STAND. COM. REP. NO. 617

Honolulu, Hawaii

, 2005

RE: H.B. No. 97

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Health and Human Services, to which was referred H.B. No. 97 entitled:

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

beg leave to report as follows:

The purpose of this measure is to provide a long-term care refundable tax credit for individual taxpayers with long-term care insurance premium costs.

Your Committee finds that the rapid growth of the elderly and disabled populations will result in extraordinary demands on the delivery of long-term care services. 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. While the majority of persons receiving long-term care are older adults, entire families are affected by the psychological, financial, and social costs of providing long-term care.

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 annual cost for nursing home care has been estimated to eventually reach 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.

This bill assists families with their long-term care needs by encouraging the purchase of long-term care insurance and providing a tax credit for their long-term care insurance premium costs.

Your Committee has amended the bill by substituting the individual long-term care tax credit with another version proposed by the Governor's Long-Term Care Task Force. Your Committee has also enhanced the bill by adopting, for the most part, the Task Force's tax credit proposals for employers who purchase long-term care insurance for their employees. Your Committee finds that these tax credits will provide the necessary impetus to address the long-term care concerns of both the community and the workplace.

Technical nonsubstantive comments are marked on the bill itself. We recommend that these changes be made only if the Committee decides to make other substantive amendments to the bill.

As affirmed by the records of votes of the members of your Committees on Health and Human Services that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 97, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 97, H.D. 1, and be referred to the Committee on Finance.

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

 

____________________________

ALEX M. SONSON, Chair

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DENNIS A. ARAKAKI, Chair