Jeffrey Kissel has largely weathered the first open-enrollment period of his tenure as executive director of the Hawaii Health Connector.
That’s the nonprofit that runs the state’s online health insurance exchange instituted under Obamacare, formally known as the Patient Protection and Affordable Care Act of 2010.
He’s lucky to have missed the first go-around in 2013. Although there were some glitches on the website this time — and Kissel said he’d like to see more oversight of the agency and verification of the website function — it was nothing like the dysfunction of the premiere.
Kissel was named in October to take over from the interim director, Tom Matsuda, who was himself a temporary replacement for the first chief, Coral Andrews.
The former president and CEO of Hawaii Gas said he took this turn in his career path because he thought it would fulfill a call to public service: Hawaii, just like every state, can improve access to health care, he said.
"That’s what this whole national exchange system does," he said. "It provides access to health care to nearly every American not covered by some other plan."
Kissel is married and stays active with daily jogs around Diamond Head. He also swims and paddles his one-man canoe ("not a jock, a survivor" he said). He may be a fit 64, but his vintage gives him some perspective on health care reform: no surprise this law caused conflict.
"I remember when Medicare went into place," Kissel said. "It created an enormous uproar. Any kind of a major piece of socially active legislation is bound to create a lot of debate, comment, concern, among very well-meaning people.
"You don’t have to be a person on one side or another to be concerned about it, because it’s a big change."
QUESTION: How was the agency able to increase staffing at call centers?
ANSWER: Those are customer-facing employees. So, open enrollment, we always staff up for that period. The federal government actually pays for that.
Q: What about in terms of the ongoing staff?
A: The Connector employees are down to 34.
Q: Those were cut because of the budget shortfall?
A: Well, also because the buildout of the infrastructure is nearing completion. So it takes fewer people to do some of the things they need to do.
Q: But the reduction in the budget cut by the Legislature: Was this reduction in part because of that?
A: No, we really were pretty much finished with the buildout. But we still need to raise additional money to get through fiscal 2015.
Q: And how will you do that?
A: We’re working on a couple of plans. But one of them is to go to our partners in government and let them know what it will take. If there is a commitment on the part of our government and our community to support the Connector, then we think we can raise the money.
Q: You’re talking about a legislative appropriation?
A: That would be one source. But there are other sources.
Q: For example?
A: For example, the foundations are supporting the California Connector, tremendously.
Q: What kind of foundations are they?
A: The various public foundations that exist in California. Private foundations … they’re nonprofits.
Q: What are the corollary foundations here?
A: We’re a smaller state, but we need less money … There’s Hawaii Community Foundation.
There are other places to go. And right now, I’m focused on the open enrollment experience for our customers. The next focus is on sustainability.
Q: Where are the bright spots in the implementation of the Affordable Care Act?
A: Nationally there are 81⁄2 million people who previously did not have access to health care, who now do. … There are hundreds of thousands of people, in every community, who have now access to Medicaid who didn’t before. We’ve helped over 40,000 people in Hawaii get access to Medicaid …
Q: Didn’t Hawaii already have broad access to Medicaid?
A: The Hawaii Prepaid Health Care Act of 1974 was the model that the nation should have adopted, and we wouldn’t need the Affordable Care Act. That (1974) act requires employers to provide a certain level of insurance coverage, not just in terms of the coverage, but also the lower deductibles and co-payments for every working person. That allowed Hawaii to develop one of the finest health care systems in the United States.
Q: Didn’t that mean Hawaii had a very small population of people still needing to get insured?
A: Sure, but so did Massachusetts. And they’re actively pursuing the Affordable Care Act benefits, as a state exchange.
There are lots of states with small percentages of folks uninsured. But because the Affordable Care Act provides for significant tax benefits and subsidies, both to business and individuals, it pays for Hawaii to do what it’s doing.
And I hope I can show people of Hawaii how much of a dividend it will pay.
Q: Tom Matsuda, the interim director before you, said publicly the uninsured market was too small to generate enough fees to sustain the Connector. How do you approach this problem?
