Hawaii Health Connector is Hawaii's Obamacare exchange
Hawaii Health Connector sign ups still under one percent of Hawaii’s population.

BY MALIA ZIMMERMAN – HONOLULU — The Hawaii Republican Party has turned down a plea from the Hawaii Health Connector to use party leadership and legislators to recruit for the exchange.

In a Dec. 27 email to Kayla Berube, executive director of the Hawaii Republican PartyRia Baldevia of the health connector asked whether GOP leadership and lawmakers could help uninsured Hawaii residents secure coverage.

But in a scathing response, Berube said the Hawaii Republican Party is willing to promote policies that ensure people have better access to care and allows them to keep their plans and doctors, but the Affordable Care Act fails to do that.

Berube also noted a number of concerns about the connector’s performance.

The federal government allocated $204 million for the Hawaii exchange, including $53 million for its website, but the site has had a number of technical issues that have prevented people from getting insurance.

“The Hawaii Health Connector has received over $200 million in federal funding, which would seem like plenty of money to avoid the failures we have witnessed in the first three months. Where did that money go?” Berube asked.

The technical glitches were no surprise, Berube said, since the Hawaii Health Connector hired CGI Group over the objection of Senate President Donna Mercado Kim, who warned the connector that CGI botched upgrade of the Hawaii tax-collection system.

Kayla Berube, executive director, Hawaii Republican Party

“We believe Hawaii residents should be able to securely sign up through your website, but the National Review reported it is one of many state-run exchanges vulnerable to wi-fi attacks, allowing hackers to intercept personal information of those trying to obtain health insurance,” Berube said.

The news organization deemed Hawaii’s exchange the “nation’s worst.”

“It is quite embarrassing for Hawaii, a state which embraced the Affordable Care Act, to have ranked dead last in the nation in December as the worst state-based exchange,” Berube said.

Sanjeev Bhagowalia, the state’s IT director, told state representatives at a Dec. 12 hearing the website still has a number of glitches, and he is worried it’s not secure enough to keep “very sophisticated foes” — hackers — from obtaining confidential information from the site.

“This is a very serious area and we are not prepared,” Bhagowalia said.

Low enrollment, the cost for each successful sign up and rising rates are issues, too.

Hawaii Health Connector Interim Director Tom Matsuda, who took over Dec. 9, said a total of 2,034 people who have enrolled in a health plan and 296 businesses have applied for a health plan through the Hawaii Health Connector as of Dec. 25.

But Berube said that still breaks down to about $100,000 spent per person and small business that successfully signed up.

The law’s mandates are already driving up premiums, Berube said, including premiums with Kaiser and HMSA, Hawaii’s two primary insurance providers, which will increase as much as 9.2 percent on thousands of individual and small businesses.

In addition, the Hawaii Health Connector still isn’t effectively connected to the state’s Medicaid system, which means low-income applicants are stuck in limbo, Berube said.

THUMBS UP? This photo on the Hawaii Health Connector’ web site maintains the public is enthusiastic about Obamacare, but the Hawaii GOP is less than enthusiastic about the exchange’s track record

Meanwhile, Hawaii’s Democrat lawmakers are criticizing the exchange.

Rep. Justin Woodson, D-Maui, pressed state Insurance Commissioner Gordon Ito at the Dec. 12 hearing when he admitted the exchange would not lower health insurance rates in Hawaii. Ito told lawmakers the insurance plans obtained through the exchange would probably increase 8 percent to 10 percent per year, in part because of the fees assessed on insurance companies to fund the exchange.

Gov. Neil Abercrombie and the Hawaii Health Connector’s board and administration assumed at least 100,000 people — all of the state’s uninsured — would sign up for health insurance over the next two years. Initial financial plans for the connector were based on 300,000 people — or 24 percent of the state’s population — buying health insurance. But that prediction falls far short.

State officials told lawmakers the Hawaii Health Connector isn’t financially sustainable and, because of that, should be converted from an independent nonprofit to a state agency.

Bhagowalia told lawmakers they should consider allowing the state to take over the private nonprofit exchange because 3,000 to 4,000 people signing up through the exchange — out of a potential 1.4 million — is “not a good outlook for us,” and is a business model that won’t survive.

Pat McManahan, the state’s human services director, as well as representatives from Kaiser and HMSA health insurance, agreed.

Once the $204 million runs out the exchange will be expected to fund its $10 million to $14 million in annual operations through fees on local insurance companies. The fees, now at 2 percent, are generated through a percentage of sales made through the exchange.