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Spending proposal for health connector is rejected

By Cathy Bussewitz


The head of Hawaii's troubled health connector said Friday that the federal government denied a request that would have improved its financial situation by allowing it to spend its money more slowly.

Officials from Hawaii Health Connector had asked for more time to spend what remains of about $205 million in federal funds, because most of the money has to be spent by the end of 2014. But the federal government denied the request, not just for Hawaii, but for all the states that asked, said Tom Matsuda, interim executive director of Hawaii Health Connector.

"It's obviously not the news we wanted to hear, but it's where things currently stand," Matsuda said at a meeting of the connector's board of directors.

Hawaii Health Connector has spent roughly $100 million of federal funds so far, spokesman Bobby Lambrix said. It can't just draw down the remaining $105 million and save it for the future, because every expense has to be approved for specific purposes, and the money can't just be set aside for future operating expenses, he said.

Enrollment in the connector has been much slower than anticipated, so revenues have been low. Nearly 5,400 people bought individual insurance through the exchange by March 15, up by about 400 from a week ago. Software problems and a delay in open enrollment led some people to skip the exchange altogether and buy plans directly from insurance companies to meet the March 31 federal deadline to enroll in coverage.

The Hawaii Legislature has been considering giving money to the connector if the nonprofit agency can't come up with a plan to sustain itself, and Matsuda has said he will present lawmakers with a sustainability plan in the next few weeks.

On Thursday state Sen. Sam Slom, the lone Republican in the chamber, challenged the Hawaii Department of Health to produce documents that detail the connector's grant applications and explain how it has spent its money. He said the connector was fatally flawed from the beginning with an unrealistic business plan. If he didn't get the documents, he would ask the U.S. Government Accountability Office to investigate the Hawaii exchange, he said.

"The Connector takes any assertions about transparency extremely seriously," Matsuda said in a statement.

"Since the beginning of the legislative session, the Hawaii Health Connector has been committed to providing any and all relevant information to the Legislature so that they can make informed choices. With only 10 days left until the end of open enrollment, we hope that Sen. Slom will put politics aside and join us in helping Hawaii's uninsured get coverage."

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peanutgallery wrote:
There needs to be an accounting of all funds spent on this. Incredible how much money was spent, on so few!
on March 22,2014 | 03:50AM
South76 wrote:
Just shut this social program down. It is not viable, it won't be self-sufficient; if it remained in place, the hard working tax payers are going to be burdened with increase taxes to support the freeloaders of this state.
on March 22,2014 | 06:54AM
soundofreason wrote:
"It can't just draw down the remaining $105 million and save it for the future, because every expense has to be approved for specific purposes, and the money can't just be set aside for future operating expenses, he said.">>> Wow, we may have accidentally stumbled on how we can stop our LOCAL govt's spending problem.
on March 22,2014 | 08:21AM
AhiPoke wrote:
This is a really rare situation but hopefully something that will be repeated many more times. Generally government is all about spending money. When was the last time you heard of a bill to cut cost? Why? Because our political system is set up to benefit politicians who "bring home the bacon". Government departments are also incentivized to "spend it or lose it". Hopefully this is real and not some BS before they back door the funding.
on March 22,2014 | 09:05AM
Papakolea wrote:
Do people who sign up through the connector have to renew through the connector? If so, do they have to pay a fee to the connector each time they renew? If the fee the connector gets is a one shot deal, then there's no way that it could ever have been even remotely sustainable anywhere. You simply won't have that many new users signing up every year.
on March 22,2014 | 01:18PM
holumuahawaii wrote:
The connector is costly, works poorly, if at all, and has enrolled 5400 people at a cost of $100 million. That amounts to $18,518.52 each! Come on! If that does not define failure, what does?
on March 22,2014 | 03:30PM
SteveToo wrote:
This is so STU-PID. There are a little over 1 million people in Hawai`i and they have $205 million dollars to spend. Give every "citizen" of this state 1 million and they will be able to finance any medical problems. No need for insurance at all. Shoots. They could giver every "citizen" $2 million and might even have a little to send back to the Feds. I'm waiting for my $2 million check.
on March 22,2014 | 03:37PM
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