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HMSA CEO: Hawaii should shut down health exchange

By Cathy Bussewitz

Associated Press

LAST UPDATED: 05:10 p.m. HST, May 09, 2014

The chief executive of Hawaii's largest health insurance company is calling on Hawaii to shut down its beleaguered health insurance exchange, which was set up as part of President Barack Obama's signature health care law.

Michael Gold, president and CEO of Hawaii Medical Services Association, says the state shouldn't keep spending money on the Hawaii Health Connector, a system that he says is financially unsustainable and does not work.

"I think there's an alternative that Hawaii needs to pursue immediately," Gold said in an interview with The Associated Press.

Hawaii should ask the federal government for an exception to the part of the Affordable Care Act that requires states to set up and run their own insurance exchanges, Gold said. He thinks businesses should buy approved plans directly from insurance companies, as they have done in the past. Individuals would do the same, or the federal government could take over that part of the exchange, he said.

Lawmakers on Friday were outraged at Gold's assertion that the state hasn't already pursued flexibility from federal requirements. Rep. Angus McKelvey of West Maui said they sought waivers from the federal government and were told they had to wait until 2017.

"We tried. We aggressively pursued that," McKelvey said. "The federal government says there's only one route to go."

The state already is pursuing ways to streamline the exchange by removing it as the middle-man between employers and insurers, and seeking waivers from the federal government, said Beth Giesting, health care transformation coordinator for Gov. Neil Abercrombie.

"It is a simplified role for the Connector, rather than no role for the Connector," Giesting said.

The Legislature also passed a bill setting up a task force to pursue the waiver.

The rollout of Hawaii's health exchange was delayed and plagued with technical problems. The Connector was awarded more than $200 million in federal funds. It has used about $100 million. It signed up 9,217 individuals, plus 628 employees and dependents. To date, the Connector has raised only $40,350 in user fees, according to Nathan Hokama, the exchange's spokesman.

Sherry Menor-McNamara, chairwoman of the Hawaii Health Connector, said lawmakers and exchange officials have been talking about making the exchange more responsive and efficient.

The exchange has to make deep cuts and renegotiate contracts to survive, Tom Matsuda, interim director of the Hawaii Health Connector, has said. Lawmakers sent a bill approving $1.5 million in state support — far less than what the exchange asked for — to Gov. Neil Abercrombie.

Gold said trying to sustain the exchange is the wrong approach because it would cost the public too much, either through fees on insurance companies or taxes.

"The real question is how do you, in a sense, get out from under the Connector, and use the assets that Hawaii has already to get to the aims of the Affordable Care Act?" Gold said.

Hawaii already had a relatively low number of uninsured people because of its Prepaid Health Care Act, which requires employers to provide subsidized insurance to workers. Because of that 1974 law, Hawaii can argue it already was meeting the Affordable Care Act's goals, Gold said.

Gold said insurance companies can manage tax credits, one part of the exchange that had big problems during open enrollment.

The Hawaii Medical Services Association serves nearly 733,000 members, spokesman Floyd Takeuchi said. The company also is on the Board of Directors for the Hawaii Health Connector, and in that role participated in building the exchange. But the Legislature passed a bill last week that directs the Connector to remove insurance companies from its board.

"It's very funny how when this bill removing insurers is going to the governor that all of a sudden now, HMSA, who sat on this exchange, is calling for its dismantle," McKelvey said.

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den wrote:
I wonder what his motives are to say that. too much competition?
on May 9,2014 | 11:45AM
jomama wrote:
Too much transparency, everyone finding out how much less expensive Kaiser is.
on May 9,2014 | 12:18PM
Skyler wrote:
You get what you pay for, imho.
on May 9,2014 | 01:17PM
Torchwood wrote:
Compare clinical outcomes and it isn't even close. Kaiser Hawaii is not only the best plan in Hawaii, but is ranked 25th in the entire country! So you're right at Kaiser you get what you pay for, and with HMSA you don't!
on May 9,2014 | 03:01PM
droid wrote:
These cookie-cutter studies always fail to look at the big picture. HMSA will cover the best specialists statewide for your unique condition.

At Kaiser, its whichever doctor works at the clinic, or nothing. So “best plan” is a relative statement.
on May 9,2014 | 11:55PM
islandsun wrote:
on May 9,2014 | 01:26PM
NITRO08 wrote:
Had Kaiser they suck!
on May 9,2014 | 11:58PM
false wrote:
Make money and lots of it.
on May 9,2014 | 12:41PM
Kalaheo1 wrote:
Since HMSA is only one of two insurance companies participating in the ACA website, he's going to get the insurance premiums regardless.

