It’s looking less likely that the Hawai‘i Health Connector, the state’s health insurance exchange, will be able to pay for itself.

The Connector must enroll between 160,000 and 200,000 residents in medical coverage to raise $15 million in annual revenue, the amount needed to sustain operations once federal grants dry up.

Connector board member Jennifer Diesman, an executive with Hawaii Medical Service Association, disclosed the figures Wednesday to lawmakers based on a 2 percent fee charged on health plans with an average premium of $250. Individual enrollments since the Connector opened for business two weeks late on Oct. 15 totaled 3,347 as of Jan. 25.

Lawmakers are grappling with how to boost enrollment and revenue for the Connector before $204.3 million in federal funds expire at year’s end. One main option discussed at the hearing of bills to improve the problem-plagued online marketplace is turning the nonprofit, created in 2011, into a state agency.

"The state may be faced with no alternative other than to bail out the Connector," said AARP lobbyist Steve Tam, who testified against the proposal to administratively attach the Connector to the Department of Commerce and Consumer Affairs.

On Wednesday, House Health Committee leaders started the first of a series of hearings on how to restructure the Connector, designed to match low-income residents with subsidized health plans under President Barack Obama’s Affordable Care Act.

"The bill was put together by staff looking at other bills from other states as to how they set up the Connector," said House Health Committee chairwoman Della Au Belatti (D, Moiliili-Makiki- Tantalus). "This is not pulled out of thin air."

Connector officials still haven’t come up with a plan to sustain operations without the federal funds. Tom Matsuda, the Connector’s interim executive director, said the organization hopes to release a financial plan by late March or early April.

"We all recognize that is maybe too slow and we’re trying to accelerate the process," he said, after Belatti pressed him on when a sustainability report would be available.

Part of the sustainability plan is to reduce long-term operating expenses by integrating technology functions with the state Department of Human Services Medicaid eligibility system, Matsuda said. Consumers seeking tax credits offered on the Connector must first be deemed ineligible for Medicaid, the government insurance program for low-income people.

"We now have a very high-expense structure," he said. "We’re looking at this integration and whether it’s feasible both technically and in terms of the business side of it."

Matsuda earlier told lawmakers that the Connector has spent $49.2 million and obligated $44.2 million in contracts not yet paid. Roughly $110.9 million in unobligated funds must be used this year or the state forfeits the federal grants.

Connector officials also are looking into the possibility of extending the deadline for using the federal dollars into 2015 and are banking on the possibility of large employers coming through the Connector system in 2017, he said.

Increasing revenue "frankly is more difficult," Matsuda told lawmakers, adding that the 2 percent fee based on the current volume of enrollments is "not sufficient."

"That’s a major reason obviously that we’re trying to increase enrollment," he said. "If we’re going to be sustainable, we have to have other sources of revenue."

Lawmakers also deliberated bills to remove insurance company executives from the Connector board and extend the 2 percent fee to insurers selling plans off the Connector to generate additional revenue.

"We really don’t want Hawaii residents left holding the bag, essentially bailing out the Connector when federal funds are no longer available," AARP’s Tam said. "The fee assessed on insurers will then be passed on to consumers by way of higher premiums."