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State health exchange costs likely to fall

January 29, 2014 - 9:13pm

HONOLULU — The cost of running Hawaii’s health insurance marketplace is likely to fall below its original projection of $15 million annually because of low enrollment, its executive director told lawmakers Wednesday.

Tom Matsuda of the Hawaii Health Connector said at a hearing that the exchange is working on a business plan that should be ready in two months.

“We all recognize that is maybe too slow,” he said. “We’re trying to accelerate the process.”

The report could affect how lawmakers consider bills to overhaul how Hawaii sells insurance plans under President Barack Obama’s federal health care overhaul.

The beleaguered exchange has had problems since sign-ups were supposed to begin in October, including software problems, a two-week delay and low enrollment.

Lawmakers have proposed several fixes, including absorbing the exchange into a state agency.

Government officials and interest groups testified to oppose that move until the state knows more about what running the exchange would entail.

“It’s not in the public’s best interest to find out after the fact that fiscal problems have been passed to the state,” said lobbyist Steve Tam of AARP Hawaii.

Democratic Rep. Della Au Belatti, chairwoman of the House Health Committee, deferred decision on the bill and other measures designed to help the exchange until Friday.

One bill would exclude insurance companies from placing members on the exchange’s governing board. Another would make Gov. Neil Abercrombie’s Office of Health Transformation permanent. The office has been in charge of coordinating the rollout of the federal law in Hawaii.

Members of the Hawaii Health Authority, a five-year-old health-planning body within the Department of Budget and Finance, said the authority already is set up to coordinate the health care overhaul.

Successful health care changes in other states “are physician-led, and not controlled by insurance companies,” Stephen Kemble, a psychiatrist, told lawmakers. He criticized Hawaii’s health transformation as too favorable to health insurers at the expense of patients and doctors.

Beth Geisting, the governor’s health care transformation coordinator, pushed for making the office she leads permanent to connect care, private institutions and government programs.

“Unless the change is aligned, planned, coordinated, we really are not going to see the kind of results we should be getting,” she told the committee.

Rep. Marcus Oshiro, a Democrat representing Wahiawa, asked Geisting whether an upcoming audit of the health-insurance exchange should be a factor in lawmakers’ decision to bring it under state control.

“Yes, it probably is,” Geisting said.

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