New fees for exchange

When a gun is pointed at your head, it is only natural to want to get the barrel aimed in some other direction.

The state Legislature is tasked with the almost impossible chore of making the Hawaii Health Connector self-sustaining. As we detailed in this space last week, with current fees Hawaii’s health exchange is at least 150,000 participants shy of being able to generate the $15 million a year it needs to be sustainable.

A bill making its way through the Legislature would put new fees on insurance companies that are not participating in the Connector to help shore it up. Currently, only Kaiser-Permanente and Hawaii Medical Services Association participate with plans available through the Connector.

Now, on the surface the new fees may sound like a decent solution. The only problem, of course, is that the companies are not going to eat those fees – they are going to pass them on to their plan participants in the form of higher premiums.

It is reasonable to assume the insurers other than Kaiser and HMSA chose not to participate in our health care exchange for fear that it would turn out to be the expensive fiasco it has quickly become.

Too bad – we’re all in this leaky boat together.

The Legislature is not to blame, either. It has few options to shore up the exchange. One could forcefully argue that Hawaii’s decades-old Prepaid Healthcare Act made the exchange unnecessary here. A tweak or two might have provided insurance for the 4,500 or so who have signed up for insurance through the Connector.

“This is not something we want to do,” The Associated Press quoted Rep. Angus McKelvey, chairman of the House Consumer Protection and Commerce Committee, as saying. “It’s federally mandated that we have to have our exchanges be sustainable.”

The Connector was established with $205 million in federal grants. It must use all that money by Dec. 31 or lose any remaining funds. That will leave it out in the cold in 2015 and beyond without additional fees.

* Editorials reflect the opinion of the publisher.