Hawaii Medical Service Association, which no longer sells small-business plans on the Hawaii Health Connector, is opposing a bill that would require insurers with 20 percent market share to offer Obamacare policies on the state’s health insurance exchange.

“Only HMSA has 20 percent market share in the small-group market so really again you’re just targeting HMSA,” HMSA lobbyist Jennifer Diesman told lawmakers at a hearing called Wednesday by the House Health Committee. “We communicated repeatedly the continued difficulties working with the Connector. We do not believe there is value for small businesses.”

In a major blow to the Connector, HMSA announced in August it would stop selling policies on the small-business side of the exchange, leaving Kaiser Permanente Hawaii the sole health plan choice for employers. HMSA still sells individual plans on the exchange.

“It would place us in a competitive disadvantage with other issuers who are not subject to the 20 percent market share threshold and are able to offer health insurance coverage without being encumbered by the administrative, technical and financial burdens of participating in the (Small Business Health Options Program).”

Through House Bill 726 and Senate Bill 745, lawmakers are attempting to increase competition on Connector, the online marketplace created by the Affordable Care Act to provide Obamacare health plans in Hawaii.

House Health Committee chairwoman Della Au Belatti (D, Moiliili, Makiki, Tantalus) said lawmakers are trying to have parity with the federally-run exchanges, which require insurers selling individual policies on the exchange to also offer small-business plans. 

“(The bill) may well target HMSA but that’s the reality,” Belatti said.

HMSA believes there would be more efficiencies in a federally-run exchange than there is in the state-based online marketplace, but “that’s not where we are today,” Diesman told lawmakers. 

Jeff Kissel, the Connector’s executive director, testified that a majority of states have adopted similar provisions mandating insurers’ participation on the exchange.

“The effect is to give all business equal access to Hawaii’s major insurance providers,” he said.

HMSA also objected to a separate proposal, House Bill 727, which would require any health plan offered through the Connector to be at least a gold-level plan, the highest priced and richest in benefits of the four “metal” plans sold on the exchange (platinum, gold, silver and bronze). 

Diesman said the bill could jeopardize the affordability of Connector plans because it would preclude subsidies on the individual exchange since there would be no second-lowest silver plan on which to base federal tax credits. Individuals and small businesses can apply for subsidies and tax credits if they purchase policies on the exchange.