CEO of HMSA: Hawaii needs to seek waiver from state connector

The Hawai’i Health Connector has been a costly mistake, and the state government should immediately seek a waiver from the federal Affordable Care Act’s requirement for the state to have an online insurance exchange, said Michael Gold, president and chief executive officer of the Hawaii Medical Service Association.

“The Hawai’i Health Care Connector Exchange doesn’t fit Hawaii,” Gold said in an interview Wednesday at The Maui News. “We need to get out from under it. We need to go right now to the federal government and ask them for a waiver to get us out of the connector in Hawaii.”

Gold’s call for an immediate waiver would be years ahead of the Affordable Care Act’s provision allowing waivers beginning in 2017.

Seeking a waiver now is “the real key,” the HMSA chief said. “If we don’t do that, we’re going to keep adding expense, keep building up the expense side of this and someone is going to pay for it. And really, it’s going to be all of us.”

Gold said that if the health connector were to remain until 2017, it would likely become entrenched.

“I think it will never go away, and we will have wasted all that money,” he said.

The federal government provided $200 million to start Hawaii’s online health insurance exchange, which launched Oct. 1 but had only 9,217 individuals and families enrolled as of May 3. Officials have said at least 150,000 participants are needed to make the connector financially self-sustaining.

HMSA and Kaiser Permanente Hawaii are the only two health insurers participating in the health insurance exchange.

HMSA, a $2.5 billion business annually, is the state’s largest insurer, providing coverage for doctor visits, medical procedures, drugs and hospitalizations for nearly 65 percent of residents of the islands, or more than 700,000 people.

Hawaii has had its Prepaid Health Care Act since 1974, which paved the way for most people in the state to get their health insurance through their employers.

“We don’t need it,” Gold said of the health connector. “It’s just an extra layer. It’s just not necessary for Hawaii. We could handle everything in Hawaii in a much more economical way, meet all the objectives of the ACA and do it in a way that we don’t need the Hawai’i Health Connector.”

In March, Gov. Neil Abercrombie told The Maui News in a phone interview that his assessment of the health connector was that it was based on a model “that I don’t think really fits Hawaii” because most people are insured.

The governor said that if state lawmakers gave his administration the opportunity to do so, it would seek a waiver from the online connector.

Abercrombie said the state could partner with the private sector to insure the uninsured. It was clear the computer-based connector wasn’t helping to get health insurance for those who don’t have any.

“Well if that’s the object, then go where the uninsured are,” Abercrombie said. “Go to the community health clinics and sign people up. Go to Longs Drugs store when they have free flu shots and set up a card table and sign people up. Don’t rely on a computer-driven system, a website system for people who probably don’t have computers or are not computer literate, whose first response is not to go to a computer but to go to the emergency room.”

The number of uninsured in Hawaii is low, the governor said.

“We have thousands, not hundreds of thousands, several thousand people that we need to sign up,” he said. “I think that if the Legislature will give us the opportunity to make some adjustments, and/or to allow the already existing institutions in state government to move forward, that we can pretty much eliminate the uninsured portion of the population in fairly short order.”

Earlier this month, state lawmakers passed and sent to the governor House Bill 2581. If signed by the governor, the measure would set up a task force to seek a waiver for Hawaii from the Affordable Care Act. The bill’s timetable would have the task force submitting an initial interim report 20 days before the Legislature convenes next year, a second interim report a year later and a final report before the 2017 legislative session.

Gold said he doesn’t want to wait until 2017.

“We have to go to the federal government, and we have to make a case that we can fulfill all their aims of ACA without having this exchange, at a much lower cost and a much more efficient way, and we can make it work,” he said. “If the state of Hawaii could do that, then we’d have in a sense a fresh start in 2015.

“If we wait until 2017, they’re going to keep spending money to try to make this thing work,” Gold said.

Policymakers are asking the wrong question, he said.

“They’re asking the question: ‘How can we make the Hawai’i Health Connector sustainable?’ ” he said. “The question is: ‘How can we get out from under the Hawai’i Health Connector and still accomplish everything that needs to be accomplished?’ . . . And we can. We can make that argument. And I think it’s imperative that the state makes that argument to the feds.”

However, “it may not work,” Gold said. “They may say the waiver only comes in 2017. Wait until then. They may say that. But if we don’t try, we’re going to be stuck.”

A 2007 study looked at who is uninsured in Hawaii, he said, but that study needs to be updated.

“How many are really on the beach?” he asked. “How many people do not buy health insurance because they don’t need it and don’t want it?

“We need to find those pockets,” he said. “That needs to be done as a preliminary (step) before making this thing work, not mass advertising.”

The exchange’s website ( says its aim is to help people take advantage of available health insurance options and to find the best plan for an individual’s health and financial needs.

The exchange’s interim executive director, Tom Matsuda, said the connector “remains committed to helping every individual or small business who wants health insurance to be able to get it.”

The connector has staff available to help people compare health plans and “understand the very complex process,” he said.

* Brian Perry can be reached at