Gov. David Ige's administration says Hawaii's health insurance exchange will have to make changes to comply with federal Affordable Care Act.
Deputy Chief of Staff Laurel Johnston said Wednesday the administration's plan calls for using the federal government's information technology to run the Hawaii Health Connector's troubled insurance exchange.
The connector would keep existing customer support workers and navigators who help people find the right insurance plan.
One problem with the status quo is the state's insurance exchange must offer residents one place to sign up for either an insurance plan or Medicaid by the time open enrollment begins in the fall.
But Johnston said the health connector isn't ready to meet this deadline, putting at risk $1 billion in federal matching funds.
"We can't continue to be noncompliant," she said.
The changes will cost money, but Johnston says the state will negotiate with the federal government for the release of Affordable Care Act funds to pay for the reforms.
She says the federal government still hasn't released $70 million set aside for Hawaii to implement the healthcare overhaul.
The Hawaii Health Connector is a nonprofit the state established to run the exchange for the Affordable Care Act. It has an independent board. But Hawaii's exchange has struggled from the beginning, with low enrollment and a malfunctioning website. It got the website to work, but it's still currently financially unsustainable.
Johnston said the federal government contacted the Ige administration to address the noncompliance problems.
Johnston said the administration has "tried to not stomp on people while we navigate this and facilitate it."
The administration's conversations on the changes have been delicate as they have involved a private entity as well as state and federal governments, she said.
Jeffrey Kissel, the executive director of the Hawaii Health Connector, said the exchange has plans to protect the 37,000 people obtained insurance through the exchange.
"Our priority is to make sure that they have insurance," he said.
Johnston said the changes are coming now because the federal government gave the state until next week to come up with a plan. Hawaii also needs to prepare for open enrollment in the fall, she said.