- Associated Press - Wednesday, April 16, 2014

HONOLULU (AP) - Hawaii’s Department of Human Services may seek about $4.9 million from the Legislature next year to cover money owed by the state’s troubled health insurance exchange, agency officials told state lawmakers Wednesday.

Director Patricia McManaman told state senators during an informational hearing that the department would probably pay back the state if it asks for the funds.

Coincidentally, the Department of Human Services also owes money to the Hawaii Health Connector, because the entities wind up fielding requests from the public about each other’s services and are required to charge each other for that work. For example, people sometimes call the Department of Human Services thinking they qualify for Medicaid. But if they don’t qualify, they’re directed to the Connector.

The two entities can’t just call it even because their money comes from different federal funding sources.

The Hawaii Health Connector hasn’t formally requested its payment from the Department of Human Services, McManaman said. “We have encouraged them to complete the process,” she said.

The state will not have extra money for emergency appropriations in the next session without making cuts, said Sen. Ronald Kouchi, D-Kaua’i-Ni’ihau.

“The priority should have always been working on the going-forward sustainability plan, because it was clear that enrollments were going to fall short,” Kouchi said.

The confusion left lawmakers with lot to muddle through in a short period of time.

“Has somebody looked at the total cost on the state side and the Connector side, so we understand what the total state funding is?” asked Sen. David Ige, chairman of the Senate Ways and Means Committee.

That question is being worked out as the state works on an application for an “innovation waiver,” which could relieve Hawaii of some federal requirements under the Affordable Care Act.

“If there are ways to eliminate redundancy, that could be a major factor,” said Tom Matsuda, interim director of the Hawaii Health Connector.

But even if the state is granted that waiver, it won’t go into effect until 2017.

Until then, the Hawaii Health Connector needs about $4.7 million next year and up to $9 million the year after to be financially viable, officials said. Lawmakers are considering giving the exchange taxpayer money or charging insurers a fee to support the exchange.

“That will help us buy time to work through the more long-term plans, to figure out how we can reduce overall expense and functionality even more,” Matsuda said.

Some senators expressed frustration over lack of clarity about the Hawaii Health Connector’s budget and expenses.

“Mr. Matsuda, you’re asking for the Legislature to give more money to buy time, but there’s no certainty that this is ever going to be sustainable,” said Sen. Sam Slom, R-Honolulu.

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