Hawaii lawmaker calls for federal investigation into Obamacare spending

By Malia Zimmerman | Watchdog.org

HONOLULU — Senate Minority Leader Sam Slom plans to ask the U.S. Government Accounting Office to investigate the state’s Obamacare exchange, Hawaii Heath Connector, if the connector doesn’t become more transparent and accountable in its spending.

Slom disclosed his plans to file the GAO complaint to Watchdog.org and also in a letter to Linda Rosen, director of the Hawaii State Department of Health, in which he asked her for details of the $204 million received from the federal government in Affordable Care Act grants.

Hawaii’s Health Connector, an independent nonprofit established by the Legislature, has so far refused to release details on how the grant money was spent, Slom said, citing “a potential threat” by making public ideas that could put the state exchange at a competitive disadvantage with the private sector.

“The lack of transparency regarding the grant expenditure requirements prompts this request for information and documentation,” Slom said.

At a Hawaii Health Connector hearing with the Senate Consumer Protection Committee on Monday, Hawaii Health Connector interim executive director Tom Matsuda briefed Senate committee chair Roz Baker and Slom on the status of enrollment.

“While there were several slides in the PowerPoint, there were few specific answers to my questions. Taxpayers should be very alarmed,” Slom said. “The Connector now boasts 5,400 people ‘signed up,’ but that does not equate to actual policyholders and is far short of the 100,000-person estimate made by the Connector last year. The registration period ends March 31 of this year. This means Hawaii resident taxpayers will make up any losses of the Connector.”

During the briefing, Slom asked for the total number of paid employees and the cost for payroll, how the $204 million has been spent or allocated and the total amount spent on advertising the exchange, but Matsuda didn’t provide all the details, Slom said.

The Senate committee learned the contract with Canadian-based CGI, Inc., was higher than originally disclosed.

Matsuda revealed to lawmakers that the state will pay CGI $74 million over four years to build and maintain the portal. Previous reports had the cost estimated at $53 million.

Matsuda also acknowledged the website is still not fully operational today, several months after the Oct. 1 launch, in part because the Small Business Health Options Program for small businesses isn’t working. Slom, who also serves as president of the small business advocacy group Smart Business Hawaii, said the defective SHOP program is leaving small businesses frustrated.

“The website, run by CGI, has experienced numerous technical problems mirroring the problems of the federal CGI-run website. Many people have been unable to enroll via the website, contradicting assurances that the Hawaii Health Connector was meeting its deadlines and would be ready to serve the public,” Slom said.

CGI is the same company that built the troubled Healthcare.gov web site. The Obama administration ended its contract with CGI in January after the website failed to function properly upon its Oct. 1 launch.

Senators also learned during the briefing the federal government has no plans to extend additional funding grants to the Hawaii Health Connector, placing the burden on Hawaii taxpayers to make up additional costs to operate the Connector. Hawaii’s exchange must be self-sufficient by 2015.

Lawmakers are considering a number of options, including having the state take over the exchange, a plan advocated by the House majority leadership.

That could total between $15 million and $24 million a year, Senate President Donna Mercado Kim told Watchdog.org, when she detailed her opposition to a proposal for Hawaii to take over the exchange.

Lawmakers may also add a fee for all of Hawaii’s insurance providers to every plan sold, even if those providers don’t participate in the exchange.

Matsuda said the Connector is revamping its strategy to become more like the “Kayak model,” referring to the online travel booking website, in hopes it will make signing up for the exchange easier.

Matsuda didn’t return a call from Watchdog.org on Friday seeking comment.

Before its launch Oct. 1 Gov. Neil Abercrombie predicted “hundreds of thousands of people” in Hawaii would register for Obamacare. Hawaii has the nation’s lowest enrollment numbers, a U.S. Department of Health and Human Services report said last month.

Slom’s inquiry comes just two days before the fourth anniversary of the passage of the ACA on March 23, 2010.

Reach Malia Zimmerman at Malia@hawaiireporter.com

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