Sustaining the unsustainable

The state Legislature is now considering how to make sure the Hawaii Health Care Connector keeps running.

It acts as Hawaii’s health care exchange as mandated by the federal Affordable Care Act.

The Connector was established with some $204 million in federal grants, but there are estimates that it will not have the $15 million in operating funds needed to keep it running next year.

The federal grants expire on Dec. 31, so all that money must be spent this year or be lost.

An Associated Press story quoted interim Executive Director Tom Matsuda as saying the Connector will not break even because so few people have used it. About 4,500 people have taken out plans through the exchange.

“Our projections, using the best available data, and looking at a dozen variables that affect future enrollment, mean that we’re not even close to breaking even,” Matsuda testified to state legislators. “Even with substantial reductions to the estimated $15 million annual operating budget, we will not be sustainable.”

The Star-Advertiser reported that to generate $15 million in fees the Connector would need between 152,000 and 184,000 enrollees. The Connector is expected to only generate fees of around $1 million in 2014.

Matsuda said the state’s Prepaid Healthcare Act has complicated driving up enrollment because most citizens already have health insurance. The interim director said even if an extension of the use of the federal grants could be made through 2015, it would simply delay the unsustainability of the Connector until 2016.

The Legislature has a bill before it (HB 2529) that would bring the Connector directly under state control. The AP story said many legislators are afraid of this option because they do not want to dump the Connector’s liabilities on the state.

Other possibilities include simply increasing fees on all health insurance policies in the state to shore up the Connector.

The issue is complex – and the answer is going to be expensive. The demand for the Connector simply doesn’t exist in Hawaii.

* Editorials reflect the opinion of the publisher.