Hawaii ponders: It might be time to start taxing insurers for not participating in our ObamaCare exchange

posted at 2:41 pm on March 11, 2014 by Erika Johnsen

Five months and approaching a coupla’ hundred million dollars in federal grants later, Hawaii still hasn’t made much progress on mending their terrifically botched ObamaCare exchange website, and the clock is ticking. With barely a few weeks to go until the open enrollment period ends (for now — I have very little faith that His Highness won’t issue another royal decree somehow extending that deadline, too), the state government is entering panic mode over their super-low enrollment figures and their definitive lack of a long-term financing plan for the exchange, which needs to be self-sustaining by the start of 2015. As of mid-February, only about 4,400 people were signed up for health insurance through ObamaCare — a rather conspicuous dip from the hundred thousand people Gov. Neil Abercrombie once predicted would hop to it:

The exchange had originally planned to stay afloat by collecting a 2% fee on every plan sold through the exchange, but with the slow pace of enrollment and changing federal rules — delaying the employer mandate and allowing canceled plans to continue — Interim Director Tom Matsuda said Wednesday that the math simply does not add up. …

Of the 100,000 uninsured in Hawaii, about half are expected to be eligible for Medicaid — meaning just 50,000 people would buy individual plans through the Health Connector under the best-case scenario. And while Hawaii hoped to sell thousands of plans through the exchange’s small-business marketplace, Matsuda said so few small businesses are eligible for tax credits that officials are simply not seeing the demand. “What people can get on the Connector versus outside the Connector is the same, so there isn’t really a strong incentive for small employers to use the Connector,” he said.

Further complicating matters, only two insurers offer plans on Hawaii’s exchange, so many companies are continuing to rely on their longtime brokers (who, having essentially been cut out of the process, have no incentive to help Hawaiians buy plans on the exchange).

Hence, Hawaiian legislators’ latest proposal to cover their bums includes a plan to start charging a “fee” to insurers that decided not to participate in the state’s exchange.

The fee would help prop up the financially troubled Hawaii Health Connector, which could run out of money to pay its bills by year’s end.

“This is not something we want to do,” said Rep. Angus McKelvey, chairman of the House Consumer Protection and Commerce Committee. “It’s federally mandated that we have to have our exchanges be sustainable.”

The unspecified fee would be charged by the state insurance commissioner until mid-2018, based on the number of people the carrier insures. …

The new insurance fee is part of a flurry of House proposals that were rolled into one overarching bill (HB 2529) now being considered by the Senate. …

A “fee,” i.e., slapping a tax on any insurer (and, subsequently, its customers) that decided it was not in their company’s interest to participate in ObamaCare just yet. As the LA Times piece above notes, there are only two insurers currently participating in Hawaii’s exchange — meaning that, if the proposal passes, everybody else is going to have to pay to subsidize ObamaCare’s poor technical, logistical, and financial functionality in the state. And here I was, thinking that ObamaCare was supposed to improve the market and lower everybody’s costs, or something?


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And yet, it will never be repealed. Queer ‘marriage’ and legal dope is just too important.

Lanceman on March 11, 2014 at 2:47 PM

Won’t that keep health insurance costs down? Unless, of course, insurance companies are barred from passing on the tax to their customers.

In that case, you could expect to see insurers exit Hawaii’s market entirely, meaning fewer companies selling insurance. Which, in the NewSpeak of Obamanation Care is “greater choice.”

No Truce With Kings on March 11, 2014 at 2:48 PM

Speaking of dumb and Hawaii…

The Senate’s Answer To The House’s Hank “Tippin’ Guam” Johnson?

Cory Booker says he ‘drove to Hawaii’ as a teenager

Resist We Much on March 11, 2014 at 2:44 PM

Interstate Highways in Hawai’i

Del Dolemonte on March 11, 2014 at 2:49 PM

“It’s federally mandated that we have to have our exchanges be sustainable.”

 
It’s neat how other businesses can only pass costs on to their own customers.
 
Seems like a disadvantage, really.

rogerb on March 11, 2014 at 2:51 PM

Driving private insurers out of the state. Great move.

