Hawaii's Obamacare Exchange Is Most Costly in Nation

Thursday, 15 May 2014 01:46 PM

By Malia Zimmerman, Watchdog.org

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Hawaii's Obamacare exchange, the Hawaii Health Connector, costs the nation's taxpayers the most per enrollee, according to a new study by Kaiser Health.

Hawaii's exchange, which has just more than 8,500 people registered, has a tab of about $23,899 per person.

Former U.S. Rep. Charles Djou, D-Hawaii, noted Hawaii's enrollment cost is 26 times the national average, times the cost for the second most expensive state, North Dakota, and considerably more than the national average of $922 dollars per Obamacare enrollee.

"Government must work to better the lives of our citizens, but Obamacare clearly fails this promised standard. Obamacare's punitive costs and punishing demands hurt, not help, working people," said Djou, the only candidate running for Hawaii's 1st Congressional District calling for a complete overhaul of Obamacare.

According to the study, just 8,500 Hawaii residents signed up for the Hawaii Health Connector, while 150,000 people are needed to make the program self-sustainable.

Hawaii received $204 million from the federal government to set up the exchange and build and maintain its website.

The Obamacare exchange will likely cost Hawaii taxpayers another $15 million a year, according to estimates from state lawmakers.

Djou has joined U.S. Rep. Colleen Hanabusa, D-Hawaii; state Senate President Donna Mercado Kim, D-Moanalua; and state Senate Minority Leader Sam Slom, R-Hawaii, in calling for an exemption to the federal requirement since Hawaii already has had the Prepaid Healthcare Act in place since 1974.

Hawaii's Prepaid Health Care Act requires business owners to pay for their employees' health insurance coverage if the employee works 20 hours a week or more.

"Hawaii should be exempt from Obamacare. We should enact sensible medical malpractice tort reform, permit the interstate sale of health insurance and expand the use of health savings accounts," Djou said.

These state and federal lawmakers aren't alone in calling for a change to the current marketplace.

Michael Gold, president and CEO of Hawaii Medical Services Association, told the Associated Press last week the state shouldn't spend more money on Hawaii Health Connector because it's financially unsustainable and doesn't work. He also believes Hawaii should ask the federal government for an exception to the part of the Affordable Care Act that requires states to set up and run their own insurance exchanges, calling Hawaii Health Connector a "costly mistake."

Gold's comments created a huge buzz among state House lawmakers last week when he called for the local exchange to be shut down because HMSA and Kaiser were the two medical insurance providers that helped spearhead Obamacare in Hawaii and are still providing insurance through the exchange.

House Democrats called a press conference Friday to say they were "baffled" by Gold's comments.

"Our legislative session concluded not less than 10 days ago and it is very disappointing to see today's reports from HMSA calling for the shutting down of the Hawaii Health Connector," said Rep. Della Au Belatti, D-Makiki, chair of the House Health Committee.

"During the long and arduous legislative session, state lawmakers were extensively briefed by all stakeholders on the Health Connector, including the governor's department heads, the attorney general, and HMSA on how to restructure, reform and right-size the Connector. It is very disingenuous, disheartening and disappointing to learn that the CEO of HMSA is now calling for the dismantling, shutting down, and federalization of the Health Connector."

Rep. Angus McKelvey, D-West Maui, chairman of the House Committee on Consumer Protection and Commerce, also expressed dismay over Gold's comments.

"First of all, the assertion that these waivers exist and that the Legislature did not pursue them is simply not true," McKelvey said. "On Feb. 4, we wrote to our congressional delegation asking for the very same waiver that Mr. Gold alluded to, and we were told in no uncertain terms that we would not be able to secure them. We also drafted a House resolution asking for a waiver and were told again that we could not.

"Through the legislative process, we learned that the only way we could secure a federal waiver was through the innovation waiver process, which is why we passed House Bill 2581 that will set up a task force to develop a plan to seek the waiver."

House leaders also attacked Gold and HMSA.

"It seems very strange to me that at the same time HMSA is asking for a rate increase of nearly 13 percent; at the same time that the bill removing HMSA from the board is going to the governor for his signature, that HMSA now suddenly questions the need for a health exchange, an exchange that HMSA sits on and has been involved in from day one. It's very problematic, but suggests that we should take a closer look at what's really driving the cost of healthcare here in Hawaii," McKelvey said.

State House and Senate Democrats passed Senate Bill 2470, which established a Legislative Oversight Committee, requiring Hawaii Health Connector to produce an annual sustainability plan and amends procedures and the make-up of the Connector's board of directors. The legislation appropriates $1.5 million for the Connector's operations.

A separate House Bill, 2581, establishes an Innovation Waiver Task Force to develop a plan for applying for a state innovation waiver that meets the requirements of federal law.

Slom, the only person to vote against Hawaii Health Connector being established, asked the U.S. Government Accountability Office to investigate the Connector's spending of the federal grant. He said Hawaii Health Connector has lacked transparency and accountability.


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