A 40-year veteran at HMSA, Gold has led the local insurance giant since December 2012 as the healthcare industry undergoes a sea change.
In a recent op-ed, you wrote that the state should try to close part of the Hawaii Health Connector. Why?
I was talking about the part of the Hawaii Health Connector, or the Hawaii Exchange, that deals with small businesses. I think people who aren’t immersed in it don’t really understand the real structure of the exchange. There are really two parts: the individual enrollment, where people who aren’t part of a business can enroll, and the part called SHOP, the Small-business Health Options Plan, for businesses with fewer than 50 employees. I was talking about that SHOP piece. In Hawaii, we have the Hawaii Prepaid Health Care Act (PHCA) that, since 1974, has mandated that every business has to offer health insurance to every employee who works at least 20 hours a week. It also says every employee has to take health insurance, which people don’t recognize sometimes.
So, essentially, everybody who’s working at least half time in Hawaii is covered under the PHCA. That’s not the case in the rest of the country, because not all employers offer health insurance to their employees, and the employees don’t have to take health insurance. Therefore, there are a lot of people without health insurance and without real economic access to healthcare. That’s one of the reasons for the Affordable Care Act. But, in Hawaii, that’s not the case. In Hawaii, everybody who works for an employer is mandated to have coverage and has coverage now.
But why close SHOP?
Because everybody already has coverage – most people have HMSA or Kaiser. Now, when the employer goes to the exchange, he buys exactly the same coverage he used to buy, and his employees have exactly the same choices they used to have, except now they have to go through the exchange, and the exchange collects a 2 percent fee. So, what you’ve done is increase the costs of healthcare for these people who already have coverage. It’s simply a cost burden.
SHOP doesn’t fit the Hawaii model of healthcare, which is a very good model. We have almost universal coverage. The real benefit, so far, of ACA for Hawaii, has been the enrollment we’ve been able to achieve through the Quest Program, which is Medicaid. That’s closed the gap in the uninsured even more, but those people enroll in Medicaid, not private carriers. There have also been a few thousand people – not a lot – who’ve enrolled in the individual portion of the connector. That’s also been somewhat of a success. We’re not saying shut that down, because there are individuals out there who don’t work. These are people who didn’t have access under the PHCA. But, going into this, probably 90 percent to 92 percent of Hawaii residents already had health insurance, even before ACA. We picked up, I would guess, three or four percentage points more people. But even that’s not due to the SHOP section of the connector, because those people already had coverage. They’re simply moving the coverage they already had and increasing the fees.
Why do you think your suggestion to close part of the connector drew such criticism from some legislators?
They gave me grief because I said we ought to go immediately and seek an exemption from having to comply with the SHOP portion of the ACA. They said they tried that already, they had talked to the congressional delegation and were told we wouldn’t be eligible for the exemption immediately; we’d have to wait until 2017. That’s when the law says you can seek waivers from certain requirements of the ACA. I don’t know if that’s true or not, but I do know that I’ve talked to people in Washington and they’re more than willing to listen to the argument. I’ll just leave it at that. I think they’re willing to listen; it just depends on how you ask the question.
Some criticism also seemed to suggest HMSA was feathering its nest by trying to avoid competition in the exchange.
I think that criticism is totally backward. First of all, there isn’t going to be any competition. Right now, there’s only Kaiser and us on the connector. Of our smaller local competitors, HMAA has already said it’s never going to go on the connector. It’s too expensive for a small carrier. In Hawaii, only HMSA and Kaiser could afford it, and the national players are really not going to come to Hawaii. If they were, they could have come already. The market’s not really big enough. HMSA and Kaiser are very strong in this market. Both of us do a very good job. A national competitor isn’t going to come and invest in a market with 1.3 million people to try to unseat the top two carriers or to be No. 3. It’s not going to happen.
More important, if there were an exchange and you got every small business to go through it, they could only choose between HMSA and Kaiser, because nobody else is going on the connector. If there were no connector, though, businesses could choose whomever they wanted. They could choose HMAA, which isn’t going on the connector. They could choose UHA, which isn’t going to go on the connector. They could choose United, which isn’t going to go on the connector in Hawaii. So, my critics actually have it backward. Not having the exchange actually makes us less competitive. But it’s the right thing to do.
This interview has been edited for conciseness and clarity.