Throughout this year's legislative session, one of the most heated debates has been over a bill that would give the state Insurance Division increased oversight of health insurers, including regulation of the rates they charge. Insurance resolution
could kill health billA call for an audit of the state Insurance
Division was drafted by insurer HMSABy Lyn Danninger
ldanninger@starbulletin.comThe division introduced the bill and has fought for it; not surprisingly, health insurers are adamantly opposed and have testified strongly against it.
Last week, House Speaker Calvin Say introduced a resolution calling for an audit of the Insurance Division. The resolution, Say acknowledges, was drafted by Hawaii Medical Service Association, the largest critic of the Insurance Division's bill.
Say said he introduced the resolution in response to concerns over the financial impact to the Insurance Division if it loses $6 million in an insurance revolving fund, and not at the request of HMSA.
The Legislature has been looking at transferring unused or unneeded money from a variety of special funds, including the insurance revolving fund, to the state's general fund in order to balance the budget. HB 1761, the Insurance Division's bill, continues to move through the Legislature. Yesterday it passed out of a joint Senate committee hearing. It's next stop is the Senate Ways and Means Committee.
Still, the resolution could de-rail the Insurance Division's attempt to pass its bill. It asks legislators not to give the Insurance Division any further rate regulation authority until an audit has established that it has the operational capacity to handle further responsibilities.
While the resolution can command an audit, it does not have the force of law.
HMSA legislative representative Jennifer Diesman confirmed company repres- entatives met with the speaker, but said they did not specifically ask him to introduced the resolution.
Diesman said HMSA helped with the language in the resolution and supports its intent.
"The Insurance Division hasn't been audited in at least 10 years," Diesman said.
Health plan consultant Paul Tom said the timing of the House resolution is suspect.
"I think there is a concern that this measure may be an attempt to block the passage of rate regulation," he said.
Tom said he is concerned that legislators may put off passage of the bill.
"With this resolution out there, I could see legislators saying we should probably wait to pass this until after the audit is done," he said.
State Insurance Commissioner Wayne Metcalf said he has no problems with an audit of his department if that's what legislators decide.
"We are already subject to a very rigorous national accreditation process and we just received a full five-year re-accreditation this past December," he said.
But he said an audit should not be a pre-condition for the passage of the health rate oversight bill this session.
"An audit is used to measure and critique performance of existing activities, not predict the future," he said.
Moreover, Metcalf notes that each time the Legislature has given the division additional authority to regulate other lines of insurance, such as workers' compensation, auto and homeowners, it has never imposed an audit requirement as a pre-condition to passage of legislation.
"So far the Legislature has shown a lot of confidence in the Insurance Division as evidenced by the continued delegation of responsibilities to the division," he said.
"This is simply an unfortunate example of HMSA trying to bend the Legislature to its own will and purpose which is to defeat any further oversight of its activities."