HMSA CEO: Shut down Hawaii health exchange

Published On: May 09 2014 11:17:44 AM HST   Updated On: May 09 2014 05:21:21 PM HST
HMSA building

The chief executive of Hawaii's largest health insurance company is calling on Hawaii to shut down its beleaguered health insurance exchange.

Michael Gold, president and CEO of Hawaii Medical Services Association, says the state shouldn't keep spending money on a system that is financially unsustainable and does not work.

Gold says Hawaii should ask the federal government for an exception, or waiver, to the part of the Affordable Care Act that requires states to run their own insurance exchanges.

He proposes that businesses buy insurance plans directly from the insurance companies.  Individuals would do the same, buying directly through insurers, or the federal government could take over that part of the exchange.

The Hawaii Health Connector was awarded about $200 million in federal funds and enrolled about 9,200 people in six months.  HMSA is one of two insurers, along with Kaiser Permanente Hawaii, participating in the health insurance exchange.

State lawmakers say they're baffled by the recent remarks by Gold.

"“Our legislative session concluded not less than 10 days ago and it is very disappointing to see today’s reports from HMSA calling for the shutting down of the Hawaii Health Connector," said Rep. Della Au Belatti, chair of the House Health Committee.  "During the long and arduous legislative session, state lawmakers were extensively briefed by all stakeholders on the Health Connector, including the Governor's department heads, the Attorney General, and HMSA on how to restructure, reform and right-size the Connector."

"It is very disingenuous, disheartening, and disappointing to learn that the CEO of HMSA is now calling for the dismantling, shutting down and federalization of the Health Connector," said Au Belatti.

"First of all, the assertion that these waivers exist and that the Legislature did not pursue them is simply not true," said Rep. Angus McKelvey. "On Feb. 4 we wrote to our congressional delegation asking for the very same waiver that Mr. Gold alluded to, and we were told in no uncertain terms that we would not be able to secure them.  We also drafted a House resolution asking for a waiver and were told again that we could not."

"Through the legislative process, we learned that the only way we could secure a federal waiver was through the innovation waiver process, which is why we passed House Bill 2581 that will set up a task force to develop a plan to seek the waiver," said McKelvey.

Gold released the following statement Friday afternoon:

"Hawaii’s situation is unique. Thanks to our current insurance laws, which have been in place for more than 40 years, all Hawaii companies must provide health insurance for employees who work more than 20 hours a week. The cost to keep the Hawaii Health Connector open, as a place for businesses to buy health insurance, far outweighs the benefits."

"Hawaii can save significantly by having businesses go directly to health insurers. HMSA is set up to meet that demand. Efficiently and economically. Spending millions of dollars for the Hawai'i Health Connector to act as a middleman for the business market doesn’t make financial sense."

"We need the governor to seek a waiver from the federal government this year. Hawaii can make an excellent case why it doesn’t need the Shop (the online health plan marketplace for businesses). If we wait until 2017, when the Affordable Care Act says states can apply for waivers, millions more will have been spent unnecessarily."

"There are benefits to having an online marketplace for individuals because of the tax subsidy.  If not the Hawaii Health Connector, then the federal exchange. The amount of individuals who signed up for a health plan through the Connector justifies the individual marketplace. The same can’t be said for the business side."

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