Hawaii Lawmakers Raise Concerns Over Proposed HMSA-HPH Merger

State legislators question potential impacts of the vertical integration between the state's largest insurer and health care system.

Apr. 9, 2026 at 10:05am

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A translucent, ghostly X-ray photograph revealing the internal structure of a medical stethoscope, symbolizing the complex web of Hawaii's health care system.An X-ray view of the interconnected components of Hawaii's health care system, as state lawmakers scrutinize a proposed merger that could reshape the industry.Honolulu Today

State lawmakers in Hawaii continued to raise concerns over the proposed partnership between the state's largest health insurer, Hawaii Medical Service Association (HMSA), and one of its largest health care systems, Hawaii Pacific Health (HPH). They expressed lingering worries about the potential unfair advantage and conflicts of interest that could arise from the vertical integration under the new entity, One Health Hawaii, and whether it would lead to higher costs and reduced access for patients.

Why it matters

The HMSA-HPH deal has drawn intense scrutiny from state legislators who are concerned about the market power and potential anti-competitive effects of combining the state's largest insurer and one of its largest health care providers. There are fears that the merged entity could cherry-pick healthier patients, leaving other providers to care for higher-cost, more complex patients and ultimately leading to higher costs for consumers.

The details

During a two-hour briefing at the state Capitol, lawmakers questioned how the competing interests of an insurance company and a medical provider could coexist within the same entity. They also raised concerns that One Health Hawaii could use its market dominance to steer patients towards its own facilities and services, potentially disadvantaging other health care providers in the state. HMSA and HPH have argued that the partnership would improve coordination of care and reduce administrative burdens, ultimately leading to over $2 billion in savings over 10 years that could be reinvested into the community. However, other major players in Hawaii's health care landscape, such as The Queen's Health Systems, have spoken out against the deal, calling it a monopolistic merger that would give HMSA and HPH an unfair advantage.

  • In January 2026, HMSA and HPH first announced their proposed partnership.
  • In February 2026, HMSA and HPH met with the Honolulu Star-Advertiser Editorial Board to discuss the deal.
  • On April 9, 2026, state lawmakers held a briefing to continue questioning the proposed HMSA-HPH partnership.

The players

Ray Vara

CEO of Hawaii Pacific Health (HPH).

Dr. Mark Mugiishi

CEO of Hawaii Medical Service Association (HMSA).

Scot Matayoshi

Chair of the Hawaii House Committee on Consumer Protection and Commerce.

Jason Chang

President and CEO of The Queen's Health Systems, another major player in Hawaii's health care landscape.

Angus McKelvey

Hawaii state senator who introduced a bill to establish state oversight of health care mergers and acquisitions.

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What they’re saying

“I think we're all concerned that on the commercial side there are going to be incentives to essentially be cherry-picking, to siphon off healthy patients — intentionally or not — to the One Health system and then hurt the Hawaii health care system as a whole.”

— Scot Matayoshi, Chair, Hawaii House Committee on Consumer Protection and Commerce

“This is not just vertical integration or a partnership. This is a merger. So you think about the executive making decisions, you know, having one legal counsel or one CEO at the top making decisions for the two prospective organizations. To me, it's a conflict of interest.”

— Jason Chang, President and CEO, The Queen's Health Systems

What’s next

The proposed HMSA-HPH partnership is currently undergoing review by the U.S. Department of Justice, the state insurance commissioner, the state Department of the Attorney General, and the State Health Planning and Development Agency. Regulatory approval is still pending.

The takeaway

The HMSA-HPH merger has raised significant concerns among state lawmakers and other health care providers in Hawaii about the potential for anti-competitive effects, conflicts of interest, and higher costs for consumers. The outcome of the regulatory review process will be crucial in determining the future of health care in the state.