Health 'pricing' bills pass House
By Kevin Dayton
Advertiser Capitol Bureau Chief
Bills that would give the state new power to regulate health insurance rates and would offer prescription drug discounts for people not covered by drug plans won preliminary approval in the state House yesterday.
House Republicans objected to both bills, warning that the state would have to create a new bureaucracy to run the prescription drug program, and would pile burdensome new regulatory requirements on health insurers with rate regulation.
House Consumer Protection & Commerce Chairman Ken Hiraki said the bills are part of a "fair pricing" package that seeks to lower gasoline, drug and health insurance costs for consumers.
When a market is dominated by just a handful of carriers, "then it becomes incumbent upon the Legislature to act as a watchdog to ensure there is some oversight to make sure that one company doesn't unreasonably dictate prices, terms and conditions of essential goods and services," he said.
The bill to regulate health insurance rates would require Hawaii Medical Service Association and Kaiser Permanente to disclose to the state insurance commissioner exactly how they calculate the premiums they charge employers and consumers.
The insurance commissioner would then have authority to reject those rates if they were deemed excessively high or discriminatory, said Hiraki, D-25th (Downtown, Ala Moana).
House Minority Floor Leader Charles Djou argued the bill "is going in the wrong direction." He said Idaho and Washington imposed similar regulations recently and saw insurance costs increase as carriers left those markets.
"Regulation has brought so many problems to our state with the provision of health care, I don't think more regulation is the answer," said Djou, R-47th (Kahalu'u, Kane'ohe).
House Bill 1761 HD1, rate regulation, passed with 14 Republicans opposed.
Under a bill that also won preliminary approval over the objections of some Republicans yesterday, the state would form a pool of 228,000 Hawai'i residents without drug coverage and negotiate prescription drug discounts for them.
Rep. Roy Takumi, D-36th (Pearl City, Waipahu), said the new purchasing pool would bargain with 350 drug companies across the county for discounts. If no agreement could be reached with drug manufacturers, the state would review whether the company's products would be approved for other state-sponsored drug purchasing programs.
The state also would be able to publicize the names of drug companies that did not offer discounts, and encourage consumers to seek alternatives.
State Rep. Mark Moses, R-42nd (Kapolei, 'Ewa Village, Village Park), objected that the program amounts to state interference in the marketplace and allows the state to penalize companies that don't want to participate.
The prescription drug bill passed with three Republicans voting against it. Both the prescription drug and health insurance rate regulation bills now go to the state Senate.
Reach Kevin Dayton at kdayton@honoluluadvertiser.com or 525-8070.
