The Hawaii Health Connector began layoffs last week in preparation for closing operations by this time next year.
The state will switch to the federal exchange at healthcare.gov in time for the November 2015 open-enrollment period, according to a statement from Gov. David Ige made earlier this month.
The private, nonprofit health insurance exchange launched in the fall of 2013, charged with helping uninsured Hawaii residents compare and purchase health insurance plans online, as required by the Patient Protection and Affordable Care Act, also known as Obamacare.
But from the very beginning, the website, hawaiihealthconnector.com, was plagued by technical glitches and low enrollment numbers.
The Health Connector was informed that the federal government would not renew its grant funding because it had been unable to “generate sufficient revenues to sustain operations,” according to Ige’s June 5 release.
“The viability of state health insurance exchanges has been a challenge across the country, particularly in small states due to insufficient numbers of uninsured residents. The State of Hawaii has a high rate of insured residents due to employer-based health care coverage and Medicaid program expansions,” he said in the release.
The shutdown affects both the connector’s own employees as well as contractors with “marketplace assister organizations” on each island. These assister organizations, 36 in all, provided manpower to help island residents on an individual basis with searching for and signing up for health insurance.
“We are anticipating being able to continue to some degree,” Kissel said Monday afternoon, “but we haven’t got word back from the federal government how much of that expense they’re willing to fund. As a result, because the grants are effectively expiring June 30, and we’re not able to renew them, until we get approval from the federal government, several of the market assister organizations are having to give notices to their employees.”
The Connector had a single employee on the Big Island who recently left voluntarily, Kissel said. Meanwhile, there are four assister organizations on the island, including Arc of Hilo, the Hawaii Island Workforce and Economic Development Ohana, Five Mountains and the West Hawaii Community Health Center.
Calls seeking comment from the Big Island’s assister organizations were not returned by deadline.
All told, about 200 workers will eventually be let go, Kissel said.
“Our priority here is to make sure there’s continuity of coverage for everybody, whether they’re enrolled as individuals or through a business,” he said. “And we have the resources to do that, and we’re making certain that that happens.”
The state has so far sunk about $130 million into the Connector.
Email Colin M. Stewart at cstewart@hawaiitribune-herald.com.
