SECTION 1. The legislature finds that due to federal welfare reform in 1996, certain noncitizens, though lawfully present in the United States, were made ineligible for medicaid. This ineligibility standard covers Hawaii residents who are present in the State under the respective Compacts of Free Association (COFA) that the United States has with the Federated States of Micronesia, Republic of the Marshall Islands, and Republic of Palau.

The legislature further finds that one of the principles of the Affordable Care Act is to increase access to affordable health care. Lack of access to affordable health care has many negative effects on both the uncovered individual and society at large, including overuse of emergency rooms, untreated illnesses, risk of public health epidemics, and unpaid medical bills. While it is preferable that the United States government take action to include COFA and other noncitizens who lawfully reside in the United States as qualified aliens under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, in recognition of their unique historic and ongoing sacrifices and contributions to the United States, or, alternatively, fully reimburse the State for its medicaid costs for this population, this measure seeks to further the Affordable Care Act's goal of increased health care access.

In November 2014, the department of human services announced that effective March 1, 2015, coverage under Med-QUEST, the State's medicaid program, will terminate for certain adult noncitizen residents who are not pregnant, aged, blind, or disabled. The legislature finds that the department of human services has already stopped accepting new Med-QUEST applications from this group, and is requiring that they enroll in a health plan through the Hawaii health insurance exchange, known as the Hawaii health connector, in order to obtain medicaid-like health insurance. This switch from the state plan to plans through the Hawaii health connector means that the federal government, and not the State, will primarily cover the costs of health insurance, saving the State an estimated $27,000,000 a year.

However, noncitizen residents enrolled through the Hawaii health connector who have an income of less than one hundred per cent of the federal poverty level will be evaluated as if their income is at one hundred per cent for purposes of calculating any tax credits and cost-share reduction. This valuation is in contradiction to how medicaid-eligible citizens would be evaluated. Other costs, such as deductibles and co-pays, may be assessed against noncitizen residents that they would not be required to pay if they were medicaid-eligible.

The department of human services has announced that it intends to offer assistance for health insurance premiums to certain noncitizens who enroll in certain plans through the Hawaii health connector. There are other costs, such as co-pays and deductibles, that may be assessed against this group and will not be addressed by the premium assistance. Supplementing the department's premium assistance plan with additional funds to cover any premium, co-pay, or deductible that is not met will still allow the department to realize significant cost-savings.

The department of human services estimates that there are approximately seven thousand five hundred non-pregnant, non-aged, non-blind, and non-disabled adult COFA noncitizen residents who currently receive medicaid-like coverage and will need to be transferred to a plan through the Hawaii health connector and approximately one thousand other non-pregnant, non-aged, non-blind, and non-disabled adults lawfully present noncitizen residents ineligible for medicaid.

The purpose of this Act is to direct the department of human services to support low-income COFA residents and other legal permanent residents, who have lived in the United States less than five years, with maintaining or obtaining health insurance at no cost beyond what is required of the State's medicaid recipients and to correspondingly appropriate funds for fiscal years 2015-2016 and 2016-2017.

SECTION 2. For any COFA residents who would otherwise be eligible for medicaid except for citizenship status and any lawfully present legal permanent residents admitted to the United States for less than five years who are age nineteen years and older and who would otherwise be eligible for medicaid except for citizenship status, the department of human services shall pay any health insurance costs assessed against the resident that the resident would not be required to pay if the resident was eligible to enroll in medicaid; provided that the resident is transferred to or enrolls in a health care plan through the Hawaii health insurance exchange. The costs shall be paid by the department of human services directly to the health insurance provider and shall include:

(1) The individual's share of the premium of the health insurance plan that is not covered by a federal subsidy; and

(2) Any co-pays and deductibles up to the maximum out-of-pocket costs of at least one of the silver II plans.

SECTION 3. The department of human services shall engage in, or contract with a qualified service provider to engage in, community outreach to the noncitizen resident communities and provide assistance with transfer and enrollment of noncitizen residents in health insurance plans through the Hawaii health insurance exchange.

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $8,000,000 or so much thereof as may be necessary for fiscal year 2015-2016 and the same sum or so much thereof as may be necessary for fiscal year 2016-2017 to the department of human services to pay health insurance costs required under this Act.

The sums appropriated shall be expended by the department of human services for the purposes of this Act.

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $500,000 or so much thereof as may be necessary for fiscal year 2015-2016 and the same sum or so much thereof as may be necessary for fiscal year 2016-2017 to the department of human services for community outreach efforts required under this Act.

The sums appropriated shall be expended by the department of human services for the purposes of this Act.

SECTION 6. This Act shall take effect on July 1, 2015.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	1327
TWENTY-EIGHTH LEGISLATURE, 2015
STATE OF HAWAII