Hawaii insurance exchange gets new director

Jeffrey Kissel, the new head of the Hawaii Health Connector, doesn’t have much time to figure out how to keep the insurance exchange afloat, given that federal funding runs out in little more than a year.

Kissel, 64, former president and chief executive officer of HawaiiGas, will take over at the Connector on Oct. 13, earning an annual salary of $150,000.

The Connector, Hawaii’s version of Obamacare, has been plagued with problems from its inception, enrolling just 10,800 people after a series of computer glitches left consumers frustrated and looking elsewhere for coverage.

Kissel said his first priority is to put a strategic plan in place after listening to stakeholders, customers and exchange officials. He said he must learn more about the Connector’s financial situation before implementing a plan for the enterprise.

The organization, created by the Legislature in 2011, received $204.3 million in federal grants, mostly to establish the online insurance marketplace. Most of that money has been spent and what’s left is due to expire at the end of next year.

The federal funds are only for use in building the Connector, not for day-to-day operations. Connector officials have said they need at least $4.7 million per year to operate. The Legislature appropriated $1.5 million for operations in the first half of next year.

"You’ve got to manage costs and deliver value," Kissel said.

The Connector was hoping it would earn $320,000 in the first six months of operations from a 2 percent fee it collects on each insurance policy, but it took in only $40,350.

The exchange attracted just two medical insurers — Hawaii Medical Service Association and Kaiser Permanente Hawaii.

Some gubernatorial candidates critical of the Connector contend the state should get out of running the health exchange altogether and consider letting the federal government take over. But Kissel said federal programs charge higher premiums for health insurance than Hawaii’s exchange.

"The costs are likely to rise," Kissel said. "That means more money coming out of Hawaii households."

Kissel is the nonprofit group’s third executive director in a year since it fumbled the start of the exchange last October.

He replaces Tom Matsuda, who has been serving on an interim basis for 10 months. The Connector’s first director, Coral Andrews, abruptly resigned shortly after the organization failed to open for business on Oct. 1, the scheduled start of the enrollment period under the Affordable Care Act.

"I believe that everyone deserves to have health insurance coverage, and the Hawaii Health Connector is a highly viable resource for reasonably priced, high-quality health care," Kissel said in a press release.

In August, the state’s dominant health plan, HMSA, pulled out of the exchange for small businesses, leaving just one insurance company, Kaiser, for employers to select.

Kissel took an early retirement from HawaiiGas in May 2013 after leading the company for more than five years. He was instrumental in a number of HawaiiGas initiatives, including the company’s work on developing renewable sources for the synthetic natural gas it produces, and its push to bring liquefied natural gas to Hawaii to drive down energy costs.

He came to Hawaii as a student in 1968 and received his bachelor’s degree in business administration and MBA from the University of Hawaii at Manoa.

"I’m at a place in my career where I can really give back to the community and do something that will make a difference in people’s lives," Kissel said. "I am looking forward to hitting the ground running to prepare for open enrollment, which starts Nov. 15."

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The Associated Press contributed to this report.