Hawaii's health insurance exchange announced on Friday that it will be shutting down, and its nearly 40,000 enrollees will be transitioned to the federal Obamacare marketplace, Healthcare.gov.
The private, nonprofit Hawaii Health Connector, which has been embattled from its inception, has not generated “sufficient revenues to sustain operations,” according to the office of Hawaii Gov. David Ige (D).
The state invested $130 million in the Connector, but the exchange has been plagued by low enrollment numbers and technological issues, making it noncompliant with the federal requirements outlined in the Affordable Care Act.
“It was a failed project," state Sen. Sam Slom (R) told the Honolulu Star-Advertiser. "It was a boondoggle from the very beginning, and our residents deserve better than that.”
According to Hawaii Health Connector CEO Jeff Kissel, Hawaii's health exchange will become a state-run exchange that uses HealthCare.gov, which is similar to the setup in Nevada, New Mexico and Oregon.
"The viability of state health insurance exchanges has been a challenge across the country," Ige said in a statement, "particularly in small states due to insufficient numbers of uninsured residents."
Under Hawaii's Prepaid Healthcare Act of 1974, businesses in the state are required to offer health insurance to employees who work more than 20 hours per week. As a result, Hawaii has consistently had one of the lowest uninsured rates in the country.
The Associated Press contributed to this report.
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