Senate Committee on Commerce and Consumer Protection (CPN) - chair: Rosalyn H. Baker, vice chair: Brian T. Taniguchi

Tuesday, March 18, 2014, 9:00 a.m. Room 229

Testifier: Joy A. Marshall, RN, Legislative Committee, LWV of Hawaii

Click here to view HB2529, HD3

Chair Baker, Vice-Chair Taniguchi, and Committee Members: The League of Women Voters of Hawaii offers comments only on this bill. The League supports quality health care for all at an affordable price. We acknowledge the hard work of many members of the Legislature in seeking to resolve the strategic and structural problems facing the Hawaii health connector. The key strategic problem is now clear to the public, thanks to Director Tom Matsuda’s candid comments in his February 26 testimony to the House Finance Committee. The Health Connector is not sustainable over the long term due to the relatively small size of the uninsured market in Hawaii. In fact, the problem is immediate, since the Connector is not sustainable after 2016 even with an extension from the Federal funding agency. Our understanding is that in 2017 the Affordable Care Act (ACA) permits Innovation Waivers that would allow Hawaii to operate a more appropriate State-based marketplace. This seems like the way to go, and we fully support the related HB 2581, HD2. In fact, we call on the Connector management and Hawaii’s Congressional delegation to try for an innovation waiver before 2017. Not doing so means we’re likely to spend taxpayer money (State or Federal) on an exchange that’s bigger than what Hawaii needs. In effect, Hawaii has already come close to achieving the goals of the Affordable Care Act, so why invest more toward this effort? In the interim we do not support preserving the Connector’s services with a sustainability fee assessed by the State across all health insurance policyholders. Maybe Hawaii’s Federal grant could be extended through 2015 to model how to transform State exchanges to more modest arrangements in states that are close to market “saturation” in health insurance. The strategic problem should be the focus of our efforts, and with a better fix we would know how to structure the Connector for the long term. Regarding restructuring proposals, on February 26th Attorney General Loui testified on many of the legal problems associated with earlier versions of this bill, and it appears to us that the HD3 version of the measure has adequately addressed these concerns. Among other things, apparently the Connector will move along as a nonprofit. However, we hope the Attorney General will continue to review potential issues with all versions of all Connector bills, to avoid making a difficult Connector operation even more difficult. The plethora of advisory boards proposed in the bill is well and good, since they represent various stakeholders who can provide useful advice to the Board. Based on the Attorney General’s opinion, we think the proposed Legislative oversight committee offers value only as a short-term group that should be limited to keeping the Legislature fully informed of the trajectory of the Connector, so we note with satisfaction that this group would be dissolved on June 30, 2018. We have one suggestion for consideration as to controlling costs. We do question whether having insurance agents and brokers enroll individuals and employers through the Connector is worth the associated commission expense, since the target market is relatively small, the Connector already employs well-trained navigators, and there are a limited number of products offered to customers. If permitting these parties to enroll individuals is not a legal requirement, let’s consider abandoning this idea. Regarding Section 5, (b) Board membership, we remain unalterably opposed to having dental insurers and health insurers appointed to the Board of Directors and call upon the Legislature to remove the provision for dental benefit providers in Section 5, (b). League has repeatedly called for removing such egregious conflicts of interest. Thank you for the opportunity to submit testimony.