STAND. COM. REP. NO. 2963

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 1834
                                        H.D. 2
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committees on Health and Human Services and Commerce
and Consumer Protection, to which was referred H.B. No. 1834,
H.D. 2, entitled: 

     "A BILL FOR AN ACT RELATING TO LONG-TERM CARE,"

beg leave to report as follows:

     The purpose of this measure is to extend the actuarial study
on long-term care and clarify the requirements for the study,
extend the sunset date of the Joint Legislative Committee on
Long-Term Care (JLC), and make unspecified appropriations for the
JLC expenses.

     Your Committees received testimony in support of this
measure from the Executive Office on Aging, Coalition for
Affordable Long Term Care, Kokua Council, Healthcare Association
of Hawaii, Hawaii Catholic Conference, and Faith Action for
Community Equity.  Informational testimony was presented by the
State Insurance Commissioner.

     Your Committees find that the need for long-term care, which
is already significant, will continue to grow as Hawaii's
population ages.  Due to the high costs associated with long-term
care, more and more families can be expected to endure financial
hardships, and even impoverishment, unless a better method of
financing long-term care is developed soon.  Providing adequate
care for the aged and disabled is an economic burden for many
people.  Long-term care insurance policies offer a means of

 
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alleviating that load.  However, many people cannot afford those
policies and there are usually limits on services and duration of
benefits in coverages.

     This measure allows the JLC to finish its ongoing work that
commenced with Act 339, Session Laws of Hawaii 1997.  A major
portion of the JLC's work was accomplished with Act 93, Session
Laws of Hawaii 1999, which enacted the Long-Term Care Insurance
Model Act.  But, much more work needs to be done to explore the
mechanics of establishing a state-sponsored long-term care system
that is effective, cost-efficient, and covers the largest number
of people.  Your Committees believe that only a state-sponsored
system of long-term care, in some form, can adequately provide
for Hawaii's elderly and disabled.

     Although your Committees defer to the Committee on Ways and
Means as to the appropriation amount, your Committees believe
that the sum of $200,000 to $300,000, is necessary for an
actuarial study, depending on whether the JLC is required to
contract directly with a qualified actuary, or contract through a
third party that could subcontract with an actuary, assist the
actuary with gathering data and statistics in Hawaii, and in
general manage the scope of the actuary's work so that the
legislature can be assured that the actuary's product is
responsive to Hawaii's needs.  In either case, there needs to be
figures from a qualified actuary, and your Committees believe
that contracting with a third party is more efficient and
economical and would yield the same results.

     Your Committees have amended this measure by:

     (1)  Inserting a drop-dead date of 2002 for the JLC;

     (2)  Clarifying that the JLC contract for an actuarial study
          to determine costs;

     (3)  Clarifying the alternative models to be studied, by
          deleting reference to front-end and back-end universal
          programs and inserting comprehensive universal programs
          capped at the cost equivalent to three years of nursing
          home services;

     (4)  Deleting reference to models of other countries as
          being unnecessary in view of Act 93, Session Laws of
          Hawaii 1999, providing for the universal availability
          of long-term care;


 
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     (5)  Inserting a reporting date of 2001 for the actuarial
          study and a draft legislation date for introduction in
          the 2002 Regular Session;

     (6)  Inserting a fiscal year appropriation date of 2000-2001
          for the actuarial study appropriation, and deleting
          reference to an appropriation for the "fiscal biennium"
          which your Committees understand to be disallowed by
          the Department of Budget and Finance, however another
          appropriation could be submitted for the 2001 Regular
          Session as a supplement; and

     (7)  Deleting the appropriation for the expenses of the JLC
          to travel to the various islands, inasmuch as this
          would not occur until 2002, therefore an appropriation
          could be submitted for the 2001 Regular Session.

     Your Committees believe that this measure, as amended, is
concise, precise, and effective in achieving what the legislature
desires in the actuarial study.  As amended, this measure removes
much of the confusion and argument over the design of the State's
long-term care plan.  This measure is intended only to effect a
study to design a plan that will be subject to legislative
review, modification, and approval.

     As affirmed by the records of votes of the members of your
Committees on Health and Human Services and Commerce and Consumer
Protection that are attached to this report, your Committees are
in accord with the intent and purpose of H.B. No. 1834, H.D. 2,
as amended herein, and recommend that it pass Second Reading in
the form attached hereto as H.B. No. 1834, H.D. 2, S.D. 1, and be
referred to the Committee on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Health and Human
                                   Services and Commerce and
                                   Consumer Protection,



____________________________       ______________________________
BRIAN KANNO, Co-Chair              SUZANNE CHUN OAKLAND, Chair



____________________________
BRIAN T. TANIGUCHI, Co-Chair

 
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