REPORT TO THE 28TH LEGISLATURE Act 158, SLH 2014

EXECUTIVE SUMMARY

Prepared by: The Office of the Governor/Health Care Transformation Office State of Hawai‘I, December, 2014

The federal Patient Protection and Affordable Care Act ("ACA"), P.L. 111-148, includes many positive changes for health insurance and health care delivery and payment systems. It also imposes benefit, coverage, and payment rules and mechanisms that are not perfectly aligned with Hawai‘i’s longstanding ERISA-exempted Prepaid Health Care Act ("Prepaid"). The ACA called for the development of insurance exchanges, or “marketplaces,” to which Hawai‘i responded by creating a state-based exchange, motivated by the desire to preserve Prepaid. Hawai‘i’s state-based exchange has a financial challenge, in part, because of small enrollment numbers. This may be because the uninsured population in Hawai‘i before October 2013 when ACA-subsidized insurance became available was thought to be about 100,000. Moreover, both small and large businesses had developed long-standing approaches for purchasing Prepaid-compliant coverage so did not immediately look to the Connector for employee insurance options.

The ACA provides states opportunities to waive or modify certain provisions of the ACA to encourage innovation. In 2014, the Hawai‘i State Legislature responded to this opportunity by passing the bill that became Act 158, establishing a task force to develop and make recommendations on a waiver appropriate for Hawai‘i. This is the first report from that task force, which had its initial meeting in September 2014. The report outlines the waiver possibilities allowed by the ACA, summarizes the process and discussion to-date, and makes recommendations on moving forward with the work of waiver development, including proposed legislation and a budget. The task force affirmed that its goals include moving Hawai‘i closer to universal health insurance coverage and preserving the benefits of Prepaid.

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This initial report identifies the federal requirements for a waiver and how they will affect the timeline for legislative decision-making, application preparation and submission, and implementation. The task force finds that, in order to implement a waiver on January 1, 2017 the following conditions must be met:

1. The task force and critical policy stakeholders reach early, decisive agreement on what ACA elements should be waived, added, or modified.

2. Elements of the waiver are easily quantifiable for an actuary.

3. No other waivers (Medicaid, Medicare, or CHIP) are necessary.

4. During the 2015 session the Legislature must pass legislation authorizing the waiver and appropriate resources for staff, actuary, waiver proposal development, and community meetings.

This report does not make any substantive recommendations to the Legislature related to innovations that should be included in a waiver proposal.

read ... The Full Report

LINK: Healthcare Transformation Page

LINK: November, 2014 Act 224 Report on Health Care Administrative Uniformity