Hat Trick on March 11, 2014 at 2:52 PM

Speaking of Hawai’i, from yesterday:

—Details in the autopsy report of Hawaii’s former health director who died after a plane’s ocean landing reveal how traumatic the ordeal was for her.

The autopsy report obtained by The Associated Press on Monday says Loretta Fuddy was “markedly afraid” while waiting for help to arrive after the small plane crashed off Molokai on Dec. 11.

The report says 65-year-old Fuddy was a “rudimentary swimmer” who never swam in the ocean.

Maui police have said her death was the result of an irregular heartbeat triggered by stress. The autopsy says the acute cardiac arrhythmia was due to hyperventilation.

The pilot and seven other passengers on the Makani Kai Air flight survived without major injuries.

Del Dolemonte on March 11, 2014 at 2:52 PM

Yes, yes, ve vill haf 100% participation, an you vill be privileged to participate…if you do not participate, I am sorry, ve vill haf to destroy you. Ve vill be ensured of 100%, ya…

right2bright on March 11, 2014 at 2:55 PM

Del Dolemonte on March 11, 2014 at 2:52 PM

That’s okay, Dear Leader will simply “deem” her to be alive retroactively.

All will be well.

Difficultas_Est_Imperium on March 11, 2014 at 2:58 PM

Interstate Highways in Hawai’i

Del Dolemonte on March 11, 2014 at 2:49 PM

Booker said that he drove TO Hawaii as a teenager; not THROUGH parts of Hawaii.

Resist We Much on March 11, 2014 at 3:02 PM

Doctors that won’t take the money losing Obama-democrat Care payments take notice. This is coming right at you.

Scratch a fascist, find a progressive democrat.

jukin3 on March 11, 2014 at 3:05 PM

Even more so than California, Hawaii’s climate and beauty of nature is so great that they may get away with it to an extent and for a while. Almost anywhere else, people would just pack up and leave.

Fenris on March 11, 2014 at 3:05 PM

That’s okay, Dear Leader will simply “deem” her to be alive retroactively.

All will be well.

Difficultas_Est_Imperium on March 11, 2014 at 2:58 PM

Yep, like that woman who died six years ago in Detroit, and whose mummified body was just found a couple weeks ago.

She may have been dead, but that didn’t stop her from voting in the 2010 elections!

AZCoyote on March 11, 2014 at 3:06 PM

It’s just going to get more totalitarian. The insurers might as well pull out or shut down right now. They should have listened to the warnings.

forest on March 11, 2014 at 3:21 PM

Booker said that he drove TO Hawaii as a teenager; not THROUGH parts of Hawaii.

A woman swam across the Atlantic by getting in the swimming pool of the passenger liner she was on and swimming in it until the ship reached the other side.

Maybe Booker did the same type of thing. Just picture him in one of those Shriners cars toodling around and around the deck of a ship.

No Truce With Kings on March 11, 2014 at 3:21 PM

Five months and approaching a coupla’ hundred million dollars in federal grants later, Hawaii still hasn’t made much progress on mending their terrifically botched ObamaCare exchange website, and the clock is ticking.
===========================================================================

Probably because everyone is smacked up on Hawaiian Snow Strain!!
(sarc)

canopfor on March 11, 2014 at 3:21 PM

Maybe Booker did the same type of thing. Just picture him in one of those Shriners cars toodling around and around the deck of a ship.

No Truce With Kings on March 11, 2014 at 3:21 PM

lolz

Klown Noze On/Klown Noze Off in da Klown Kar.

Resist We Much on March 11, 2014 at 3:26 PM

The Senate’s Answer To The House’s Hank “Tippin’ Guam” Johnson?

Cory Booker says he ‘drove to Hawaii’ as a teenager

Resist We Much on March 11, 2014 at 2:44 PM

Interstate Highways in Hawai’i

Del Dolemonte on March 11, 2014 at 2:49 PM

Booker said that he drove TO Hawaii as a teenager; not THROUGH parts of Hawaii.

Resist We Much on March 11, 2014 at 3:02 PM

Think about it RWM, “Interstate” Highways in Hawaii.

That’s some weapons grade snark from Del.

NapaConservative on March 11, 2014 at 3:26 PM

Driving private insurers out of the state. Great move.

