‘Diverse’ population one of many factors in Hawaii’s failing health exchange

 CUT US OUT: U.S. Rep Colleen Hanabusa, D-Hawaii, says Hawaii should be exempt from ACA requirements. AP file photo

by Malia Zimmerman, Watchdog.org, April 4, 2014 

HONOLULU — Six state health exchange directors, including the head of Hawaii’s Obamacare exchange, were grilled Thursday by multiple U.S. House committees trying to determine why the websites aren’t working properly.

The committees are looking into how the six states with troubled Obamacare exchanges spent hundreds of millions of dollars in federal grants, yet still have low enrollment and glitch-filled websites.

U.S. Rep. Colleen Hanabusa, D-Hawaii, said residents of her state are “frustrated and embarrassed” because of the low enrollment in the Obamacare exchange, and “very concerned” about how the $204 million federal Affordable Care Act grant has been allocated and spent.

Tom Matsuda, interim director of Hawaii Health Connector, said just over half of the $204 million has been spent or allocated, and blamed several factors for Hawaii’s record low enrollment, which is now at 7,242 individuals and 281 small businesses. See the full testimony here.

While Hawaii’s Gov. Neil Abercrombie predicted “hundreds of thousands of people” would enroll, and the Connector’s board of directors estimated at least 50,000 people would enroll this year, “significant issues” have prevented those numbers from becoming reality, Matsuda said.

Both Hanabusa and Matsuda described Hawaii’s health insurance marketplace as “unique.”

That’s because Hawaii’s Prepaid Health Care, in place since 1974, requires most employers to offer coverage to employees who work more than 20 hours per week, and has other requirements more stringent than the ACA, Matsuda said.

That law, and other government subsidized health insurance programs, have left Hawaii with only 8 percent, or about 100,000 of Hawaii’s 1.4 million people, uninsured, Matsuda said.

 TROUBLED: Hawaii Health Connector Director Tom Matsuda testifies Thursday before Congress on Hawaii’s problem-filled Obamacare exchange

Hanabusa noted she wasn’t in Congress when the ACA was passed, and said Hawaii has an exemption to the law because of the Hawaii Prepaid Health Care Act.

“So why not use it?” she asked.

Matsuda said the governor and Legislature are looking into that issue.

Matsuda said Hawaii’s diverse population and geography are impacting enrollment due to language barriers and cultural outreach issues.

Congress members were particularly interested in Hawaii’s selection of the Canadian technology company CGI, which created the technically flawed software for both Hawaii and the federal Healthcare.gov.

Hawaii has allocated $74 million to GCI for the creation and maintenance of the website, even though it still doesn’t work properly several months after the October launch.

Matsuda told Congress that Hawaii chose to do business with CGI because the company also was chosen by the federal government, which has since canceled its contract because of major flaws in the system. Matsuda said CGI still has work to do on Hawaii’s website.

In addition, there is a backlog of 11,000 people seeking federal subsidies for health insurance that have been processed by the state Medicaid program but still must be evaluated by the Connector, Matsuda said.

“We are working to make the necessary eligibility determinations in order to process the applications that remain in queue at this time,” Matsuda said. “We have more than tripled the number of call center representatives and are making as many as 1,000 outbound calls each day to collect information from consumers so we can process their applications.”

The Connector must be self-sustaining as of Jan. 1. A 2 percent fee is assessed on every plan, but that won’t cover the Connector’s estimated operational costs of $15 million to $24 million a year without state or federal subsidies.

Matsuda said small business enrollments are key to sustain the system, but participation has been lacking.

“Due to the existence of Hawaii Prepaid Health Care Act and the small number of health insurers in the state, there is little need for the average small business to use (it.) The ACA small business tax credit is a real incentive, but few businesses may decide that the credit provides enough incentive to leave familiar insurance plans and processes they have used for many years,” Matsuda said.

The federal and state decisions to let employers remain with their existing insurance plans through 2016 also has reduced the volume of potential customers, Matsuda said.

Matsuda was joined in testimony by the directors of exchanges in California, Maryland, Massachusetts, Minnesota and Oregon.

U.S. Rep. Patrick McHenry, R-N.C., asked every exchange director if they would “personally guarantee” that personal information on the exchange is protected from hackers. They all agreed the sites were safe.

He also asked if the exchange directors had themselves signed up for Obamacare, and most, including Matsuda, said they had not.

---30---