State Lawmakers Respond to HMSA CEO's Remarks on Dismantling Hawaii Health Connector

Questions why the member of Health Connector Board did not express concerns earlier

For someone who has been so intimately involved in the formation of the Hawaii Health Connector, state lawmakers are baffled by recent remarks by Michael Gold, president and chief executive officer of the Hawaii Medical Service Association (HMSA). In a Maui News article published today, Gold told the newspaper that the Connector was a costly mistake and that Hawaii “needs to get out from under it. We need to go right now to the federal government and ask them for a waiver to get us out of the connector in Hawaii.” HMSA is one of two health insurers along with Kaiser Permanente Hawaii participating in the health insurance exchange.

“Our legislative session concluded not less than 10 days ago and it is very disappointing to see today’s reports from HMSA calling for the shutting down of the Hawaii Health Connector,” said Rep. Della Au Belatti (Makiki, Tantalus, Papakolea, McCully, Pawaa, Manoa), chair of the House Health Committee. “During the long and arduous legislative session, state lawmakers were extensively briefed by all stakeholders on the Health Connector, including the Governor’s department heads, the Attorney General, and HMSA on how to restructure, reform and right-size the Connector.

“It is very disingenuous, disheartening, and disappointing to learn that the CEO of HMSA is now calling for the dismantling, shutting down and federalization of the Health Connector.”

Rep. Angus McKelvey (West Maui, Maalaea, North Kihei), chair of the House Committee on Consumer Protection and Commerce, also expressed dismay over Gold’s comments which he described as misinformation.

“First of all, the assertion that these waivers exist and that the Legislature did not pursue them is simply not true,” McKelvey said. On Feb. 4 we wrote to our congressional delegation asking for the very same waiver that Mr. Gold alluded to, and we were told in no uncertain terms that we would not be able to secure them. We also drafted a House resolution asking for a waiver and were told again that we could not.

“Through the legislative process, we learned that the only way we could secure a federal waiver was through the innovation waiver process, which is why we passed House Bill 2581 that will set up a task force to develop a plan to seek the waiver.

“Mr. Gold also stated that the Legislature did not ask the right questions regarding the Health Connector during our deliberation on the bills,” McKelvey added. “Well, I for one did not see Mr. Gold at any of the numerous hearings and briefings on the Connector, nor did any of the HMSA participants question the route or the line of questioning that were being asked. And there was plenty of time during the session for HMSA to have brought up any issue relating to the Connector.

“It seems very strange to me that at the same time HMSA is asking for a rate increase of nearly 13%; at the same time that the bill removing HMSA from the board is going to the Governor for his signature, that HMSA now suddenly questions the need for a health exchange, an exchange that HMSA sits on and has been involved in from day one. It’s very problematic, but suggests that we should take a closer look at what’s really driving the cost of health care here in Hawaii.”

With the passage of Senate Bill 2470, the state Legislature has put the Hawaii Health Connector on a corrective course to the future—a future that helps to ensure the survival of Hawaii’s Prepaid Health Act and the health care of everyone in Hawaii. This measure establishes a Legislative Oversight Committee, requires the Health Connector to submit an annual sustainability plan, and amends the composition and procedures of the Connector’s Board of Directors. It also appropriates $1.5 million for the operation of the Connector.

In addition, House Bill 2581 establishes a state Innovation Waiver Task Force to develop a plan for applying for a state innovation waiver that meets the requirements of federal law. With these actions, the Legislature has taken action to address serious issues relating to the transparency, accountability and sustainability of the Health Connector and its process of enrolling and determining the eligibility of potential users during its initial start-up phase.

Ironically, part of the problem with the Health Connector involves Hawaii’s own success under Hawaii’s Prepaid Health Care Act. Enacted in 1974, it has enabled the state to maintain the highest rate of coverage in the nation for health care, and has brought Hawaii closer than most other states in achieving universal health care and fulfilling the goals of the federal Affordable Care Act, which mandates state health exchanges or the participation in the federal program.