HONOLULU — Hawaii lawmakers may allow the state’s financially struggling health exchange to issue up to $28 million in bonds backed by the state.
The Senate passed a bill that would pave the way for the bonds on Tuesday.
If the bill becomes law, the Hawaii Health Connector would issue the bonds that would be paid back through revenues generated on the exchange. The bonds would be backed by the state’s emergency and budget reserve funds.
A similar proposal died in the Hawaii House after concerns were raised over the funding mechanism and the dollar amount.
The health exchange is currently unable to sustain itself financially. The CEO of the Hawaii Health Connector, Jeff Kissel, has said the nonprofit organization could be sustainable by fiscal year 2018 or 2019, but until then it would run deficits totaling nearly $18 million. Its sustainability plan hinges on its ability to enroll 130,000 people over the next four years — adding about 30,000 per year — which critics have called unrealistic. The Legislature granted $1.5 million to the Connector last year to help it stay afloat, after the organization collected about $121,000 in fees, far below the $1 million it anticipated in its budget.
“This is a way for the dying and failing Hawaii Health Connector to get money that it does not deserve from the taxpayers of this state,” said Republican Sen. Sam Slom, who voted against the proposal.
Democratic Sen. Rosalyn Baker defended the proposal, saying the Hawaii Health Connector has improved under Kissel’s leadership.
“It has made a remarkable recovery from a very rocky start that all of us acknowledge,” Baker said. “It has good leadership now. It has met its first measure of sustainability goals by enrolling 30,000 individuals.”
The bill, SB 1028, now goes to the House.