Hat Trick on March 11, 2014 at 2:52 PM

Don’t you just love it when a plan comes together like this..?

affenhauer on March 11, 2014 at 3:34 PM

Think about it RWM, “Interstate” Highways in Hawaii.

That’s some weapons grade snark from Del.

NapaConservative on March 11, 2014 at 3:26 PM

lolz. I didn’t think about it.

I wonder if Booker drove by Obama when the latter was traveling on the intercontinental railroad.

hehe

Resist We Much on March 11, 2014 at 3:39 PM

“I am Chief Justice John Roberts, and I approve of this plan…”

ZeusGoose on March 11, 2014 at 3:40 PM

Roberts did say a mandate was a tax. Perhaps he was thinking real long and figured the insurance companies would have standing several years out to undo OC. Ya think??? Nah, he was more concerned with not saying no to legislation.

AH_C on March 11, 2014 at 3:51 PM

If these idiots slap on tax on insurers to punish them for not participating in Obamacare, the insurers will just turn around and pass it on to their customers. Brilliant.

eyedoc on March 11, 2014 at 3:53 PM

Hawaii needs to bring back KikiCare. That was such a rousing success, having so many people sign up, that the program ran out of cash within 6 months and had to be shut down. There were stories about KikiCare and how fast money can be flushed down a public health insurance hole back when BarkyCare was still being illegally rammed through Congress, using every underhanded, criminal and un-American tactic in the book.

ThePrimordialOrderedPair on March 11, 2014 at 3:54 PM

Think about it RWM, “Interstate” Highways in Hawaii.

NapaConservative on March 11, 2014 at 3:26 PM

It’s not so odd as you might think. In Columbus, OH, there is an “Interstate” 270 which is just an outer belt around the city. Similarly, “Interstate” 670 just runs from the east end of 270 through downtown to just beyond the west end of 270, where it merges into I-70.

The Schaef on March 11, 2014 at 4:02 PM

Cory Booker says he ‘drove to Hawaii’ as a teenager

Resist We Much on March 11, 2014 at 2:44 PM

…in Asia!

KOOLAID2 on March 11, 2014 at 4:04 PM

It’s not so odd as you might think. In Columbus, OH, there is an “Interstate” 270 which is just an outer belt around the city. Similarly, “Interstate” 670 just runs from the east end of 270 through downtown to just beyond the west end of 270, where it merges into I-70.

The Schaef on March 11, 2014 at 4:02 PM

Three numbers with even as the first are interstates through or around a city.

Odd numbers are spurs into cities.

Lanceman on March 11, 2014 at 4:07 PM

Why would even 50,000 sign up for this crap?

But, that’s how cons work-people’s greed-they think they’ll get something for nothing.

Dr. ZhivBlago on March 11, 2014 at 4:10 PM

If these idiots slap on tax on insurers to punish them for not participating in Obamacare, the insurers will just turn around and pass it on to their customers. Brilliant.

eyedoc on March 11, 2014 at 3:53 PM

And they should explain the additional cost with…

“Your cost increase has been provided by the politicians… [list of NAMES].”
“Please feel free to call and thank them for their support at [phone num].”

dominigan on March 11, 2014 at 4:13 PM

If the insurers not participating in the exchange decide to stop doing business in Hawaii, I suspect the legislators would suddenly decide they need to charge an ‘exit fee’ or do some other rent-seeking to try to grab a bit more cash before it’s too late.

There are only about 1.4 million people in the state of Hawaii according to the 2013 estimate by the US Census Bureau. It appears to me that the incentives for insurers to quit doing business in Hawaii may soon outweigh the potential profits of staying.

s1im on March 11, 2014 at 4:18 PM

Hawaii ponders: It might be time to start taxing insurers for not participating in our ObamaCare exchange

Insurance ponders: It might be time to leave the Hawaii market.

BacaDog on March 11, 2014 at 4:25 PM

Didn’t they blow over 200 million to sign up a handful of people?

http://nation.foxnews.com/2014/02/18/hawaii%E2%80%99s-200-million-obamacare-exchange-boasts-less-1-percent-enrollment

Yeah, that’s what I thought.

“It’s federally mandated that we have to have our exchanges be sustainable.”

