HI Average daily benefit purchased: $ 162 per day.

The state of Hawaii’s population is over 1.3 million people, and as the US Census shows, close to 200,000 residents in the Aloha State are 65 years or older. That’s over 200,000 residents and counting who will increasingly need and use Long Term Care. If not prepared with Long Term Care Insurance, this rising number of seniors will put increasing economic stress on families and the state of Hawaii. In 2011, the total Long Term Care Medicad expenses in Hawaii were over $110 million.

The good news is, there are around 17 long term care insurance companies available for Hawaii residents to choose from when planning for their future financial and long term care needs.

For more information on long term care insurance in Hawaii, refer to this report developed by RTI International for the Hawaii Long-Term Care Insurance Commision.  This report provides a detailed discussion of ways in which the State may balance the growing long term care needs of Hawaii’s seniors and state/personal budgets. Below are the seven main issues/recommendations listed in the report:

1) Treat the Risk of Needing Long-Term Care as a Normal Life Risk
Although not often explicitly discussed, perhaps the most important goal of reform is for society to treat long-term care as a normal risk of living and growing old. Fully 69 percent of people who turned age 65 in 2005 will have some long-term care needs before they die; among the 35 percent of older people who will spend some time in a nursing home before they die, about half will reside there for a year or longer (Kemper, Komisar, and Alecxih, 2005/2006). The
large expenses of long-term care should not come as an unpleasant surprise that causes severe financial distress to individuals and their families. Currently, the problem of coping with chronic illness and disability is compounded by worries about paying for care. Older people and others fear that if they need long-term care, they will become a burden on their family. People should know how their long-term care expenses will be paid. Mechanisms need to be established so that
people will know how to pay for services should they need them.

2) Protect Against Catastrophic Out-of-Pocket Costs
With very little public or private insurance coverage against the high costs of long-term care, it is not surprising that users of long-term care services often incur very high out-of-pocket costs. The average private pay cost for a year in a nursing home in Hawaii was $132,860 in 2010 (MetLife Mature Market Institute, 2010). In the Hawaii Long-Term Care Survey conducted for the Commission, about three-fifths of respondents said that they could not afford to pay any of the cost of a year in a nursing home or 24-hour home care (Khatutsky et al., 2010). The costs of long-term care can easily impoverish people with long-term care needs.

3) Prevent Dependence on Welfare in the Form of Medicaid
A separate but related goal is to prevent people who have been financially independent all their lives from depending on welfare -Medicaid- at the end of their lives. Most people believe that only a small proportion of the population should receive welfare. Yet, in 2010, 70 percent of nursing home residents in Hawaii had their care paid by Medicaid (American Health Care Association, 2010). A substantial portion of Medicaid nursing home residents were not eligible
for the program when they were living in the community and turned to Medicaid because they had impoverished themselves paying for long-term care. Medicaid financial eligibility rules are very strict. For example, individuals in Hawaii with more than $2,000 in financial assets are ineligible for Medicaid (Walker and Accius, 2010).

4) Improve Access to Long-Term Care Services

Access to long-term care services in Hawaii is to be limited. On a population basis, the supply of nursing home care is half the supply in the country as a whole (O’Keeffe and Wiener, 2010). Partly as a consequence, according to some observers, some people needing high levels of care have difficulty gaining access to services, forcing them to remain in acute care hospitals. Similarly, although the Medicaid QUEST Expanded Access demonstration appears to be expanding access to home and community-based services, Hawaii’s Medicaid spending on home and community-based services per 1,000 people aged 75 and older has historically been much less than the national average (O’Keeffe and Wiener, 2010). Hawaii’s many islands impede access to long-term care services; people are not able to travel from island to island to receive long-term care. To the extent that they must do so, then they are separated from their family and
friends.

5) Make the Long-Term Care System More Responsive to Consumers
The financing and delivery of long-term care services in Hawaii and most other places in the United States are fragmented, with a confusing array of programs, funders, eligibility rules, and provider types. For example, Medicaid is the dominant funder, but a very limited amount of long-term care is also funded by Medicare, Kupuna Care, the Department of Veterans Affairs, the U.S. Office on Aging, and other state programs. One of the goals of Medicaid’s QUEST Expanded Access is to create a more seamless system by making one organization responsible for all Medicaid medical and long-term care services for an individual. Similarly, Hawaii’s Aging and Disability Resource Center seeks to provide consumers with a ‘one-stop shop’ for information about long-term care resources, but its services are still fairly underdeveloped, although initiatives are underway to improve them. Closely related to these activities is the movement to consumer-directed home care, which gives consumers rather than agencies the right to hire, train, schedule, supervise, and fire their workers (Foster et al., 2003; Schore, Foster, and Phillips, 2007; Wiener, Anderson, and Khatutsky, 2007).

6) Change the Balance of Institutional and Home and Community-Based Services
The overwhelming majority of people who need long-term care live in their homes and want to stay there. In the Hawaii Long-Term Care Survey, only 4 percent of respondents said that they want to be cared for in a nursing home and only 12 percent want to live in assisted living or small group homes (Khatutsky et al., 2010). The overwhelming majority of people want to be cared for at home, either by friends and relatives or home care providers. Despite these preferences, public expenditures for long-term care for older people are overwhelmingly for nursing home rather than home care. Few data are available to evaluate how the demonstration program is performing, but nursing home use appears to have dropped somewhat and home and community-based services use has increased significantly.

7) Design an Affordable System, Both to the Individual and Government
Political reality dictates that any reforms be ‘affordable’ to both users and tax payers. Although there is little consensus about how much society is willing to pay for long-term care services, there is little doubt that raising taxes to pay for a public program is always difficult, even for popular programs like Social Security and Medicare.

With the aging of the population in Hawaii and nationally, demand for long-term care will increase, as will public and private expenditures. Reforming the system will require additional resources and a key issue is how to obtain them. Additional funding for long-term care can be obtained through general revenue taxes, private insurance, or public insurance. Another key issue is how to convince people to either prepare financially so they can afford to pay privately to meet long-term care needs or to be willing to pay more taxes to support public programs that provide long-term care services.