A number of state-run PPACA health insurance exchanges have beenstruggling over the last year-plus. In fact, state-run healthinsurance exchanges in Oregon, Maryland, New Mexico, and Nevadahave either permanently shut down their operations or have done sotemporarily and are contemplating some attempts to relaunch them.Colorado, Minnesota and Vermont are now also considering abandoningtheir state programs.

One of the victims of these failures and potential failures inthese states is the Small Business Health Options Program (SHOP), aprogram that was designed as part of the PPACA to help smallbusinesses access affordable health insurance for theiremployees.

In late May, Hawaii's health insurance exchange became thelatest one to bite the dust, taking its SHOP with it. The federalCenters for Medicare and Medicaid Services (CMMS) began restrictinggrant funds to the state's Health Connector two months ago, aftertelling state officials that the program was out of compliance withthe Affordable Care Act due to fiscal instability and ongoing ITissues. One of these IT issues involved SHOP. According to a May 15article published by Fox News, "The Connector's Small BusinessHealth Options Program, targeted at small business owners, sentgarbled data to insurers, preventing them from signing up smallbusinesses and their employees."

In mid-May, Hawaii's Health Connector began making contingencyplans in case the system did shut down entirely (which it did aweek later), to transition operations to the federal government.The plan directed that no new enrollees would be accepted by thelocal exchange after May 15. In addition, outreach services wereset to conclude May 31, and the 73-member workforce will be laidoff by February 28, 2016.

The Fox News article noted that the exchange was riddled withtrouble from the start. "The web portal never worked properly,despite the state spending $74 million on a contract to build andmaintain it. The exchange experienced tremendous staff turnover,with three executive directors appointed in two years."

In addition, enrollment reached just over 8,500 in the firstyear, and, as a result, the Hawaii exchange ended up being rankedas the most costly in the nation, at almost $24,000 per person.

A May 8 article appearing the The Washington Times, prior to theactual shutdown, noted that a federal takeover of Hawaii's HealthConnector could also threaten the state Prepaid Health Care Act, alaw that requires employers to subsidize health insurance."Currently, the feds have acknowledged that, on the SHOP side, theywouldn't be able to accommodate the Prepaid Health Care Act plans,"said Gorton Ito, Hawaii's insurance commissioner.

Correction: An earlier version of thisarticle erroneously stated that Massachusetts had permanently ortemporarily shut down their health insurance exchanges.