The Hawaii health-insurance exchange created in response to Obamacare has spent $100 million it received from Washington to fund 6,615 applicants – some of whom are still not even insured yet.
That represents $15,117 per applicant.
The state exchange has another $100 million to implement the program before depleting its grant from U.S. taxpayers, at which point the program is supposed to be self-sustaining through fees on local insurance companies.
Hawaii officials no longer see that as a possibility and are considering making the non-profit Hawaii Health Connector into a state agency subsidized by state taxpayers.
The model Hawaii officials had planned on was a minimum of 100,000 residents signing up for the program, that figure based on the number of uninsured. The 6,615 number includes small businesses and individuals. Most of those applicants have still not completed the paperwork to buy insurance. The applicants represent less than 1 percent of Hawaii’s 1.4 million residents.
“It’s not a good outlook for us,” said Sanjeev Bhagowalia, the state’s IT director. “The business model will not survive.”
Pat McManahan, the state’s human services director, encouraged lawmakers to act quickly because federal money will run out by 2015.
“The time is now to make the decision,” said McManahan. “The longer it is postponed, the less opportunity.”
An estimated $53 million was spent on HawaiiHealthConnector.com, which, Bhagowalia said, still has a number of glitches. Bhagowalia also worried the website is not secure enough to keep “very sophisticated foes” from obtaining confidential information from the site.
“This is a very serious area and we are not prepared,” Bhagowalia said.
Rep. Bert Kobayashi said he was stunned to learn the connector has spent more than $10,000 per person registered on the site.
“That does not sound like it is even possible,” said Kobayashi, a Democrat who represents Kalaha and Kaimuki on Oahu.
A Watchdog.org analysis shows the exchange has actually spent $292,825 on each person who successfully signed up for insurance.
Other legislators were disappointed to hear state Insurance Commissioner Gordon Ito admit the exchange would not lower health-insurance rates in Hawaii. Rep. Justin Woodson, a Democrat from Maui, pressed Ito on the issue.
Ito said insurance plans obtained through the exchange would probably increase 8 percent to 10 percent per year, in part because of the fees assessed on insurance companies to fund the exchange.
The intent of Obama’s Affordable Care Act is to get uninsured people into the marketplace and to spread cost and risk, Ito said, noting Congress failed to address cost drivers with Obamacare.
The exchange is flooding the airwaves with ads on TV and radio encouraging people to sign up. So far, $1.2 million has been allocated for a public relations, media and public outreach contract.