GAO to investigate Hawaii’s Obamacare exchange


Obamacare exchange computer

HONOLULU – The U.S. Government Accountability Office said Wednesday it will investigate Hawaii Health Connector’s spending of its $204 million federal grant.

Senate Minority Leader Sam Slom filed a complaint March 27, asking for the investigation.

Sen. Sam Slom, minority leader (photo by Mel Ah Ching)
NO TRANSPARENCY: Hawaii Senate Minority Leader Sam Slom filed the complaint with the U.S. GAO which will be investigated

He was the only one of 76 legislators to vote against the establishment of the state Obamacare exchange.

Slom pointed out Hawaii has the lowest exchange enrollment rate in the country — around 8,000 people — despite the $204 million grant, yet the Connector’s interim director Tom Matsuda is lobbying lawmakers for another $4.7 million in state funds for fiscal year 2015 to maintain its operations.

The exchange is supposed to be self sufficient by the end of 2014, but since enrollment is so low, the 2 percent tax on every transaction doesn’t cover the exchange’s operational costs, Matsuda told lawmakers. The exchange expected at least 50,000 people to enroll.

A sizable portion of the $204 million grant is going to CGI Corp., which received a $74 million contract to develop and maintain the Connector website.

However, the site has experienced a number of technical problems and delays. Because of similar problems, Slom noted the federal government and other states that had contracts with CGI Corp. cut ties with the vendor.

TROUBLED: Hawaii Health Connector Director Tom Matsuda testifiesThursday before Congress on Hawaii's problem-filled Obamacare exchange
TROUBLED: Hawaii Health Connector Director Tom Matsuda testifiesThursday before Congress on Hawaii’s problem-filled Obamacare exchange

One of the major problems is the Connector isn’t integrated with the Medicaid system, even though Hawaii’s enrollment process requires consumers to be screened for Medicaid eligibility before seeking coverage, Slom said.

Lawmakers and media have complained about a lack of transparency by the Connector, an independent nonprofit agency set up by the Legislature to run the exchange. The lack of transparency is one of the main reasons Slom asked for the federal investigation.

“The Connector is operated by the state as a nonprofit organization, and governed by a board of directors, so it has been nearly impossible for legislators or the general public to get any specific information regarding the Hawaii Health Connector’s budget and expenditures,” Slom said, adding requests for details have been either denied or ignored.

Slom wants the GAO to investigate:

  • How the $204 million Hawaii received in ACA grants has been spent.
  • Whether the payment of a large portion of the federal grant to CGI Corp. for a product that continually fails to fulfill the requirements for a state health exchange website can be considered an abuse of federal funds.
  • Why the Connector has failed to publicly disclose all copies of Hawaii’s grant applications related to the establishment of the exchanges.
  • Why the Connector has failed to publicly disclose Hawaii’s contingency plan, which was due Jan. 15, 2013, and was required by the Centers for Medicare & Medicaid Services.
  • What additional costs were incurred because of the failure to plan for the integration of Hawaii’s Medicaid system into the Hawaii Health Connector and CGI Corp.’s failure to anticipate or incorporate this issue into HHC’s exchange website.

Slom said taxpayers and legislators should be outraged by the Connector’s lack of planning and money management.

CUT US OUT: U.S. Rep Colleen Hanabusa, D-Hawaii, says Hawaii should be exempt from ACA requirements.
CUT US OUT: U.S. Rep Colleen Hanabusa, D-Hawaii, says Hawaii should be exempt from ACA requirements.

“This is not a partisan issue, this is an economic issue,” Slom said.

While none of Hawaii’s four members of Congress, all Democrats, joined Slom, a Republican, in asking the GAO for the investigation, U.S. Rep. Colleen Hanabusa did voice concerns earlier this month about the exchange’s spending and management at a congressional hearing.

Six state health exchange directors, including the director of Hawaii’s Obamacare exchange, were grilled by multiple U.S. House committees trying to determine why the websites aren’t working properly.

The committees are looking into how the six states with troubled Obamacare exchanges spent hundreds of millions of dollars in federal grants, yet still have low enrollment and glitch-filled websites.

U.S. Rep. Colleen Hanabusa, D-Hawaii, said at the hearing residents of her state are “frustrated and embarrassed” because of the low enrollment in the Obamacare exchange, and “very concerned” about how the $204 million federal Affordable Care Act grant has been allocated and spent.

 Reach Malia Zimmerman at




  1. It's about time SOMEONE investigated the corruption in Hawaii. With any luck they will 'nail' some of our less honorable legislators to the wall.. Sadly this is just one small corner of what we all know is a corrupt legislature that has been ruling Hawaii for over 50 years. It will be interesting to see the smokescreen that is put into place to protect the guilty. After all, it's only $200,000,000 – a drop in the bucket compared with the hundreds of millions 'misplaced' or 're-directed' in Hawaii for the past half century..

  2. […] After spending $204 million in federal grants on a health care exchange that doesn’t work as required, Hawaii’s Health Connector is going to be investigated by the GAO, at the request of a Republican, State Senate Minority Leader Sam Slom. So far, only 8,000 people have managed to sign up on the site, working out to over $25,000 per enrollment. Even worse, the site does not perform an essential function. The Hawaii Reporter: […]

  3. P.S. as I recall – U.S. Rep. Colleen Hanabusa was one of our legislators (they ALL did) that sold her vote to help pass Obamacare. It seems she didn't make us a very good deal after all.. Feel free to correct me if i'm wrong…

    • Jennifer Hyland Wang argued in a Cinema Journal article that Curran's death (in Forrest Gump) to an unnamed virus "…symbolizes the death of liberal America…"
      Guess liberalism lives under a different label…..Hanabusa.

  4. I've been trying since last November to get insurance through the exchange for our 62 year old employee to no avail. HHC says we've done it all and they've approved us, but they have yet to send it to HMSA. HMSA says they can't do anything until HHC sends them the application for insurance. This is the worst kind of Catch 22. And this system cost how much? This is a perfect example of how government screws up everything!

  5. GAO is NOT going to investigate Hawaii. At least not at this point. Sen. Slom and Hawaii Reporter jumped the gun on this one.

    • Hope GAO investigates it cause us taxpayers will be funding it next year!
      Lawmakers consider giving $3.5M to Hawaii exchange
      Rep. Angus McKelvey said Friday that lawmakers are figuring out how much money to give the Hawaii Health Connector as they nail down final details on a bill addressing the exchange.
      Read more:

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