Hawaii health exchange pressured to close funding gap

Hawaii officials are under pressure to close a funding gap for the state's health exchange or risk being forced to move some of the exchange’s technology functions over to a federal system.

Hawaii officials may be pressured to move some of the state’s health exchange’s technology functions over to a federal system unless they can satisfy concerns about the finances of the state’s health exchange, according to an Associated Press report in West Hawaii Today.

Under the Affordable Care Act, state-run health exchanges must demonstrate that they will be sustainable this year.  But unless the Hawaii Health Connector can come up with a fresh infusion of cash, some worry the exchange won’t have enough money to support its operations.   According to the report, Hawaii’s Legislature has not yet approved the organization’s request to issue $28 million in bonds or loans.

“This is a contingency that is being imposed on any state-based exchange that doesn’t have a funded sustainability plan in play,” said Jeff Kissel, executive director of the Hawaii Health Connector.  Hawaii, however, appears to be in a unique position. “I don’t know of any other exchanges that are having to do this because it seems to me that everyone else is funded.”

If Hawaii is unable to come up with the necessary funding, the state might have to follow the path of Oregon, Nevada and New Mexico, he said, where the state health insurance exchange would continue to manage the public outreach but rely on the federal government’s underlying technology platform to sell the insurance plans.


Some state lawmakers fear a federal takeover could undermine the state’s health care law, which requires employers to subsidize good health insurance plans for many employees. It’s unclear whether a limited technology transfer that doesn’t include the employer side of the exchange would still pose such a threat, but some lawmakers have that fear.

“If we were to migrate even pieces of our exchange to the feds, we put our Prepaid Health Care Act at risk,” said state Sen. Rosalyn Baker, a Democrat from Maui, according to the report. But efforts to fund $28 million in bonds or loans ran to support the exchange hit a roadblock with legislators. Consumer Protection and Commerce Committee Chairman Angus McKelvey said his intent was to work with state budget officials on concerns about the funding mechanism, not to deny the request altogether, the Associated Press reported.

Read more from the Associated Press in West Hawaii Today.

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