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Hawaii to keep running a state-based exchange

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Lawmakers in Hawaii have agreed to try to keep the state’s glitch-plagued public health insurance exchange in state hands in 2015.

If the exchange enrollment system works, certified agents and brokers can use it enroll individuals and small employers directly in exchange coverage.

The House and the Senate included those provisions in a version of state Senate Bill 2470 that could give the state-based Hawaii Health Connector exchange $1.5 million in funding.

Gov. Neil Abercrombie, D, has been a strong supporter of the exchange program, and lawmakers expect him to sign the bill soon.

The Patient Protection and Affordable Care Act provided startup funding for PPACA exchanges for 2014 but requires the exchanges to support themselves with user fees or other sources of funding in 2015.

The U.S. Department of Health and Human Services has ruled that exchanges with startup money left over at the end of 2014 can use the money for some purposes in 2015.

Tom Matsuda, who has been interim executive director of the exchange since December, had asked the state for $4.7 million in funding.

Hawaii relied heavily on manual systems to get 9,800 residents through the exchange “qualified health plan” selection process.

The enrollment system problems hurt sales. Avalere Health analysts are estimating that Hawaii’s paid exchange QHP enrollment will only be about half what they would have expected, based on the number of moderate-income uninsured people living in Hawaii. The Hawaii exchange has been one of the worst-performing exchanges in Avalere Health exchange performance rankings.

Some policymakers in Hawaii had argued that the state should give up on trying to run its own exchange and use the HHS enrollment system.

Hawaii has had distinctive health insurance laws in place since 1974. Opponents of following the example set by Maryland and Oregon and switching to the system argued that doing so would let federal health insurance laws preempt state laws.

The role of agents and brokers at the exchange has been another contentious issue.

In drafts of S.B. 2470, lawmakers came up with several different versions of a section describing how the exchange would work with producers.

The final version lets exchange-certified producers use the exchange to enroll customers directly in QHPs.

The insurer that writes the QHP coverage will be responsible for paying the producer.

Exchange managers recently reported in a document for marketing contract bidders that the exchange had completed training 35 producers by early April and was in the process of training another 55 producers.

The exchange was also working with 132 “kokua,” or in-person assisters.

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