Hawaii's Obamacare Exchange is Going Under

At some point, we have to ask ourselves, “Is there an Obamacare exchange that isn’t an utter failure?” The latest news regarding the Hawaii Health Connector, Hawaii’s Obamacare exchange, might be the worst faced by any state-run exchange in the country. It’s more than just glitches in the system or being millions upon millions in debt. No, the Hawaii Health Connector is in danger of completely shutting down because the state’s legislators haven’t been able to agree on funding for it. From InsuranceNews.net:

“Now that it is clear that the state will not provide sufficient support for the Hawaii Health Connector’s operations through fiscal year 2016 (ending June 30, 2016), the Connector can no longer operate in a manner that would cause it to incur additional debts or other obligations for which it is unable to pay,” Connector officials said in a report released Friday to the nonprofit’s board of directors.

The plan, obtained by the Honolulu Star-Advertiser, states the Connector will cease new enrollments Friday, discontinue outreach services May 31 and transfer its technology to the state by Sept. 30. The Connector’s workforce will be completely eliminated by Feb. 28. The exchange has 32 employees, 29 temporary staff and 12 full-time contractors.

“Staff reductions will commence immediately, with the executive director ( Jeff Kissel) exiting once the bulk of operational activities end,” the report said. “If the state cannot facilitate an orderly transition, the Connector’s operations will abruptly end, as the Connector does not have the resources to continue operations.”

The legislature has until September 30th to work out a solution, but thus far, they haven’t found a workable solution. Relative to other states, Hawaii’s exchange isn’t in dire need of money. As the article notes, they have about $70 million of the $204.3 million given to it by the federal government. An article by Pacific Business News notes that the sum the legislature has balked over is the $10 million requested by the people running the Hawaii Health Connector run things. The lawmakers initially only considered $5.4 million, but they ended up appropriating just $2 million. I must admit that watching typically spend-happy Democrats make such a fuss over as paltry a sum as $10 million is in politics is strange. What’s amusing about this is that, per the Business News article, the exchange’s director Jeff Kissel called the action “an enormous vote of confidence” because apparently appropriating only one fifth of your initial requested amount signals that the agency can “look for other solutions in collaboration with [Hawaii governor David Ige’s] administration.”

In order for the Hawaii Health Connector to be financially viable, the government needs at least 70,000 people enrolled. Right now, they have barely half of that, as only 37,000 have signed up. As in so many other places, the predictions and requirements for the Hawaii Obamacare exchange have little connection to reality.

Making things worse, because of the exchange’s fiscal problems, the federal government now has the right, if it chooses, to cut off Medicaid funding for the state. That would affect 300,000 Hawaiians, which would create another fiasco as the state is forced to figure out how to cover them with the federal government’s share of the $2 billion no longer coming in.

Of course, I don’t mind watching the Hawaii Health Connector sink because of political squabbles, as I have opposed Obamacare from the beginning. Rather, I bring this story to your attention both because I believe it is important to highlight Obamacare’s many failure and because stories like this dispel the notion among some that the only reason big government doesn’t work is because of Republican obstruction. The blame for this mess lies entirely with Hawaii’s Democrats. Republicans have been a negligible presence in the state’s legislature for decades, and nothing underscores this better than the fact that Hawaii’s 25 member Senate has only

I suspect they’ll figure something out, but it will definitely be interesting to watch how the situation unfolds. Expect plenty of arm twisting.

*=That one voice in the wilderness is Sam Slom. He might be a social moderate, but I sure admire a guy who consistently stands on principle like he does in the face of such overwhelming opposition. He represents part of the city of Honolulu, as do the State House’s 7 Republicans. Surprisingly, the Honolulu area is actually the least radical part of the state.