Hawaii state insurance exchange to shut down

The Hawaii Health Connector will shut down operations on Sept. 30, InsuranceNewsNet reported.

The exchange site will cease new enrollment this week, discontinue its outreach programs at the end of May and transfer its technology assets to the state by Sept. 30, the article said. The exchange's 37,000 enrollees can re-enroll on the federal Healthcare.gov exchange for the 2016 plan year.

Hawaii Health Connector has faced financial problems from its inception. A report issued earlier this year found that the exchange would not be financially sustainable until 2022, FierceHealthPayer previously reported. Because the Affordable Care Act required state exchanges to be financially sustainable by 2015, the federal government deemed Hawaii's exchange non-compliant, INN said.

In addition, Hawaii Health Connector has failed to comply with the ACA mandate that state exchanges integrate with Medicaid's system for determining subsidies and tax credits. If the state cannot do this by November, it risks losing $1 billion in federal funding for Medicaid, according to INN.

After exchange Executive Director Jeff Kissel failed to obtain the state legislature's approval for $28 million in bonds or loans, he sought $5.4 million from the state to continue exchange operations, the Honolulu Star-Advertiser reported. The legislature gave Hawaii Health Connector only $2 million.

The current enrollment figure of 37,000 exceeds the exchange's goal of 27,260 enrollees by June 30, the Star-Advertiser reported. However, the exchange needs 70,000 enrollees to achieve financial sustainability, INN noted.

State officials told the Star-Advertiser that they will work to ensure that the transition to Healthcare.gov affects only individual plans and not the state's Small Business Health Options Program (SHOP) exchange. That's because insurance plans that comply with the state's Prepaid Health Care Act, which requires employers to subsidize health insurance, are only sold on the SHOP exchange.

Hawaii would be the second state that set up an insurance exchange to move to the federal exchange. Oregon made the switch to Healthcare.gov in April 2014 after more than a year of technical issues. Vermont is mulling a switch to Healthcare.gov, as well.

For more:
- read the InsuranceNewsNet article
- here's the Honolulu Star-Advertiser article

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