Gov. David Ige has decided to accelerate the shutdown of the Hawaii Health Connector because the state-based exchange that is assigned to enroll residents in Obamacare has run out of cash to continue outreach efforts.
"The Connector’s ongoing financial challenges have forced the state to accelerate the transition, beginning Dec. 1," Ige said in a news release Friday. "The governor and state cabinet officials, in consultation with Connector leadership, agreed that this transition was in the best interest of Hawaii residents because the state has already transitioned to the federal marketplace — healthcare.gov — for enrollment of individuals during this current open enrollment."
The Connector is a nonprofit organization established by the state Legislature to manage the federal Affordable Care Act in Hawaii. The state was supposed to take over Connector operations in February, after the end of the open-enrollment period. Open enrollment began Nov. 1 and concludes Jan. 31.
About 22 full-time Connector employees will be laid off in December. A few employees will remain to complete the financial accounting for the troubled nonprofit. Another 20 temporary outreach workers also will lose their jobs.
Earlier this year the U.S. Department of Health and Human Services, which oversees health insurance exchanges, determined that Hawaii was not in compliance with the provisions of the Affordable Care Act, also known as Obamacare, including the provision to be financially self-sustaining as of Jan. 1, 2015.
The state is moving Obamacare enrollments to the federal healthcare.gov site, though the transition has been difficult thus far and no enrollment numbers have been disclosed.
The state is walking away from millions invested in the Connector and permanently moving the insurance exchange to the federal Obamacare program.
Ige’s administration decided to abandon the troubled Connector, which has struggled since its launch in October 2013 to meet enrollment targets, provide satisfactory service and raise enough money to be self-sustaining. The Connector has burned through $130 million of $204 million in federal money granted to the state to build the exchange but not to fund ongoing operations.
Earlier this year Ige acknowledged that Hawaii is out of compliance with the Affordable Care Act because the Connector wasn’t financially sustainable as of Jan. 1 and didn’t integrate its technology with the state’s Medicaid insurance program for low-income residents, as required by the health care law. The feds threatened to withhold $1 billion in Medicaid funds if the state did not transition to healthcare.gov.
"Due to Hawaii’s long history of health care coverage through the Prepaid Health Care Act of 1974, the rate of uninsured individuals has been amongst the lowest in the nation. The Connector was established to reach out to uninsured Hawaii residents who were not covered under the Prepaid Health Care Act or government health insurance programs such as Medicaid and Medicare. We believe we were successful in reaching many of these previously uninsured individuals. Hawaii residents will still be able to continue to access affordable health care coverage through healthcare.gov," said Jeff Kissel, executive director, Hawaii Health Connector.
Connector officials said there are roughly 40,000 Hawaii residents covered under Affordable Care Act plans who must re-enroll through healthcare.gov or lose their coverage Jan 1.
The state is urging individuals with Obamacare to re-enroll by Dec. 15 to ensure there is no lapse in their coverage.
