Grim scenario for Hawaii's Obamacare plan: The numbers don't add up

by Maeve Reston, LA Times, February 27, 2014 (excerpt)

As the Hawaii Legislature weighs bills that would make sweeping changes to the state’s Obamacare program, the interim director of Hawaii's healthcare exchange on Wednesday laid out a grim financial picture facing the agency.

With anemic enrollment by individuals and little interest among small-business employers, the state’s nonprofit exchange -- known as the Hawaii Health Connector -- is unlikely to have enough money to pay its bills, even under the best of circumstances, when federal grant money dries up in 2015.  

The exchange had originally planned to stay afloat by collecting a 2% fee on every plan sold through the exchange, but with the slow pace of enrollment and changing federal rules -- delaying the employer mandate and allowing canceled plans to continue -- Interim Director Tom Matsuda said Wednesday that the math simply does not add up.

Last week, Matsuda and the Health Connector’s board members used expected enrollments by 2016, as well as the average premium costs, to calculate how much the exchange could collect by exacting its 2% fee on each plan.

“That revenue figure is far below what we think our expenses are going to be,” said Matsuda, who has estimated that the agency will need about $15 million a year starting in 2015. Health Connector board members also looked at the best-case scenario for enrollment, and “even then, we’re still short on having enough revenue to cover projected expenses,” he said....

One major source of the problems is a communication breakdown between the two systems that a consumer must navigate to get signed up for a health insurance plan. Every Hawaiian must get a denial of Medicaid eligibility through the state system -- built by one contractor -- before they can apply for tax credits to help buy a plan through the Health Connector’s system -- built by a second contractor.

Nearly 20,000 applications have been caught between the two systems....

read ... The LA Times

Related: LA Times: Hawaii Health Connector Refused to Cough up Secret Budget