Perhaps because the state of Hawaii has proven itself to be completely incompetent and wasteful in signing people up, he thinks his company can do a better job, faster.

on May 9,2014 | 01:04PM
Readitnow wrote:
Gold is correct in saying that we don't need the Health Connector. HMSA and Kaiser have been doing this for a long time and doing it efficiently. Spending $200 million to set up a new system and train more people is crazy. Most of the state is already signed up and we don't need another way to dump cash.
on May 9,2014 | 04:58PM
pcman wrote:
Actually HMSA is lager than Kaiser. The funds spent on Obamacare signups could be used to medically treat poor people.
on May 9,2014 | 01:35PM
localguy wrote:
If you are thinking only on island you are right. If you compare the entire Kaiser HMO to include all the states it is in the mainland, HMSA is basically a health clinic in comparison.
on May 9,2014 | 02:45PM
hawaiikone wrote:
If we include Blue Cross in the picture, of which HMSA is an independant member, then HMSA dwarfs Kaiser.
on May 9,2014 | 03:31PM
duncancadie wrote:
We need more carriers on the exchange to encourage competition and encourage efficiency.
on May 9,2014 | 03:34PM
saywhatyouthink wrote:
This is all Abercrombie's fault, he and his appointees are incompetent and incapable of managing the affairs of the state. 100 million to enroll 9000 people? You know someone is getting rich on this scam and Abercrombie is neck deep in it.
on May 9,2014 | 05:19PM
konag43 wrote:
the health exchange is a farse my doctor took in 6 patients and it has been 4 months and he still has not been paid .
on May 9,2014 | 11:49AM
Manawai wrote:
"The Hawaii Health Connector was awarded about $200 million in federal funds and enrolled about 9,200 people in six months."

A perfect example of government efficiency. Do you think if it was their own money and not our tax money they'd do such a horrible job? But then, Niel Abercrombie hired Michelle Obama's college roommate's Canadian employer to write the software which still doesn't work properly to this day. That was the firm that wrote the ACA national site. No surprise there. Government corruption at its finest! Vote for Niel and get more of the same!!!! Hurray!!!

