Hawaii Senate

BY JIM DOOLEY – As protestors demonstrated at the federal building against the Affordable Care Act, state legislators wrestled with Hawaii’s plans to implement the law, which mandates universal health insurance coverage for all Americans.

Hawaii Senate

Today is the second anniversary of passage of the law, formally known as the Patient Protection and Affordable Care Act, and informally known to its critics as “Obamacare.”

In the state Senate, community groups including the AARP continued to voice opposition to a perceived lack of consumer representation and to conflicts of interest on the board of a non-profit company that is implementing the Affordable Care Act here.

The non-profit must establish an online marketplace, called the Hawaii Health Connector, where uninsured individuals and small businesses will be required to buy health coverage by the beginning of 2014.

Under current law, four representatives of the state’s largest health or dental insurance companies are on the non-profit’s interim board of directors and the governor has nominated three of them to carry over to the permanent board.

Numerous opponents say the insurance company employees are in a conflict of interest and should only serve the board in a non-voting, advisory capacity.

A state House committee has incorporated that recommendation, as well as other fundamental changes to the Health Connector, in another bill.

Today, the governor’s nominees appeared before the Senate Commerce and Consumer Protection Committee and assured senators that they are sensitive to the appearance of conflicts and want to serve the best interests of consumers.

“We’re not a regulatory board that is making rules…but anywhere there is a conflict, I will recuse myself,” said Kaiser Permanente executive Joan Daniely.

Larry Geller, head of Kokua Council, spoke against Daniely and other insurance executives.

“This connector is exceedingly important to us because the people without insurance policies will be purchasing insurance based upon what this group sets up. Its an incredible responsibility.”

“There is a natural tension between any insurer and consumer groups,” he said. “It’s just the way things are. The insurer wants one thing, the consumer wants another.”

Barbara Kim Stanton, director of the American Association of Retired Persons in Hawaii, said, “It is an untenable situation at the Connector board.”

Communicating with the interim board has been very difficult to date, she said.

“There really is no ability to make meaningful comment or to participate. The consumers have really been shut out. Its plain and simple,” she said.

Jennifer Diesman, an executive and lobbyist with Hawaii Medical Service Association, said she feels “comfortable” serving on the board and working for HMSA.

The state insurance commissioner “retains the regulatory authority” over health insurance providers and the rates they charge consumers, Diesman said.

When opponents of the insurance-connected nominees tried testifying about possible changes to the make-up of the Health Connector board, committee chair Sen. Roz Baker, D-5th Dist. (South and West Maui) repeatedly said that only the governor’s nominations were on the agenda.

At the close of the hearing, the committee voted to affirm all the nominees.

Sen. Sam Slom, R-8th Dist. (Hawaii Kai) cast the only no vote. He said he felt the committee should have deferred its decision until other possible changes to the Connector board are acted upon by lawmakers.

He praised the character and qualifications of the nominees, but said they are being asked to serve on a board “that many of us believe should be amended and changed.”

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Jim Dooley joined the Hawaii Reporter staff as an investigative reporter in October 2010. Before that, he has worked as a print and television reporter in Hawaii since 1973, beginning as a wire service reporter with United Press International. He joined Honolulu Advertiser in 1974, working as general assignment and City Hall reporter until 1978. In 1978, he moved to full-time investigative reporting in for The Advertiser; he joined KITV news in 1996 as investigative reporter. Jim returned to Advertiser 2001, working as investigative reporter and court reporter until 2010. Reach him at Jim@hawaiireporter.com