Gov. David Ige is urging Hawaii lawmakers to appropriate $9.4 million to fund the state’s troubled health insurance exchange.
The governor sent a letter to Senate President Ronald Kouchi and House Speaker Joseph Souki requesting “immediate consideration and passage” of four bills, including one for an emergency appropriation to reimburse the state for the money it spent when it was forced to take over Obamacare enrollments.
“The Department of Labor and Industrial Relations and the Department of Human Services have incurred unanticipated expenses due to the sudden closure of the (Connector).”
David Ige
The governor said departments involved were required to execute certain functions to maintain ACA compliance
The nonprofit Hawaii Health Connector assigned to enroll residents in Obamacare under the federal Affordable Care Act abruptly shut down in the middle of open enrollment Dec. 4 when it ran out of cash. The state was left scrambling to pick up the pieces and continue outreach efforts.
“The urgency is we don’t have an operational exchange even though the government is doing these functions, so we have to designate the government as the exchange so we can get federal and state funds,” said Laurel Johnston, Ige’s deputy chief of staff. “We’re trying to get them (the federal government) to release some grant funds to support some of the open enrollment services we already did. (The feds are) now saying they are having a hard time releasing the money to us because we’re technically not the exchange.”
The state is requesting $7 million from the federal government to cover transition costs and other expenses. It is asking for another $9.4 million from the Legislature.
The first measure, Senate Bill 2383, repeals the Connector as the state’s health insurance exchange, while Senate Bill 2894 gives that designation to the Department of Labor and Industrial Relations and requests $4 million for operations and staff.
A third measure, House Bill 2478, provides authority to the state, through the governor, to negotiate waivers from provisions of the ACA that could potentially invalidate Hawaii’s Prepaid Health Care Act of 1974, which requires employer-based insurance coverage for the bulk of Hawaii residents. The state law is responsible for keeping the uninsured rate at 10 percent or less for more than 40 years, Ige said in the letter.
Senate Bill 2898 requests another $5.4 million emergency appropriation to reimburse the state for expenses incurred for open enrollment and other ACA-related costs due to the Connector’s abrupt closure.
“The Department of Labor and Industrial Relations and the Department of Human Services have incurred unanticipated expenses due to the sudden closure of the (Connector),” Ige said. “These departments were required to execute certain functions as part of the state of Hawaii’s Corrective Action Plan required by the Center for Medicare and Medicaid Services to maintain compliance with the ACA.”
Preliminary reports indicate that 14,690 individuals in Hawaii were enrolled in Affordable Care Act health insurance plans this year, he added.
The Connector struggled since its launch in October 2013 to meet enrollment targets, provide satisfactory service and raise enough money to be self-sustaining. The Connector burned through $130 million of $204 million in federal money granted to the state to build the exchange but not to fund ongoing operations.
Last year Ige acknowledged that Hawaii was out of compliance with the ACA and was at risk of losing $1 billion in Medicaid funds if Washington does not accept the state’s plan to remedy the ailing Connector. The state moved Obamacare enrollments to the federal healthcare.gov site for 2016 enrollments.
