Hawaii lawmakers are trying to salvage the state’s Obamacare exchange with a fee only on insurers that chose not to participate in the insurance marketplace.
The state-run exchange, Hawaii Health Connector, has faced some of the worst financial issues of any state. Despite receiving $205 million in federal grants to start the exchange, Hawaii is expected to run out of those funds by the end of this year.
“This is not something we want to do,” said Democratic state Rep. Angus McKelvey, chairman of the Hawaii House Consumer Protection and Commerce Committee. “It’s federally mandated that we have to have our exchanges be sustainable.”
The fee is included in a bill containing several proposals to fix the flailing exchange, which passed the Hawaii House of Representatives Monday and will be considered by the state Senate. Other initiatives include a legislative oversight committee to review the exchange’s finances.
While Hawaii’s case may be more pressing than others, many state-run exchanges are having trouble developing a plan to make their marketplace sustainable once the hefty federal grant money runs out. But states from California to Minnesota have proposed hiking fees on insurance policies sold on state exchanges to finance their operations — not insurers that explicitly turned down the chance to take part in the risky Obamacare adventure.
Fees per policy may be a viable solution for large states like California, which points to 828,000 residents that have selected (but not purchased) Obamacare plans so far. But Hawaii’s looming costs and few enrollees have earned it national ridicule for its outrageous cost-per-sign-up, which currently sits at $56,819 in taxpayer spending for just one person who’s filled out an application.
Hawaii would need to charge exorbitant fees to the 3,614 people that have selected a plan so far in order to meet the shortfall — and instead the insurance companies that steered clear of the exchange, and likely their customers, will be the ones facing the fees.
While the bill establishing the fee has passed the House, it’s just one of several House-originated proposals to fix the exchange, and the Senate has come up with its own as well. McKelvey said that eventually, bills from both chambers of the state legislature will be hashed out in conference committee, the Sacramento Bee reports.
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