ANALYSIS: Hawaii Health Insurance Exchange Moving Closer to Reality

On Thursday, Jan. 3, the agency tasked with implementing Hawaii’s health insurance exchange (as mandated by the Affordable Care Act, or “Obamacare”) received conditional approval from the US Department of Health and Human Services.

The approval was critical to establishing Hawaii’s exchange system, set to open for enrollment on Oct. 1, 2013.

The “Hawaii Connector” was established by the state Legislature in 2011 as a private, non-profit organization.

Although some states have elected to have their exchanges managed federally, Hawaii has chosen to manage its own exchange, as allowed by federal law.

The Connector will provide the public with a web portal allowing businesses, employees, and individuals to search out and compare available health insurance plans. The portal is intended to provide Hawaii residents with a single, trusted online destination to find the most economical and effective plan for their needs.

As a part of President Obama’s Affordable Care Act, individuals will be required to purchase health insurance if it is not provided by their employer. The law allows states to select an existing insurance plan as a “baseline” for insurance coverage, provided it meets minimum federal requirements, including coverage for preventive care, emergency services, maternity care, hospital and physician services as well as prescription drugs.

Gov. Neil Abercrombie announced in October of 2012 that he had selected The Hawaii Medical Service Association’s Preferred Provider Plan for 2010 as the benchmark package for all future coverage plans in Hawaii.

The HMSA plan selected by Abercrombie stipulates that an individual will not be required to pay more than $2,500 per year in medical co-payments.

Select providers will not require more than $12 per doctor’s office visit, while non-participating providers will not be allowed to charge patients more than 30% of the cost of a visit. Emergency room services will cost patients no more than $75.

HMSA currently controls nearly three-fourths of the Hawaii insurance market, with Kaiser Permanente holding most of the remaining market share.

Once the Affordable Care Act kicks in fully in 2014, residents and businesses can choose to maintain their current coverage, assuming it meets or surpasses the benefits provided by the baseline plan chosen by the governor.

According to the Abercrombie administration, most of the plans currently available in Hawaii meet the federal requirements.

The HMSA Preferred Provider Plan summary can be viewed on the web at http://www.hmsa.com/mediacenter/print/assets/ppp_benefitsummary(800).pdf