When you spend 200 million to sign up 1% of your uninsured; you’re probably not going to be able to tax enough to make ends meet at any rate of taxation.

gekkobear on March 11, 2014 at 4:36 PM

Speaking of dumb and Hawaii…

The Senate’s Answer To The House’s Hank “Tippin’ Guam” Johnson?

Cory Booker says he ‘drove to Hawaii’ as a teenager

Resist We Much on March 11, 2014 at 2:44 PM

Hoo, brah! Doncha know they have an INTERstae in Hawaii? There MUST be an exit to California on that road somewhere!

I kept looking for it when I lived there, but Cory is da man!

NavyMustang on March 11, 2014 at 4:45 PM

A “fee,” i.e., slapping a tax on any insurerA “fee,”

Sound more like a civil penalty for being in business.

William Teach on March 11, 2014 at 4:55 PM

All that is legal will be mandatory. All that is not mandatory will be illegal.

Rusty Nail on March 11, 2014 at 5:15 PM

Interstate Highways in Hawai’i

Del Dolemonte on March 11, 2014 at 2:49 PM

Booker said that he drove TO Hawaii as a teenager; not THROUGH parts of Hawaii.

Resist We Much on March 11, 2014 at 3:02 PM

Think about it RWM, “Interstate” Highways in Hawaii.

That’s some weapons grade snark from Del.

NapaConservative on March 11, 2014 at 3:26 PM

When I lived in Hawai’i in the mid 1960s, H-1 had just been completed. And the H-3, which would connect Windward O’ahu to Pearl Harbor, began the planning phase just as our family left in 1966.

Thanks to the tree huggers, the H-3 was not completed until 1997.

FYI the reason for the “Interstate” highways out there is that the “official” name of the Interstates is “the Dwight D. Eisenhower National System of Interstate and Defense Highways.” The H-3 for example directly connects Marine Base Hawai’i at Kaneohe Bay with Pearl Harbor and Hickam AFB.

Del Dolemonte on March 11, 2014 at 5:52 PM

Hence, Hawaiian legislators’ latest proposal to cover their bums includes a plan to start charging a “fee” to insurers that decided not to participate in the state’s exchange.

So they plan to tax one group of people for benefits that are given to another group of people.

Well, that seems to be consistent.

There Goes the Neighborhood on March 11, 2014 at 5:57 PM

And here I was, thinking that ObamaCare was supposed to improve the market and lower everybody’s costs, or something?

Just you wait and see! Those websites will be working any day now, and Democrats will be proudly running on Obamacare! Just because there’s a few little glitches temporarily…

Well, as one of our brilliant observers commented so brilliantly:

Ed –
You mean the websites aren’t working perfectly on day one two three four five six seven eight nine ten eleven twelve thirteen fourteen fifteen sixteen seventeen eighteen nineteen twenty twenty-one twenty-two twenty-three twenty-four twenty-five twenty-six twenty-seven twenty-eight twenty-nine thirty thirty-one thirty-two thirty-three thirty-four thirty-five thirty-six thirty-seven thirty-eight thirty-nine forty forty-one forty-two forty-three forty-four forty-five forty-six forty-seven forty-eight forty-nine fifty fifty-one fifty-two fifty-three fifty-four fifty-five fifty-six fifty-seven fifty-eight fifty-nine sixty sixty-one sixty-two sixty-three sixty-four sixty-five sixty-six sixty-seven sixty-eight sixty-nine seventy seventy-one seventy-two seventy-three seventy-four seventy-five seventy-six seventy-seven seventy-eight seventy-nine eighty eighty-one eighty-two eighty-three eighty-four eighty-five eighty-six eighty-seven eighty-eight eighty-nine ninety ninety-one ninety-two ninety-three ninety-four ninety-five ninety-six ninety-seven ninety-eight ninety-nine one hundred one hundred one one hundred two one hundred three one hundred four one hundred five one hundred six one hundred seven one hundred eight one hundred nine one hundred ten one hundred eleven one hundred twelve one hundred thirteen one hundred fourteen one hundred fifteen one hundred sixteen one hundred seventeen one hundred eighteen one hundred nineteen one hundred twenty one hundred twenty-one one hundred twenty-two one hundred twenty-three one hundred twenty-four one hundred twenty-five one hundred twenty-six one hundred twenty-seven one hundred twenty-eight one hundred twenty-nine one hundred thirty one hundred thirty-one one hundred thirty-two one hundred thirty-three one hundred thirty-four one hundred thirty-five one hundred thirty-six one hundred thirty-seven one hundred thirty-eight one hundred thirty-nine one hundred forty one hundred forty-one one hundred forty-two one hundred forty-three one hundred forty-four one hundred forty-five one hundred forty-six one hundred forty-seven one hundred forty-eight one hundred forty-nine one hundred fifty one hundred fifty-one one hundred fifty-two one hundred fifty-three one hundred fifty-four one hundred fifty-five one hundred fifty-six one hundred fifty-seven one hundred fifty-eight one hundred fifty-nine one hundred sixty one hundred sixty-one one hundred sixty-two
verbaluce on October 1, 2013 at 10:18 AM

