By Carla Anderson
March 6, 2014
Through Feb. 25, just 4,467 Hawaiians selected a health plan through the health insurance marketplace. Based on an U.S. Health and Human Services report covering the period Oct. 1 to Feb. 1, Hawaii had fewer enrollments than any other state.
Hawaii has a high number of pending applications — about 20,000 — and just 30 percent of applicants qualified for financial assistance compared to 82 percent nationally. The Connector’s eligibility system is not integrated with the state’s Medicaid system. That lack of connection is causing big delays, as the enrollment process used in Hawaii requires that all consumers seeking coverage through the marketplace first be screened for Medicaid eligibility. Those deemed ineligible for Medicaid continue through the enrollment process toward selecting private health insurance.
In addition to low enrollment, Hawaii is confronting financial concerns. Federal funding for state-run marketplaces runs out at the end of 2014. Hawaii Health Connector planned to use a 2 percent fee on premiums to fund its ongoing operations. Given low enrollment, the premium fee isn’t generating enough revenue to meet projected annual expenses of $15 million. While resolving technology and process problems will eventually lead to increased enrollment on Hawaii Health Connector, the revenue shortfall will persist unless the funding mechanism is modified. Hawaii has about 100,000 uninsured residents. About half are expected to qualify for Medicaid — meaning the market for the Connector is about 50,000. Hawaii Health Connector had hoped robust demand from small businesses would increase revenues, but that demand has not materialized. Marketplace officials are looking for alternative funding models as well as ways to cut expenses. In addition, Hawaii Health Connector requested a waiver from the federal government to spend grant money that has been awarded, but not yet used, as bridge funding to get through 2015.
Two insurers, Hawaii Medical Service Association and Kaiser Permanente Hawaii, are offering 95 plans through the marketplace. Enrollment for private insurance in 2014 continues through March 31. Policies purchased by the 15th of the month will be effective the first day of the following month. Individuals who remain uninsured after March may face a tax penalty of $95 or one percent of income, whichever is greater. Enrollment for Medicaid or CHIP continues throughout the year.
The Hawaii Health Connector is a nonprofit organization and overseen by a 15-member board. Tom Matsuda was named interim executive director of the exchange in December 2013. Matsuda replaces Coral Andrews, who resigned.
Given Hawaii Health Connector’s status as a nonprofit, state government has limited control over marketplace finances and operations. A bill under consideration in the House for a time proposed making the marketplace a state agency. However, with some legislators worried about taking on the marketplace’s revenue problems, the bill has been modified. HB 2529 now calls for more Legislative oversight, new advisory groups, and changes to the board of directors.
Hawaii Health Connector
State Exchange Profile: Hawaii
The Henry J. Kaiser Family Foundation overview of Hawaii’s progress toward creating a state health insurance exchange.
Let your Hawaii governor and legislators know how you feel about the state’s proposed health insurance exchange.Hawaii Governor Neil Abercrombie