HI lawmakers: Obamacare exchange failures warrant state takeover

By Malia Zimmerman | Watchdog.org

HONOLULU — Several House Democrats want the state to take over the Hawaii Health Connector, set up last year as a private, nonprofit.

Amid an outpouring of public complaints and scathing reviews, the rollout was called an “epic fiasco.”

“It says something about the importance we place on this agency and the work it does on behalf of the people of Hawaii when we place it under the direct auspices of the governor,” said Democratic Rep. Della Au Belatti, who chairs the House Committee on Health.

House lawmakers are concerned about a number of issues.

Just more than 3,000 people signed up for health care through the exchange — less than 1 percent of Hawaii’s 1.4 million people — despite the exchange receiving $204 million from the federal government to set up the site and its affiliate agencies, as well as to advertise and promote the exchange.

This low turnout was a shock to many Democrats enthusiastic about the Affordable Care Act, particularly after Gov. Neil Abercrombie and others promoting the exchange predicted at least the 100,000 uninsured in the state — and possibly as many as 300,000 people — would register.

There’s more.

Technical glitches still plague the site more than four months after its launch, state officials and industry experts have testified. According to the state technology guru, Sanjeev Bhagowalia, the site is vulnerable to hackers who could expose the private information of those who registered for Obamacare.

Bhagowalia, the state’s IT director, supports a state takeover. Bhagowalia told lawmakers in December that “very sophisticated foes” — hackers — could obtain confidential information from the site.

“This is a very serious area, and we are not prepared,” Bhagowalia said.

Expenditures, including the $53 million allocated to CGI Group to build the exchange website portal, have also caught the attention of lawmakers.

Senate President Donna Mercado Kim, D-Moanalua, said she warned Hawaii Health Connector executives about past problems with the Canadian-based technology company; the state tax department spent millions of dollars on a GCI contract for a website that still doesn’t work properly.

As Kim predicted, the exchange’s website failed to work as expected for more than two weeks after it launched Oct. 1. Plans and pricing could not be displayed, and the system crashed and froze when users tried to register. Since the site relaunched Oct. 15, complaints include cumbersome technology, frequent crashes after the extensive forms are filled out and submitted, confusion over plan pricing and scrambled information transmitted to the health-care providers.

While the state House has introduced a number of measures to save Obamacare here, Kim said she’s not in favor of the state taking over the exchange operations, calling it a financial “black hole.”

The exchange has already expended or appropriated at least half of the $204 million. To keep it operating past 2014, lawmakers said, the exchange would need at least another $15 million a year.

The House has yet to negotiate the final outcome of the pending legislation with the Senate.

“I want to be clear that these measures are a work in progress and allows us to continue to establish a better framework and foundation so that the Health Connector can successfully move forward in fulfilling the goals of the Affordable Care Act,” said Belatti

“Even as the healthcare landscape changes around us, we need to be able to respond to the developing rules and regulations to allow the Health Connector to move forward in achieving its mission.”

Belatti agrees finances are a concern, including the current board’s inability to come up with a workable financial strategy for the long-term. The exchange was supposed to be funded by a 2 percent fee paid by the insurance companies to the exchange. But with low sign-ups, that plan isn’t feasible.

Hawaii Health Connector web site is still having technical problems, four months after its launch

Belatti’s committee is proposing a “sustainability fee” over the next two years and is looking at other state funding mechanisms.

Lawmakers and the media have also expressed concerns about a lack of transparency.

The House Health Committee passed legislation Wednesday, which Belatti said will force the connector to comply with the state procurement code, requiring it to post public hearing and notice requirements and create greater opportunities for public participation in the Health Connector through a consumer, patient, business and health-care advisory group.

The measures must pass the House Committee on Consumer Protection and Commerce, gain the approval of the majority of the 51-member House before moving to the Senate.

Reach Malia Zimmerman at Malia@hawaiireporter.com

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