Hawaii Health Connector — Missing the connection?

Over the past few days, we’ve engaged in a vigorous discussion about the future of the Hawaii Health Connector, our state’s online exchange that offers individuals and businesses health plans as mandated by the Affordable Care Act (ACA). Much rides on the outcome of our discussions.

I believe in the ACA’s goal of universal health insurance coverage for Americans. It’s an important goal befitting a great nation with a strong tradition of providing assistance for those who need help the most. In some areas, the Hawaii Health Connector has moved our state closer to that goal, particularly in helping to identify some 30,000 of our friends and neighbors who may be eligible for QUEST insurance coverage.

But here’s the problem: Since 1974, Hawaii law has mandated that businesses provide health care insurance to their employees who work more than 20 hours a week. This mandate is called the Hawaii Prepaid Healthcare Act, and it’s been one of our state’s great public policy success stories.

In states that don’t have an equivalent of the Hawaii Prepaid Healthcare Act, the ACA provides needed security for workers. It’s the vehicle through which workers gain access to health insurance. But by applying that federal exchange mandate to Hawaii, which already requires such coverage, we’re needlessly building and maintaining an expensive system that will simply enroll employees into the same coverage they already have. It’s a waste of precious funds.

Those funds are going to come from one or more of three places: federal taxes, state taxes, or fees assessed on insurance providers, such as HMSA. And any fees assessed on HMSA, or any other health plan, will be passed along to members and participating businesses. So who pays for an unnecessary online infrastructure? You do.

I believe the state administration should ask the federal government for a limited waiver from the small business market exchange requirement of the ACA. Yes, I know that the ACA allows for waiver applications in 2017. And some in our state believe there’s no way we can get a waiver application considered now. 

In that regard, the state Legislature’s recent action to form a task force to seek a waiver in 2017 was a good move. But I believe we should still try for a limited waiver this year.

Let me be clear: There’s no need in Hawaii for the small business exchange, or so-called SHOP. But the Hawaii Health Connector also serves the individual market. Because our uninsured population is relatively small, thanks to the Hawaii Prepaid Healthcare Act, a scaled-back (and thus less costly) Hawaii Health Connector could still serve that market. It’s even possible that we could come up with an innovative way to have individuals go directly to participating health plans.

So let’s use the Hawaii Prepaid Healthcare Act to seek a limited federal waiver — now — from that portion of the ACA that requires businesses to provide health plans for employees. If we fail at getting the waiver before 2017, so be it. At least we tried our best to control spending and keep health plan costs as low as possible for individuals and businesses.