operation of
Hawaii care, including the repeal of the Hawaii Prepaid Health Care Act and the
Hawaii Health Systems Corporation.
PART IV
����
SECTION 7.
�
The governor shall, no later than December 31, 2026, 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 8.
�
(a)
�
No later than
, the department of
human services shall apply to the centers for Medicare and Medicaid Services for
any amendment to the state medicaid plan or for any medicaid waiver necessary
to implement part III of this Act.
�
����
(b)
�
The State shall submit a state innovation waiver proposal to the
United States Secretaries of
Health and Human Services
and United States Secretaries of 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 9.
�
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
2026-2027 for the general administration of the Hawaii health authority,
including the hiring of any staff necessary for the purposes of this Act.
����
The sum
appropriated shall be expended by the department of budget and finance for
the purposes of this Act.
����
SECTION 10.
�
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 11.
�
Statutory material to be repealed is bracketed and stricken.
�
New statutory material is underscored.
����
SECTION 12.
�
This Act shall take effect on July 1, 2026; provided that part III shall
take effect one hundred eighty days after the later of the approval of the
Hawaii medicaid state plan and applicable waivers by the Centers for Medicare
and Medicaid Services or the implementation date of the state innovation waiver
approved by the United States Secretary of Health and Human Services and United
State Secretary of the Treasury.
INTRODUCED BY:
_____________________________
Report Title:
Hawaii
Health Authority; Hawaii Care; Universal Health Care; Single Payer Health Care
System; Hawaii Care Special Fund; Rules; Reports; Governor; Department of Human
Services; Medicare; Medicaid; Appropriation
Description:
Establishes
a universal, single payer health care system to be known as "Hawaii
Care", to provide comprehensive health care benefits to all state
residents and eventually replace all existing health care plans in the State.
�
Designates the Hawaii Health Authority as the
responsible agency for the comprehensive planning, implementation, and
administration of Hawaii Care.
�
Requires
the Hawaii Health Authority to develop and submit a comprehensive
implementation and administration plan to the legislature by a certain
date.
�
Establishes the Hawaii Care
special fund.
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Requires the Hawaii Health
Authority to adopt rules and submit reports to the Legislature.
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Requires the Governor to appoint members to
the Hawaii Health Authority by 12/31/2026.
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Requires the Department of Human Services to apply for necessary federal
waivers.
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Takes effect 180 days after the
approval of the Hawaii Medicaid State Plan and necessary federal waivers.
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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.