A: We’re doing market research. We have to report to the Legislature in a little over a month about our sustainability. And we will be disclosing the market, and our ability to access the market, in terms of insuring individuals and small businesses.
And we’ll show whether or not there’s sufficient fee revenue to pay our expenses. Our expenses have been reduced to around $1 million a month. …
On a preliminary basis — I emphasize that this is very preliminary work — we have seen an indication that it looks like we can break even in about 2018-2019 and start to throw off a surplus in 2020. But I’m not going to ask anybody to take that on faith. We have to demonstrate that with hard facts.
Q: Can you say broadly how that is possible?
A: We need 130,000 insured individuals, whether they’re members of the business community or insured individual on a single basis, to break even … on an annual basis. We need about 150,000 to start to throw off enough cash to build the reserves we need to continue to do the work we need to do in the community.
Q: And you think that’s out there?
A: That’s what I’m doing the research to see. I’m not going to come out and say it’s there until I’m comfortable that we can actually see it.
Q: How do you respond to those who argue that Hawaii could comply with the ACA without the Connector now, rather than waiting for the official 2017 start for waivers?
A: Well, there’s a difference between compliance with the law and facilitating the tax benefits for our citizens. A small business, fewer than 50 employees, has the potential (under ACA) to get up to half its premiums paid by the federal government for up to two years.
So if we were not to participate at all, then — I’m not a lawyer, but it’s pretty clear that that tax benefit would be at risk. And the same is true for individuals. The individuals could get up to
90 percent of their premiums paid, in the form of a tax subsidy.
Q: So, without the Connector, would we lose all those advantages?
A: Well, is it worth the risk? We’ve got the Connector built … so why would you walk away from this kind of an investment and risk losing those benefits? That doesn’t make sense to me. I can’t tell you one way or another which way the courts would find.
Q: But does that mean a big chunk of the state budget would be needed to sustain the Connector?
A: A big chunk? Compared to the amount of money we are now spending to support, for an example, the people who have migrated to Hawaii? The Supreme Court just ruled that they are ineligible for Medicaid.
So that burden is likely to fall to us, consumers and taxpayers. Those are thousands of people whose medical needs will have to be met by the community in one form or another.
Otherwise, the federal government will subsidize more than 90 percent of their needs (through the Connector).
That one group of individuals alone would cost way more than any deficit we’re running in the Connector. Not to mention all the tax benefits.
Q: You’re talking about the Micronesian migrants?
A: Sure. But it’s not just the Micronesians who come here; it’s any lawful resident who is entitled to medical benefits here. If they qualify for subsidy under the federal plan, then the federal government is helping cover their medical cost, instead of the community.
Remember, the Affordable Care Act carries with it the opportunity to provide for a lower level of insurance than the Hawaii Prepaid Health Care Act does. And so if we lose the benefits of the Hawaii Prepaid Health Care Act, we’re going to lose a lot of money that is now flowing into the medical establishment to cover the cost of medical care for people who can least afford
it. …
As far as I know today, we cannot apply for the exemption until 2017. If there is no commitment to help the Connector survive at least through the time that the exemption is considered, then we will have thrown the baby out with the bath water. …
Q: But if we got the waiver, wouldn’t we still have the benefits of the state law, the Hawaii Prepaid Health Care Act?
A: Not if somebody sues to invalidate it. Somebody could easily do that. I’m not going to say whether they’d win or lose; I don’t know.
Q: Why would they sue?
A: Why wouldn’t they? If you ran a small business here and you were suddenly no longer able to get your tax benefits, which is why the federal government wisely included a provision for two years’ worth of tax subsidies, why wouldn’t you say, “I want to cut my costs”?
Q: How do you answer the criticism that health care requirements drive businesses to cut employees?
A: The Hawaiian economy has one of the lowest unemployment rates in the country. So, if the Prepaid Health Care Act were responsible for causing unemployment, I would think our unemployment rate would have gone up.
