For many states, the awareness of the need to care for aging populations is particularly acute. For places like the state of Hawaii, whose population of those 75 and older is rising relatively quickly compared to other states, long-term care for the elderly is an important political and social issue. According to Rachel M. Cohen, writing for The America Prospect, while the nation saw a 47% increase of people over 75 between 1990 and 2012, Hawaii saw a 116% increase of people over 75 in that same time period. Thus, Hawaii’s initiatives in healthcare for the elderly are potential paradigms for the nation.
This would consist of a $70-per-day benefit for all residents of Hawaii, gaining its funding from a tax.
Hawaii is on the edge of debating a public long-term care insurance plan in the 2016 state congressional session, according to Howard Gleckman, writing for Forbes. This would consist of a $70-per-day benefit for all residents of Hawaii, gaining its funding from a tax. State Senator Roz Baker will introduce the measure, which is similar to others she has introduced in the past seeking to provide more assistance for healthcare for the elderly. This time, however, the measure may pass, although tax increases are generally unpopular.
The Financial Mechanics
The tax would add .5% to Hawaii’s 4% General Excise Tax. The money from this tax would then go to a trust fund and be managed by an independent board. After five years, the benefit would begin to be paid to residents. All legal residents of Hawaii could apply for this, so long as they need assistance with more than two daily tasks per day, such as bathing, eating, cleaning their homes, etc.
What the Benefit Will Do
This is a program specifically designed to pay for long-term care or assist with long-term care costs. Caregivers and seniors know that these costs can sometimes be prohibitively high, meaning that any aid will provide more care for those who need it but cannot afford it. This $70-per-day benefit applies for 365 days a year, and looks to solve more than just the problems of the elders themselves. A report from the Hawaii Department of Health sees this benefit as a way to help baby boomers save for their own eventual care needs, rather than sinking all of their savings into caring for their parents; they also see benefits for employers, who will find that employees who have more and better care for their loved ones are less stressed, more productive, and less likely to be absent than employees who are shouldering the burden entirely by themselves.
Hawaii also experiences a mixture of homelessness and poverty that may be partially alleviated by this benefit, since, according to the aforementioned report, many homeowners must liquidate (sell) their homes in order to pay for long-term care. This leaves many of them vulnerable to severe financial crisis, such as unemployment or sudden illness, with no financial assets on which to rely. After the recession that began in 2008, many families do not have the savings to spend thousands on medical care for their elderly loved ones. The financial burden of this care may leave many unable to properly recover from the recession and participate in the upswing in the national economy.
What This Means for Americans outside of Hawaii
For those of us on the mainland, this is an intriguing story to watch. The American Prospect calls it a “National Model,” one that will be very telling to other states, depending on its success. Other states such as Minnesota have been having this debate–whether to create a public program for long-term care, reform private insurance, reform tax law on savings and retirement, etc.–but Hawaii would be the first to take action. Around the country, eyes are on this measure to see if it passes, and, if it does, whether or not it is successful and financially viable. If it is, we may begin to see other states adopting similar measures, especially those “blue” (more heavily left-leaning) states, where tax increases for social programs are generally more accepted. This is a debate to watch.
Gleckman, Howard. (January 15, 2016). Hawaii Is About to Debate a Public Long-Term Care Insurance Program. Forbes.com. Available at http://www.forbes.com/sites/howardgleckman/2016/01/15/hawaii-is-about-to-debate-a-public-long-term-care-insurance-program/#2715e4857a0b69907a503e53.
Nitz, L. H. (December 15, 2014). The Feasibility of a Long-Term Services and Supports Social Insurance Program for Hawaii. State of Hawaii Department of Health: Executive Office on Aging. Available at https://www.hawaiiadrc.org/Portals/_AgencySite/LTSS/LTSS_2.pdf. Retrieved 1/19/2016.
Cohen, Rachel M. (January 12, 2016). Hawaii Long-Term Health-Care Bill Serves as National Model. The American Prospect. Available at http://prospect.org/article/hawaii-long-term-health-care-bill-serves-national-model. Retrieved 1/19/2016.
Healthtrends.org. Health Trends in Hawaii. Demographics. Elderly Population Growth in Hawaii. Hawaii Medical Service Association Foundation. Available at http://www.healthtrends.org/demo_elderly_pop.aspx. Retrieved 1/19/2016.