on May 9,2014 | 11:51AM
islandsun wrote:
Yup! Add another Abercrombie failure to the list.
on May 9,2014 | 01:22PM
AhiPoke wrote:
Mr. Gold is correct but unlikely to change the federal government's mind. Why? Because the federal government doesn't care about what it costs. Virtually everything they do wastes money so why should this matter. They'll just print some more. Our government is out of control.
on May 9,2014 | 11:56AM
Bdpapa wrote:
Yes !
on May 9,2014 | 09:05PM
hywnsytl wrote:
Look at the rates HMSA ands Kaiser charge customers, afforadble care act is cheaper. Maybe HMSA should spend less on commercials and save their membership money. we need to keep the connector and waive the hawaii statute.
on May 9,2014 | 12:14PM
LRob69 wrote:
HMSA and Kaiser are the only 2 health plans on the connector, so the cheaper rates you speak of come from them. You might want to check your facts first...
on May 9,2014 | 12:38PM
AhiPoke wrote:
"afforadble care act is cheaper" - really? Everything I've read/heard is the opposite. Didn't the president win an award, for telling the biggest lie last year, for saying that?
on May 9,2014 | 12:54PM
HawaiiNoKaOi wrote:
For just a little while, the interisland fare war will benefit the consumer......we definitely need more competition to control Healthcare costs! Aloha!
on May 9,2014 | 01:11PM
Anonymous wrote:
" . . . afforadble (sic) care act is cheaper . . . " Deductibles under ACA are significantly higher.
on May 10,2014 | 12:51AM
PakeLady wrote:
Good to see leadership from the private sector. We definitely need a clear path forward after the Connector disaster. Kaiser is glaringly absent from this conversation.
on May 9,2014 | 12:27PM
TheFarm wrote:
This is some serious B.S. HMSA record profits and huge bonuses to Gold...as they were actively denying coverage to the ill, unemployed and at risk. ACA is working fine, thank you, not interested in shutting it down to feather your fancy nest. Those days are done.
on May 9,2014 | 12:56PM
PakeLady wrote:
It helps to do a quick Google search before posting. If you had, you'd know HMSA lost money last year under Gold: http://www.bizjournals.com/pacific/news/2014/02/28/hawaii-medical-service-association.html. The losses were attributed in part to costs from Obamacare. And those losses mean higher rates for all of us.
on May 9,2014 | 01:15PM
AhiPoke wrote:
"ACA is working fine, thank you, not interested in shutting it down" - did you read the article? He didn't suggest shutting the ACA down. He's suggesting shutting down the insurance exchange. Do you know the difference?
on May 9,2014 | 01:36PM
PakeLady wrote:
Yes I know the difference and you're right, my language was sloppy. Obamacare is the entire law that was passed in 2010; health insurance exchanges are the most visible part of the law. I'm in favor of Obamacare since it has a lot of preventive health stuff that will keep families and kids healthy, and the federal exchange seems to be working well. But Hawaii's exchange has been a disaster. It enrolled 9,200 people, the smallest number in the nation, while acquiring $200 million in federal grants.
on May 9,2014 | 01:57PM
AhiPoke wrote:
Look again. I wasn't writing about what you said.
on May 9,2014 | 05:09PM
krusha wrote:
Sounds like he's just trying to find ways to jack up the prices more for HMSA insurance like he is doing it for all of their current customers who signed up with them directly. Insurance companies have always been against any government regulation since the only thing it hurts is their bottom line.
on May 9,2014 | 01:19PM
Bully wrote:
The entire State government is a big screw up.
on May 9,2014 | 01:30PM
inlanikai wrote:
He's right the Connector should close. Unfortunately, his conflict of interest undermines his assertion.
on May 9,2014 | 01:39PM
benkayacpa wrote:
$200,000,000 divided by 9,200 people = $21,739 per person. Our government spent $21,739 of our tax dollars to sign up one person for health insurance. We need smarter people in charge of our tax dollars.
on May 9,2014 | 02:26PM
earlson wrote:
health connector is a waste of our money especially since we now need to fund it without any more federal money. We should have let the feds deal with it. A mistake by Abercrombie that can be easily remedied by ending it.
on May 9,2014 | 02:49PM
geniusboy wrote:
Obamacare needs to go. What a waste of money. Terrible idea. Worse execution. We no longer have health "insurance". Insurance means you pay for something in case the bad event happens, to protect yourself. Now, even if you get sick, you can get health insurance. That is not health insurance. WHY DID HEALTH INSURANCE COST SO MUCH BEFORE, AND NOW EVEN MORE WITH OBAMACARE? Because unlike auto insurance, if you get an old car in a wreck, they junk the car and pay salvage value as it costs more to get the old car going. In health insurance, an old guy or gal gets sick, and we spend hundreds of thousands to keep them going, even though they no longer work but go to vegas every month. Compassion is fine, but don't complain if your health care and living costs go up because of your soft heart.
on May 9,2014 | 03:04PM
HealthyandHappy wrote:
The state would loose many, many jobs. it will never be done. However they will spend millions on studies to fool the voters.
on May 9,2014 | 03:14PM
duncancadie wrote:
More carriers should enter the exchange to increase competition and encourage efficiency. Hawaii enacted the Prepaid Health Care Act in 1974, and was the first in the nation to require employers to provide mandatory coverage for eligible employees. Stats show that Hawaii residents have the highest expectancy rate in the nation. The relatively low number of sign ups on the exchange could be attributable to the fact that most already had healthcare. But that does not mean the exchange should be shut down. Many people stay at jobs they do not like just to keep coverage. The exchange provides options.
on May 9,2014 | 03:29PM
DAGR81 wrote:
HMSA is a "non-profit" ...what a joke.
on May 9,2014 | 03:53PM
saywhatyouthink wrote:
These people should have known before spending 100 million to enroll 9000 people that this wasn't going to work. HMSA and Kaiser in particular should have known since they sit on the Board of the connector and helped to set it up. They are also the only 2 insurance companies that are participating with the connector. Abercrombie is completely incompetent and unable to effectively manage the affairs of the State. He needs to go.
on May 9,2014 | 05:14PM
duncancadie wrote:
The Legislature acted correctly in passing a bill to remove insurance carriers from serving on the board of the Hawaii Health Connector. I don't understand why they were allowed to serve in the first place. What a conflict of interest! This is probably why the exchange did not operate smoothly. You cannot expect carriers to encourage competition against itself.
on May 9,2014 | 06:23PM
Numilalocal wrote:
He's just one of the innumerable reasons that HMSA sucks.
on May 9,2014 | 06:36PM
markeno wrote:
I agree with Mr. Gold that the Health Exchange should be shut down though I disagree with having the mongoose watch the chicken house. ACA only came about because organizations like HMSA simply enjoyed a monopoly on health care and could essentially charge whatever they wanted. Another example is Hawaiian Electric till finally the PUC has come in and told them what they are supposed to do. Ironically I ended up going straight to HMSA after a month of trying to deal with the Connector. Due to the ACA though the Bronze level plan I chose for my family is pretty comprehensive and comparable to what we had with HMSA though at twice the price. I doubt HMSA on their own would have cut my premiums in half for what I was paying. For the technically inclined, when you viewed source (code) on the Connector's site and saw that the Star Advertiser's web team was building the site you simply has to say WTF! Someone made a lot of money on the Connector and we the people who are simply wanting health care got the shaft.
on May 9,2014 | 06:58PM
loio wrote:
stupid obama. stupid democrats. fools in ways you could never explain to them and get through. basic health care is not a right, but it's something history's most humane society (ever) affords to those who, for whatever reason, can't get there. but EQUAL (government top down) health care, I'm not there yet. you get up at 4 a.m. everyday to work, and on weekends, you and your kids deserve better health care than some asshole who never like work and his kids. "obamacare" ... sucks.
on May 9,2014 | 09:30PM
mudsprkt1 wrote:
HMSA is losing (lost) a lot of customers. That means less bonus moolah..Rates keep climbing, we pay more and get less, and HMSA is non-profit????????
on May 12,2014 | 04:59AM
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