By Malia Zimmerman | Watchdog.org
HONOLULU — Hawaii has the lowest number in the nation of enrollments through its Obamacare exchange, Hawaii Health Connector, according to a Feb. 12 U.S. Department of Health and Human Services report.
“That’s horrible,” said state Rep. Bob McDermott.
Just 3,614 people enrolled in the state’s exchange, but the report does not disclose how many of those who registered also paid for their health care policies.
McDermott, who serves on the House Consumer Protection Committee, is one of several state lawmakers considering at least seven bills to “reform” the exchange, and launch a state government take over the nonprofit at a cost of $15 million a year.
The Puunui Republican said he sees are “dollar signs spinning in his head.”
“The exchange is already costing taxpayers $204 million, and the added bureaucracy is increasing costs for consumers and adding more layers for them to go through to get health care,” McDermott said.
The federal government allocated $204 million to Hawaii to operate its exchange and set up its network and website in 2013 and 2014.
By 2015, the Hawaii Health Connector must be self-funded. Funding can come from state subsidies, grants and fees charged to the health care providers on each policy sold. Internally, the Hawaii Health Connector reportedly planned on 300,000 sign ups during two years with a 2-percent fee charged on each policy.
Department of Human Services Director Pat McManahan professed during a Sept. 17, 2013, news conference that the Obamacare exchange would be “transformative” for Hawaii.
Gov. Neil Abercrombie praised the exchange, predicting “hundreds of thousands” of people would benefit in the state of Hawaii.
The governor also said the 100,000 people in Hawaii without health insurance would sign up — a prediction that fell short by about 96,386 people. So far, signups are under 1 percent of Hawaii’s 1.4 million population.
While the National Review called Hawaii’s exchange an “epic failure,” the Investor Business Daily, like Watchdogorg has in the past, did the math in a Feb. 14 article, noting the Hawaii exchange cost $56,819 per person.
“As the only senator who voted against the establishment of the exchange, I warned against a costly failure. That failure has now been confirmed,” said Senate Minority Leader Sam Slom.
Some local insurance industry experts said because Hawaii is unique in that it has had the Pre-Paid Health Act in place since 1976, which requires businesses offer health insurance to employees working 20 hours a week or more, Hawaii already has a high percentage of its population insured.
Because of the Pre-Paid Healthcare Act, the state also largely was supposed to be exempt from the Obamacare requirements, McDermott said.
House Health Committee Chairman Della Au Belatti said she wants the exchange to work, but thinks the state might be better suited to operate the Hawaii Health Connector. T
he state would need about $15 million a year, Belatti said in a recent news conference.
Her committee passed through measures that would allow the state takeover in 2015, and increase fees to help pay for the operation. The legislation also would require more transparency from the exchange, which has refused to disclose several key facts and figures to the media and to lawmakers, citing its independent nonprofit status.
The state also must tackle technical glitches that plague the site more than four months after its launch, state officials and industry experts have testified.
According to state technology guru Sanjeev Bhagowalia, the Connector portal is vulnerable to hackers who could expose private information.
Bhagowalia, the state’s IT director, supports a state takeover.
Expenditures, including the $53 million allocated to CGI Group to build the exchange website portal, also caught the attention of lawmakers.
Senate President Donna Mercado Kim, D-Moanalua, said she warned Hawaii Health Connector executives about past problems with the Canadian-based technology company. The state Department of Taxation spent millions on a GCI contract for a website that still doesn’t work properly.
As Kim predicted, the exchange’s website failed to work as expected for more than two weeks after it launched Oct. 1. Plans and pricing could not be displayed, and the system crashed when users tried to register.
Since the site relaunched Oct. 15, complaints include cumbersome technology, frequent crashes after the extensive forms are filled out and submitted, confusion over plan pricing and scrambled information transmitted to the health-care providers.
While the state House has introduced a number of measures to save Obamacare here, Kim said she’s not in favor of the state taking over the exchange operations, calling it a financial “black hole.”
The House has yet to negotiate the final outcome of the pending legislation with the Senate.
“I want to be clear that these measures are a work in progress and allows us to continue to establish a better framework and foundation so that the Health Connector can successfully move forward in fulfilling the goals of the Affordable Care Act,” said Belatti in a recent statement.
“Even as the (health care) landscape changes around us, we need to be able to respond to the developing rules and regulations to allow the Health Connector to move forward in achieving its mission.”
The measures must gain the approval of the majority of the 51-member House before moving to the Senate, and then it goes to the governor for consideration.
The Hawaii Health Connector, meanwhile, has stepped up its advertising efforts in recent days, purchasing exclusive media contracts the Connector won’t make public.
Contact Malia Zimmerman at Malia@hawaiireporter.com
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