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Hawaii health insurance

Aloha State joins the federal exchange for 2017

Long before the Affordable Care Act, Hawaii’s strived for healthcare access and affordability. Since the ACA took effect, The Aloha State’s approach to healthcare has continued evolve. Hawaii opted for a state-based exchange during the first ACA open enrollment period; however, due to ongoing technology troubles, the state switched to a federally supported state-based marketplace and began using for 2016 enrollment. Now, as of November 1, 2016, Hawaii has switched to a fully federally facilitated exchange. The state continues to take an active role in certifying qualified health plans (QHP)

With a new president taking office in 2017, there will likely be more changes ahead for Hawaii health insurance, as there will be nationwide. President-elect Donald J. Trump has promised to repeal and replace Obamacare soon after he takes office. Yet, open enrollment for 2017 coverage remains in effect, and we’ve addressed some common concerns here.

Hawaii health ratings

Hawaii is among the healthiest states in the nation according to the Scorecard on State Health System Performance 2015. The Aloha State placed No. 3., with first place rankings in the categories of Avoidable Hospital Use & Costs and Equity. While there is not a tremendous amount of room for improvement, Hawaii did fare poorest in the Prevention & Treatment category.

The state earned high marks for its low rate of uninsured – second lowest in the nation based on this ranking. To rise to the level of the best-performing state, Hawaii would need to see just 16,079 more adults become insured. See Hawaii’s scorecard to see how its performance on individual health measures contributed to its overall high score.

Hawaii tops America’s Health Rankings 2015, the most recent evaluation available from this organization. It’s held the No. 1 spot since 2012. In all Hawaii earned top 10 rankings for 22 of 38 measures. Strong public health funding, low uninsured rates, small disparity in health status, and policy contributed to Hawaii’s success.

Two other resources provide helpful information about public health in Hawaii. The Trust for America’s Health examines key health indicators, public health preparedness, and funding indicators. See Key Health Data About Hawaii. If you want to learn about a specific area of the state, get county-by-county health rankings for Hawaii from The Robert Wood Johnson Foundation and the Population Health Institute at the University of Wisconsin.

How did Obamacare help Hawaii?

Hawaii has long supported broad access to medical insurance. The state’s historically low uninsured rate is largely the result of the Hawaii Prepaid Health Care Act, which was enacted in 1974 and requires most employers to provide health insurance to employees who work more than 20 hours a week. The Hawaii Prepaid Health Care Act has much stronger requirements for employer-provided coverage than the ACA.

According to the Gallup-Healthways Well-Being Index, Hawaii’s uninsured rate dropped just 0.2 percentage points between 2013 and mid-2014, but it had fallen 2.9 percentage points to 4.2 percent by late in 2015.

Many states had much more significant drops in their uninsured rates, but they also started with a much higher percentage of the population without health insurance in 2013. Prior to ACA implementation, Hawaii had the nation’s second lowest uninsured rate, at 7.1 percent. By mid-2015, only Massachusetts’ uninsured rate (3.5 percent) was lower than Hawaii’s.

Medicaid expansion under the ACA has certainly benefited low-income Hawaii residents, particularly those with low or no employment and no access to the employer-based health insurance that most Hawaii residents enjoy. From late 2013 to June 2016, net enrollment in Hawaii’s Medicaid/CHIP programs grew by 52,447 people – an increase of 18 percent.

2017 health insurance carriers, rates

Hawaii’s exchange offers 2017 health plans from two carriers; they are listed below alongside their average rate increases for the new year:

  • Hawaii Medical Service Association: 35 percent
  • Kaiser Foundation Health Plan:9 percent

Those who shop Hawaii’s health insurance exchange will see significantly larger subsidies in 2017, which will offset a large portion of rate increases impacting most 2017 plans.

Hawaii enrollment in QHPs

Due to both technical problems and a small market, just 8,592 Hawaiians signed up for qualified health plans during 2014 open enrollment. As a percentage of the estimated market, that’s just 14.9 percent – one of the lowest rates in the nation and about half the national average.

By 2016, however, Hawaii’s exchange enrollment had reached 14,564.Of these enrollees, 82 percent received financial assistance and 99 percent were considered new to the exchange since Hawaii changed its eligibility and enrollment platform.

