Health Insurance Challenges in Hawaii

Shelley Oates-Wilding, a former Olympian now leading a nonprofit in Honolulu that teaches ocean sports to young people, finds the U.S. health care system quite perplexing.

At 60, she has directed the Ikaika Hawaii Waterman’s Academy for years and has been trying to secure affordable health insurance for over a decade. She initially explored the Affordable Care Act marketplace but found it to be prohibitively expensive.

This year, her monthly premiums jumped from $900 to $1,200, and there are expectations for another rise next year. “For the past two months, I’ve been out of pocket,” she noted. “I had to drop my insurance due to the high costs.”

Through her church community, she discovered Medi-Share, which allows members to contribute about $300 monthly to a health savings account. Oates-Wilding represents many in Hawaii facing challenges with health insurance or accessing federal programs like Medicare or Medicaid without employer-sponsored options.

Interestingly, Hawaii maintains a low overall uninsured rate, thanks to its Prepaid Health Care Act from 1974 that mandates private employers to provide insurance for employees working over 20 hours weekly for at least four consecutive weeks. Yet, some individuals still fall through the cracks.

Nationwide, approximately 24 million Americans participate in the ACA marketplaces, often depending on federal subsidies to make insurance manageable. In Hawaii, around 23,000 to 24,000 residents are included in this figure.

The Kaiser Family Foundation (KFF) reports that about half of U.S. adults under 65 are employed by small businesses, including freelancers and gig economy workers, who are bracing for premium hikes.

A heated debate over renewing tax credit expansions from the 2021 American Rescue Plan saw Congress embroiled in a standoff, resulting in a 43-day government shutdown. While that situation concluded on November 12, the tax credit extension didn’t make it into the resolution, with another vote anticipated in December.

Looking at Coverage Options

According to KFF, ACA premiums may rise by an average of 30% in 2026, influenced by various factors like increased hospital costs and expensive medications. If the tax credit, set to expire December 31, is not extended, monthly premiums might exceed double their current rates based on age, income, and plan specifics.

Sarah Fairchild, an independent contractor with the Duke Kahanamoku Foundation, has been eligible for the ACA exchange for about six years. She recently found out her premium would double next year. “It’s definitely going to increase,” she remarked.

As costs escalate, she might have to negotiate a higher contract rate since the ACA exchange remains her best health insurance option.

For Ashiya Carter, a professional dancer, grappling with health care has been an ongoing challenge. At 47, she teaches dance and reading to children and previously relied on a nonprofit for insurance. After becoming an independent contractor, she realized how costly health care could be.

Initially, she opted out of insurance due to affordability, banking on her good health. However, after becoming pregnant, she applied for insurance through Med-QUEST, Hawaii’s Medicaid program, which now also covers her two children. Still, she struggles to find local providers who accept her insurance.

Carter is also anxious about potential changes to Medicaid and upcoming work requirements, although specifics remain unclear.

Impact on Independent Contractors

Between 30,000 to 40,000 individuals in Hawaii could be affected by new regulations linked to the “Big Beautiful Bill,” as termed by President Trump. Lance Owens, president of Hawaii Realtors, highlights the nature of real estate agents as independent contractors who need to secure their own insurance, spending around $1,160 monthly on coverage through Kaiser Permanente.

Owens, who turns 65 next month and will qualify for Medicare, recalls taking risks with his health coverage in his younger years—a gamble that, fortunately, did not lead to serious consequences. He, like others, felt the impact of premium hikes following the ACA’s rollout.

Advocacy director Hunter Havelin from the Hawaii Farmers Union noted concerns about health insurance among farmers. The fluctuating income due to seasonal work makes continuous coverage a challenge, prompting interest in medical subsidies or assistance.

The Broader Implications

Health experts worry that rising ACA premiums could push individuals to forgo insurance altogether, potentially overburdening emergency services and raising costs for everyone involved.

Holly Kessler, executive director of the Hawaii Small Business Chamber of Commerce, expressed concern regarding the potential expiration of ACA tax credits. These credits have significantly eased insurance costs for many, particularly entrepreneurs and self-employed individuals lacking traditional employer coverage.

Providing health care in Hawaii’s expensive environment is already tough for small businesses, especially those unable to utilize federal tax credits. However, Hawaii’s Prepaid Health Care Act helps mitigate this by establishing a fund for affordable insurance options.

Oates-Wilding, who represented Australia as an Olympian, is passionate about her nonprofit’s mission and emphasizes the importance of health in her life. With Australia’s universal health care system, she wishes the U.S. system would directly provide funds to individuals rather than funnelling money through insurance companies.

Carter, meanwhile, imagines a collective effort among independent artists to obtain health insurance—something that organized unions in other states promote. “For many of us who teach and work in art, we might not earn the highest pay,” she said, “but we truly love our work and strive to keep it going.”

Snapshot of Hawaii’s ACA Marketplace

• Approximately 23,000 to 24,000 residents enrolled in the ACA, comprising less than 2% of the state’s population.
• Enhanced federal subsidies cap ACA health insurance costs at no more than 8.5% of an individual’s income — lower percentages for those earning less.
• Without extended subsidies, ACA health insurance premiums could more than double.
• Households above 400% of the federal poverty line won’t qualify for aid and would bear full insurance costs, with a threshold set at around $72,140 for individuals in Hawaii.
• A 60-year-old earning 401% of the poverty line could face a projected increase of about 125%, equating to roughly $638 monthly without the subsidies.