Hawaii Ditches $205 Million Health-Care Portal

Hawaii says aloha to its struggling health-care portal.

by / May 13, 2015

After receiving $205 million in federal funding, Hawaii is giving up on its Affordable Care Act health insurance portal, officials announced May 8. Operations of the Hawaii Health Connector are scheduled to discontinue by Sept. 30.

"Now that it is clear that the state will not provide sufficient support for the Hawaii Health Connector's operations through fiscal year 2016 (ending June 30, 2016), the Connector can no longer operate in a manner that would cause it to incur additional debts or other obligations for which it is unable to pay," officials wrote in a report released to the nonprofit's board of directors.

The exchange, which employs 32 full-time staff, 29 temporary staff and 12 full-time contractors, has been under scrutiny for months for its low enrollment numbers and technical glitches.

Hawaii Gov. David Ige told Government Technology in an interview last year (before he was governor) that one of the portal’s problems was the development of redundant projects — a Medicaid eligibility system that received $24 million in federal funding duplicated much of the functionality found in the ACA portal, he said. Ige’s explanation, however, does not say why after years of development and hundreds of millions of dollars, the portal still doesn’t work properly.

To date, the portal has signed up 9,217 people, along with 628 employees and dependents, and has raised just $40,350 in user fees, according to Nathan Hokama, the exchange's spokesman.

Hawaii signed a bill into law in 1974 requiring employers to subsidize health insurance for their employees, resulting in a relatively low rate of uninsured individuals in the state, a fact that raised controversy early in the project’s development. Many argued that the Affordable Care Act itself was redundant in Hawaii.

Hawaii now joins Oregon, which shut down its state-run portal earlier this year, Massachusetts, Maryland, Vermont, New Mexico and Nevada in the list of states that struggled to complete their portals. The net cost of the Affordable Care Act is calculated by some to reach $1.2 trillion by 2025.