Hawaii and the Affordable Care Act

Hawaii embraced the Affordable Care Act, acting to implement a state-run health insurance marketplace and expand Medicaid.

Both of Hawaii’s U.S. senators and its lone representative voted “yes” on the Affordable Care Act in 2010. Hawaii was one of the first states to authorize a state-run marketplace, with Gov. Neil Abercrombie signing a bill into law in July 2011.

Despite the state’s early legislative action on a state-run marketplace, the Hawaii Health Connector operated poorly throughout the 2014 open enrollment period and continued to face financial difficulties in 2015. As a result, the exchange opted to become a supported state-based marketplace, and consumers will use to enroll in plans for 2016.  Enrollees who already have a plan in 2015 had to re-enroll through for 2016.

Gov. David Ige took office in December 2014, and although he is a Democrat who supports healthcare reform, he was critical of the Hawaii Health Connector’s myriad flaws and supported the switch to a supported state-based marketplace. Ige’s position is that the ACA’s provisions regarding employer-based health insurance are much weaker than Hawaii’s, and his focus is on obtaining federal waivers to protect the state’s already robust employer-sponsored insurance market, while also serving the individuals who don’t have access to employer-sponsored insurance (via continued expansion of Medicaid and access to individual insurance through the supported state-based marketplace).

Hawaii Medicaid

Hawaii is among the 32 states, including the District of Columbia, that have implemented Medicaid expansion. Prior to 2014, Kaiser estimated that 74 percent of the 102,000 uninsured, nonelderly Hawaiians would qualify for financial assistance under the Affordable Care Act.

About 58,000 of the uninsured were expected to qualify for Hawaii Medicaid or the Children’s Health Insurance Program (CHIP), and by June 2016, net enrollment in Hawaii’s Medicaid/CHIP programs had grown by 52,447 people – an increase of 18 percent.

Not all of the growth in Medicaid enrollment is due to the expanded eligibility guidelines, as some people were already eligible but didn’t enroll until the ACA’s education and outreach programs were implemented. But clearly, a significantly proportion of Hawaii’s newly Medicaid-eligible population has enrolled in the state’s expanded Medicaid program.

Read our Hawaii Medicaid page and the Medicaid FAQs on the state’s MyBenefits site to learn about Hawaii’s Medicaid program.

Other Hawaii reform provisions

The ACA’s Consumer Operated and Oriented Plan (CO-OP) Program offered loans for the creation of nonprofit insurers as a strategy to increase competition in the individual and small-group markets. During 2014, 23 CO-OPs were operational (that number will fall to 11, possibly lower, by 2016). However, none were in Hawaii.

Hawaii Medicare enrollment

In 2015, Hawaii Medicare enrollment reached 244,364, which is about 17 percent of the state’s population and on par with the percentage of the U.S. population enrolled in Medicare.

Hawaii has the smallest percentage of Medicare recipients who are on Medicare as the result of a disability: 10 percent. The other 90 percent of recipients qualify for Hawaii Medicare based on age alone.

In 2009, the Aloha State ranked 43rd in overall Medicare spending with $1.5 billion per year. As of 2014, CMS reported Hawaii’s annual per enrollee spending to be $5,967, well under the national average of $8970.

Hawaii Medicare beneficiaries can select a Medicare Advantage plan instead of original Medicare if they want to gain some additional benefits. Forty-six percent of Hawaii Medicare recipients have selected a Medicare Advantage plan. Nationwide, 12 percent of Medicare recipients were enrolled in a Medicare Advantage plan.

Medicare Part D plans are also available to Hawaii Medicare beneficiaries who want stand-alone prescription drug coverage. About 26 percent have a stand-alone Rx plan compared with an average of 45 percent nationally.

State-level health reform in Hawaii

Here’s what’s happening in Hawaii at the state level with healthcare reform:

  • SB 1028 was passed in May 2015 and signed into law by June. This state legislation granted $2 million in funding for Hawaii Health Connector, which was less than the $10 million requested. Due to funding issues and a lack of self-sustainment, the exchange was transitioned to for 2016.

Other state-level health reform legislation includes: