Thousands of Hawaii residents covered under Obamacare may become uninsured on Jan. 1.
That’s because the Hawaii Health Connector is closing, and all Obamacare customers must re-enroll through the federal marketplace at healthcare.gov by Dec. 15 to avoid losing their coverage on Jan. 1.
With only two weeks left to sign up, fewer than 4,500 of the nearly 40,000 Hawaii residents covered under the Affordable Care Act have re-enrolled.
The Centers for Medicare &Medicaid Services, the U.S. agency in charge of Obamacare, said Wednesday that 4,450 people in Hawaii signed up for coverage during the first month of open enrollment in November.
“Americans who need health coverage starting Jan. 1 have just two weeks remaining before the Dec. 15 enrollment deadline,” said Sylvia Burwell, secretary of the U.S. Department of Health and Human Services, in a news release Wednesday. “Now is the time to visit healthcare.gov.”
Hawaii switched from a state-based marketplace to the federal exchange for this year’s open enrollment period that began Nov. 1 and ends on Jan. 31. But the transition has been rocky.
The Hawaii Health Connector, the nonprofit created to enroll residents in Obamacare, is ceasing operations Friday after failing to raise enough money to be self-sustaining. The state will be responsible for outreach and enrollment via healthcare.gov.
If a large number of people become uninsured at the start of the year, that would burden providers — including hospitals and clinics — and more people could face penalties under the federal health care law.
“This is definitely a negative thing. The gap resulting from this change in the marketplace will result in a large amount of people losing health insurance,” said Jing Ai, associate professor at the University of Hawaii Shidler College of Business. “With these people not having insurance coverage, should there be a medical emergency, the (health care) system is going to be potentially subject to a large financial impact, which could get passed down to essentially everybody. Someone has to pay the bill.”
There is also a tax penalty Hawaii residents could face if they do not have health insurance in 2016. The penalty, which is added to one’s federal income tax, is
$695 per adult, $347.50 per child under 18 years old (with a maximum of $2,085) or 2.5 percent of household income, whichever is greater.
Connector Executive Director Jeff Kissel, who is leaving the post Friday, warned earlier this month that at least 30,000 local residents were at risk of losing coverage at year’s end due to significant wait times in signing up on the federal exchange.
Ai said, “One of the purposes of health care reform was to try to get people insured so they don’t have to resort to emergency care, which would pretty much be their only option if they’re uninsured and cannot pay the bills. Having this gap … would kind of send us back to where we were before.”
Gov. David Ige’s administration decided to abandon the troubled Connector, which has struggled to meet enrollment targets since its launch in October 2013. The nonprofit spent $130 million of $204 million in federal money granted to the state to build the exchange.
Earlier this year, the U.S. Department of Health and Human Services determined that Hawaii was not in compliance with the provisions of the Affordable Care Act, which included having the money to fund ongoing operations.
