What Hawaii’s health care costs could look like if its residents don’t get insurance
Posted On August 6, 2021
Honolulu — The state’s health insurance program, the HI HealthCare program, will likely be more expensive than it is now, according to an analysis of the state’s current cost structure.
The analysis by the Kauai-based health care consulting firm, the Urban Institute, suggests that the program’s current costs will exceed its projected revenues by at least $200 million in 2021.
The $200 billion estimate is based on assumptions about a $10.4 billion expansion of the program and $2.8 billion in costs related to cost-sharing reduction payments.
It also assumes that the federal government will pay nearly all the costs of the expansion.
The Urban Institute study is based upon an analysis done in early 2018 by the Institute of Medicine, which has since updated its projections.
The report has a range of estimates, but its biggest estimate is the $20 billion that the state will incur in 2021 if it continues to rely on the Affordable Care Act, which expanded Medicaid eligibility in 2020.
The cost of the expanded Medicaid program is not estimated in the report, which says the expansion will have a net benefit of $13 billion.
But the report says that the total economic impact of the expansions is more than $12 billion over the next 10 years.
HI Health Care is Hawaii’s only health care program, and it was established in 1996 to serve a population that has historically been under-insured and under-served.
The state had one of the highest uninsured rates in the nation when it expanded Medicaid in 2020, according the Urban Report.
The expansion helped Hawaii reduce the uninsured rate from 16.4 percent in 2020 to 6.4.7 percent in 2021, and the program now has a rate of about 10 percent.
The increase in enrollment came at a time when the state faced an economic downturn and was trying to meet state budget constraints.
In 2018, Hawaii’s unemployment rate hit 9.3 percent, up from 8.3 in 2020 and 7.5 percent in 2019.
The unemployment rate dropped to 8.1 percent in 2018.
In 2019, Hawaii was ranked fifth in the country for the percentage of its population with a disability, up three spots from 2016.
In 2021, the unemployment rate is expected to be 8.7, down from 10.9 in 2021 and 11.3 last year.
The U.S. Census Bureau reported that Hawaii’s economy grew by 3.9 percent in the second quarter of 2021.
But Hawaii’s job growth was not as strong as the U.K. and Ireland, the states with the highest unemployment rates in 2021 (15.4 and 16.5, respectively).
The report also found that the average monthly premium for an individual enrollee in HI Health care is $9,700, while the average premium for HI Health plan members is $1,900, and $1 for HI members in HI’s health plans.
The Honolulu Star-Advertiser reported in July that the HI program, which is funded by the state, would have a $1.4 million shortfall in 2021 due to the Medicaid expansion.
But an analysis by The Washington Post last month showed that Hawaii will be able to continue covering most of the costs through 2019, as the federal funding for the expansion is set to expire.
The HI Health program covers about 20 percent of the population, with about 50 percent of those enrolling in HI-approved plans.
About two-thirds of HI residents are eligible for Medicaid.
A total of 1.6 million people were enrolled in HI health plans in the fiscal year that ended June 30, 2021, according a Waikiki-based enrollment tracker, and HI Health plans cover more than 85 percent of eligible residents, according with the Kaiser Family Foundation.
The Affordable Care Care Act is projected to cost the state $5.4 trillion in 2021 to cover the expansion and its associated costs.
The Hawaii Health Care program covers nearly 50 percent.
But its overall costs are expected to increase because of a range the Urban study uses to estimate the expansion’s economic impact.
The study projects that the expansion alone would cost $9.2 billion in 2021 from 2021 through 2021, a $9 billion increase over 2021, with $3.9 billion of the increase coming from the expansion itself.
For each additional month that is added to the HI expansion’s projected enrollment over 2021 and 2021, an additional $2 billion will be spent, the report projects.
The total cost of HI’s expansion is estimated to be $8.2 million a month.
The average cost for a HI enrollee is $3,900 a month, according.
But, as of July 1, 2021 — the day before the expansion was expected to go into effect — the average cost of a HI resident in the state was $3 a month (a $1 increase over the $3 per month average of 2020).
And, as noted by the Waikikiki Star-advertiser, the average enrollment is about 60 percent of households.