The Affordable Care Act, talked about in the abstract since it became law three years ago, will become concrete reality to most Americans within six weeks, when the various state and federal health-insurance exchanges go online.

Some are now raising the alarm that the Hawaii Health Connector, which is Hawaii’s private nonprofit exchange, is attracting too few competitors to keep premium costs in check. So far only the Hawaii Medical Service Association (HMSA) and Kaiser Permanente have confirmed they will sell medical plans on the exchange, with Hawaii Dental Service being the third Connector entity so far.

The counterargument begins with Coral Andrews, the Connector’s executive director, who maintains that the Oct. 1 opening-day roster won’t be released until the end of August. She added that there have been enough inquiries to indicate that participation can grow.

"What I can say is there’s a lot of interest, beyond just those you’ve named, both for medical plans and dental plans," Andrews said. "They may wait and see how the market plays out the first year and plan to play."

But there are others who plainly are far from bullish about the prospects for robust competition, at least during the earlier stages of the full "Obamacare" rollout.

The crystal ball offers little clarity about how consumer costs will play out, although about three-fourths of the population can take hope from projections that they will qualify for some subsidies under the federal law. And even on the issue of competition, most experts agree there are characteristics of the local marketplace that complicate the picture.

On one side of the divide stands J.P. Schmidt, the former state insurance commissioner during the administration of Gov. Linda Lingle. He acknowledges the challenges faced by new entrants to Hawaii’s relatively small market — including the bureaucratic delays — but he argues in favor of breaking down barriers to competition.

"Hawaii falls into the category where it is less competitive," said Schmidt, who now heads Family Health Hawaii, a new insurance carrier that is going through the process of reviews before it could enter the Connector marketplace.

He pointed to evidence from New York and California, where there is substantial competition on their state exchanges, of downward pressure on premium prices.

"You can get facts that show that yes, if you have more competition, it will have an advantage in pricing," Schmidt said.

At the opposite end of the debate is retired Circuit Court Judge Rey Graulty, who held the same job as Schmidt when Ben Cayetano was governor.

The difficulties entering the Hawaii market experienced by Summerlin Life and Health Insurance Co., which sold its isle membership portfolio to Hawaii Medical Assurance Association in 2010, "proves the uniqueness of our market," Graulty said in an e-mail response to a Star-Advertiser inquiry.

The aspect of Hawaii’s market that stands out is the dominance of a few players, he said, especially HMSA. Kaiser and HMAA follow in size among health insurers in the state.

"We have HMSA with 80 percent of the market and Kaiser, HMAA and a few others with the rest," he continued. "Summerlin a few years ago entered the Hawaii market and found it very difficult to penetrate. HMSA’s size, its nonprofit status and its established network of physicians make them very formidable."

"It’s not so much that HMSA is a nonprofit — there are many nonprofits throughout the nation involved in health care," Graulty added. "It’s more that, unlike other Blue Cross-Blue Shield affiliates in other states, HMSA is a mutual benefit society under our state insurance laws.This means they do not have to pay the 4.66 percent GET (general excise tax), a decided advantage over any insurer trying to break into the health insurance business in our state.

"They are the 800-pound gorilla protected by state law," he wrote. "It is not a level playing field — it was never intended to be level.In exchange for this status, we in Hawaii are supposed to enjoy lower health insurance rates, which while becoming less and less the case, has been relatively true in the past."

Gordon Ito currently holds the state insurance commission title, at a time when it is probably most challenging to do so. There are reasons why carriers haven’t been flocking yet to the exchange, he said, including the basic hesitation to see who ends up in the insurance risk pool.

If the younger group starts signing up — a group known as the "young invincibles," people who tap health services infrequently — then insurers may be more willing to jump.

That kind of cautious approach, he said, is actually typical across the country. Even large insurers most likely to write policies for multiple states are in general holding back, he said.

What’s not typical is the particularly narrow rate of return in the health insurance industry in Hawaii, Ito said, making an even a stronger case for caution. He pointed to a National Association of Insurance Commissioners Profitability Report showing a 2009-2011 average of 4.5 percent, and because that includes long-term care insurance, he suspects conventional health insurance rate of return is lower.

A major cause of that low return is the state’s 38-year-old Prepaid Health Care Act, which set a comparatively high bar for employers to provide comparatively rich health coverage.

"Where insurers are making large profits, that’s where competition will bring down the level of return," Ito said.

He cited a provision of the ACA known as "medical loss ratio": Insurers spending too much on non-medical costs must pay rebates to their members. Hawaii was the only state with no rebates on its comprehensive health plans, Ito said.

Ito’s role in the ramp-up to the ACA is to determine which plans qualify for the exchange, and the particular challenge is that requirements of both the ACA and the state’s Prepaid Health Care Act (PHCA) have to be met, Andrews said.

Health plans at all four price-points authorized by the federal law — dubbed the platinum, gold, silver and bronze plans, in a descending order of coverage and cost — will be available on the exchange for individual purchasers.

And because the PHCA mandates richer benefits than the federal law, she added, employers who purchase health insurance for their workers on the exchange in order to claim the ACA tax credits won’t find the less comprehensive, lower-price plans that may be available in other state exchanges.

That disappointed Schmidt, who hoped to sell a lower-priced plan on the exchange as another option.

"When you limit choices like that, you have less competition — not only fewer companies but fewer ways in which they can compete," he said.

Andrews insisted there are still revenue incentives to join the marketplace, once insurers feel less uncertain about the risk.

"There’s a value proposition that they see in participating on the marketplace," she said. "Dependent upon the total enrollees, some of the figures I’m hearing, it’s anywhere from $300 million revenue potential that will cross the marketplace to up to $1 billion worth of sales."

The actual cost to consumers will be the premium rate — a purchaser’s age and whether or not they smoke will be factors in that, but not preexisting medical conditions — minus the subsidies that they get, assuming they earn no more than 400 percent of the federal poverty level.

The bottom-line experience will be very individualized, but Ito used some actuarial data to make estimates, and the greatest benefit will be at the lowest end of the income scale.

For example, someone who earns $19,845 a year or less, or 150 percent of the poverty level, could receive subsidies leaving only $67 a month in premium expense.

Some states are enacting laws requiring health insurance to be sold on the exchange to make the marketplace more competitive, but Ito has no plans to propose such a bill, preferring to let carriers choose to sell on or off the Connector.

The greatest potential of the ACA, he said, is how it could bend the cost curve over the long term, not immediately. More insured people means fewer drawing on unreimbursed care at emergency rooms, driving up costs. And its promotion of preventive care — with patient responsibility — could lead to a healthier population.

"We all collectively have to take better care of our health," he said. "What really concerns me is an increase in health costs — that really is going to kill Hawaii."