Requires the Department of Health to conduct a three-part study to determine the best method of establishing a state program of long-term care. (SB1534 HD1)

A BILL FOR AN ACT

SECTION 1. The legislature finds that the future of long-term care for Hawaii's senior and adult disabled population is one of the most critical health issues facing Hawaii in the twenty-first century. The rapid growth of the elderly and disabled populations will result in extraordinary demands on the delivery of long-term care services. While the majority of persons receiving long-term care are older adults, entire families are affected by the psychological, financial, and social costs of long-term care provided to those who are limited in the activities of daily living. To accommodate the demands of caregiving that grow as dependency increases over the years, caregivers reduce work hours, adjust or abandon career and personal goals, and retire earlier than intended, lowering their own pension and retirement benefit levels. Caregivers are apt to be in poorer health than members of the general population, and often need care in their advanced years. Caregivers must be assisted by creating a network of support services including respite care and other support to alleviate the grinding responsibility of providing daily care for those who require it.

When nursing home care is necessary, Hawaii's families are burdened with average annual nursing home charges that exceed their ability to pay. In the case of elderly families, these charges are twice their average annual disposable income, threatening with impoverishment those who are otherwise self-sufficient. Thus, it is not surprising that approximately eighty per cent of all nursing home residents are dependent on Medicaid, an entitlement program for persons with limited income and assets.

Persons sixty years-of-age and older presently account for almost one-fifth of the adult population in the State. By 2020, they will constitute more than one-fourth of Hawaii's adult population. Nearly one-third of this segment alone is expected to have functional disabilities. Although families have expressed a preference for home and community-based care, these services and nursing home beds are currently below requisite levels. The average cost for one year of nursing home care has been estimated to eventually be in excess of $200,000 per person.

However, nursing home care is only one component of the array of long-term care services that has been developed. Due to cost factors, it is likely that home and community-based services will become more predominant. These services are provided in and outside the home and are appropriate for those who do not need to be institutionalized. In fact, an important function of home and community-based services is to prevent institutionalization. Home and community-based services consist of a number of different modalities, some or all of which may be used by the individual. These services include adult day health services, case management services, environmental modifications, homemaker services, personal care services, personal emergency response systems, respite care services, skilled nursing services, transportation services, and similar services.

While home and community-based services can provide care that is less costly than institutional care, it is still expensive. Although the legislature believes in a free market economy, the private sector has not been able to develop adequate financing mechanisms that appeal to the general population. The insurance industry needs encouragement in providing home and community-based service options in their long-term care coverage. Purchasers of such insurance also need to be informed of home and community-based service options as an alternative to nursing home care. The general public must be effectively educated and encouraged to purchase long-term care insurance, possibly by offering tax incentives in the form of deductions or credits.

SECTION 2. Long-term care study. (a) The department of health shall contract for a three-part study to determine the best method of establishing a state program of long-term care that serves the largest number of people possible. Part I shall include models of at least three alternative approaches to providing long-term care for the people of Hawaii. At a minimum, models of the following approaches shall be considered:

(b) To the extent possible, the long-term care program models included in part I of the study shall be designed to achieve the following objectives:

(c) Part II of the report shall be an actuarial analysis of the alternatives described, with parameters set to allow evaluation of the comparative costs and the relative feasibility of implementing each of the various models in Hawaii in the near future.

(d) Part III of the report shall include a department of health evaluation of parts I and II of this study. The evaluation shall consider the feasibility of the various approaches including the cost, actuarial soundness, and ease of administration of each approach or combination of approaches, as well as the comparative ability of each approach or combination of approaches, to provide appropriate long-term care to the largest number of people. Part III shall also include draft legislation to establish the preliminary outlines of a long-term care program, for introduction in the regular session of 2003. The draft legislation may mandate additional studies for the purpose of monitoring, evaluating, or extending the program established.

SECTION 3. Study contractors. For purposes of this study, the department of health may contract with one or more consultants and advisers, excluding legal consultants, who have demonstrated expertise in long-term care actuarial analysis at the national level. Contractors shall be selected through a competitive process under section 103D-302 or section 103D—303, Hawaii Revised Statutes. Selection criteria shall include the contractor's:

State agencies shall cooperate with the department of health’s contractor for the purpose of providing facts, figures, data, projections, estimations, and other information needed for the study. The scope of consultant services under the contract shall include the provision of advice to the department of health for the purpose of drafting long-term care legislation under section 4 of this Act.

SECTION 4. Findings, recommendations, and draft legislation. The consultants contracted under this Act shall submit a report of findings and recommendations to the governor and the legislature no later than November 15, 2002. Based on that report, the department of health shall, with the advice of the consultants, draft legislation for introduction in the regular session of 2003.

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $250,000 or so much thereof as may be necessary for fiscal year 2001—2002 to hire consultants for the purposes of this Act. The appropriation authorized in this section shall not lapse at the end of the fiscal year for which the appropriation is made; provided that any remaining balance of the appropriation that is not expended or encumbered as of June 30, 2003, shall lapse as of that date.

SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $10,000 or so much thereof as may be necessary for fiscal year 2002—2003 for the purpose of conducting one public briefing on each of the islands of Oahu, Kauai, and Maui, and two public briefings on the island of Hawaii, concerning the long-term care study findings and recommendations pursuant to section 1 of this Act.

The sums appropriated shall be expended by the department of health for the purposes of this Act.

SECTION 7. This Act shall take effect on July 1, 2001.