Wait, this is day 162? My how the time does fly.

There Goes the Neighborhood on March 11, 2014 at 6:00 PM

Wait, this is day 162? My how the time does fly.

There Goes the Neighborhood on March 11, 2014 at 6:00 PM

With only 21 left to enroll. Until Obama decrees otherwise. He’s. The. Law.

de rigueur on March 11, 2014 at 6:40 PM

As far as I know there are two major providers, Kaiser and HMSA. There are probably others, such as HMA, which a few years ago became the default provider for government employees (i.e. you needed to say you wanted to stay with whoever your provider was) and you should have seen HMSA pull out the stops to get its customers to stick with them rather than be shifted, by default, over to HMA.

2% fee on plans. I heard that the exchange needed $15,000,000 (annually I suppose).

At 100,000 plans that would work out to an average plan premium of $7,500. At 50,000 plans that would be like $15,000. So if you went through the exchange, got your plan, paid the fee (one way or another), then what happens next year when you renew? The actual fee might be $150 or $300 from these numbers, but what additional service is the exchange providing to justify the fee?

Russ808 on March 11, 2014 at 6:52 PM

So much for the free market. If Hawaii does that, insurers will completely leave the state.

sadatoni on March 11, 2014 at 7:38 PM

“It’s federally mandated that we have to have our exchanges be sustainable.”

Since when does a federal mandate matter? The administration will just dig up some money from one of their slush funds for a bailout. They have to keep the blue state governments happy since they can’t print money.

oldchiver on March 11, 2014 at 7:55 PM

My insurer (HMAA) renewed all of our policies in December to avoid dealing with the Connector. I figured with Obama’s latest kick the can move we could continue on another 2 years…which we can…we will just be forced to subsidize something we don’t use. I am intensely irritated. This was foreseeable since most of us were already covered due to Hawaii law and did not need the Connector or Obamacare in the first place.

HawaiiLwyr on March 12, 2014 at 2:26 AM

I am a resident of Hawaii and do not think that we should be concerned with Obama Care enrollment numbers. Primarily, because when looking at the current HMSA and other State of Hawaii Unions backed Medical packages they are compliant.

Also reading all two thousand pages of the Obama Care Act the contents already contain Hawaii’s insurance scams.

It is also ironic that Hawaii political factions damn allowing any form of gambling (Lottery/Bingo, etc.), especially when I remind the opposition that the State of Hawaii already sanctions and controls gambling.

But the people do not see insurance as a form of gambling. However, it is the biggest gamble of ones life. You bet Insurers that you will beat the actuarial tables and to do so you are the winner, if not you loose big time.

MSGTAS on March 12, 2014 at 10:57 AM

“It’s federally mandated that we have to have our exchanges be sustainable.”

This reminds me of the story about the time one of the state legislatures many years ago decided to pass a law that the value of pi be exactly 3, because it makes the math simpler.

Of course they had to rescind the law when they discovered the rotunda in the new capital building was going to be missing a slice (okay, I made this part up, but it would be the kind of result you’d get if a builder were forced to take that law seriously).

Too bad we live in a real world, not the fantasy one so many politicians try to create for us. And it’s really bad that politicians keep refusing to face reality and keep coming up with ignorant unrealistic laws.

s1im on March 12, 2014 at 9:52 PM