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Hawaii’s Health Exchange Is the Nation’s Worst
Only 257 have enrolled so far in a system exempt from transparency rules.

Hawaii Health Connector

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It’s also worth noting that these major insurers now sit on the governor-appointed board of the health exchange, which prompts concerns about conflict of interest; in Hawaii, universal enrollment will add about $300 million a year to the state’s overall insurance market.

These board members are supposed to avoid conflicts of interest — but once again, sunshine is lacking. By law, the Hawaii Health Connector is not required to respond to open-records requests. And though it does hold public meetings, posting minutes online, it’s unclear whether that’s a legal requirement or a mere courtesy the exchange has extended of its own volition.

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“There’s huge accountability problems,” says Gina Mangieri, a reporter with Hawaii’s KHON2. “So far, my experience has been that the Connector was transparent with what they wanted to share and often standoffish with what they didn’t — everything from financial data to the truth behind the technical glitches,” she continues. “Even just getting the first wave of sign-up numbers was like pulling teeth.”

Mangieri tells National Review Online that when she submitted records requests to the exchange, they refused to provide her with information. And when she appealed to the state’s Office of Information, “which is very progressive, they just throw up their hands: ‘Sorry, can’t help; wish we could,’” citing Act 205’s restrictions on access to information.

Barbara Kim Stanton, director of AARP in Hawaii and a strong supporter of the Affordable Care Act, also expressed concerns about the secrecy shrouding Hawaii’s state exchange. “Enrolling the uninsured is too important for the public to be left in the dark,” she said.            

Senator Roz Baker, considered the architect of Hawaii’s Act 205, tells National Review Online, “The way [sunshine] laws have been interpreted really hamstrings a nimble organization, and with the aggressive timelines that we had in terms of meeting the grant and getting the Connector up, it really would not have worked.”

The exchange was established as a nonprofit because “public-private partnerships are the way of the future,” she adds. “It gives you the ability to leverage [the private sector]. In my view, government is not the repository of all wisdom, and it cannot do things by itself. It needs to do things with people in the community who can access things that it cannot.#…#We felt that this [structure] gave us the opportunity to craft something that might work in Hawaii.”

That homage to the private sector is all well and good — except when you consider that Hawaii’s exchange looks an awful lot like a government agency, minus the accountability.

A more “nimble” exchange is a poor excuse for the lack of transparency, especially in light of how badly Hawaii’s health exchange has functioned, despite the enormous taxpayer cost. Though the exchange is theoretically required to be financially independent down the road, Hawaii alone has already received $205 million from the federal government, and Act 205 explicitly says that “the State may appropriate [taxpayer-collected] moneys to the Connector.”

Even in its management, the health exchange has close ties with the state government. The governor appoints board members, who are then approved by the Hawaii Senate. Four board members are the heads of Hawaii state departments. A state auditor will review the health exchange’s books each year, and the results are submitted to the insurance commissioner of the Hawaii Department of Commerce and Consumer Affairs. For at least a decade, the legislature has reserved the right to “have access to, inspect, and make copies of any documents retained” pertaining to the financials of the health exchange.

Hawaii can call this a nonprofit, but what’s in a name? The state-based exchanges exist only because of a broader government takeover of one of the most intricate and delicate parts of the economy. Failure was predictable, but Hawaii’s botched rollout is a particularly shameful example of how poorly government was equipped to take on the task it had appropriated. In the absence of a free health-care market, Hawaiians at least deserve answers about this costly failure.

— Jillian Kay Melchior is a Thomas L. Rhodes Fellow for the Franklin Center for Government and Public Integrity.



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