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Hawaii missing its chance to promote long-term care insurance

By John Nakao

LAST UPDATED: 1:47 a.m. HST, Jun 5, 2011

Forty-three states have already implemented the federally-supported Partnership Program to limit the high and growing costs of long-term care to their expanding senior populations.

These states recognized the immediate need for long-term care services for their seniors and passed proactive legislation to financially incentivize citizens to own long-tem care coverage.

This protection pays for care in a policy owners' home or community, limits likelihood of nursing home stays and reduces the family burden of long-term care giving. It also saves money for policy owners and state and federal governments.

While Hawaii's Legislature attempts to reinvent the wheel with committees, consultants and studies, these 43 states have already adopted the Partnership Program, a collaboration of insurance companies and state governments that allows long-term care insurance owners to retain assets equal to the amount of long-term care coverage used, if later qualifying for Medicaid or health welfare.

A person, for example, who used $200,000 of his or her long-term care policy benefit, may retain $200,000 of assets, not needing to spend it down to qualify for Medicaid.

In addition, many states have passed long-term care policy tax-credits that are a dollar-for-dollar tax reduction to encourage long-term care policy ownership.

Programs encouraging long-term care insurance ownership help policyholders and the state and federal governments.

They allow policyholders to share the 70 percent risk of needing long-term care without depleting assets and burdening their families, while limiting the likelihood of Medicaid funding for long-term care purposes.

Because we have a crisis, the need for the Partnership Program and tax-incentives to encourage long-term care protection is critical and greatly overdue.

Of all states:

» Hawaii has the fastest-growing age 65-plus population.

» We enjoy the greatest longevity.

» We have one of the highest costs for long-term care services.

» About 90 percent of seniors are able to and want to "age in place" — get care in their own home or community rather than a nursing home.

» Over half of Hawaii's Medicaid budget (taxpayers' money) is paying for long-term care largely in the most expensive and least favored of care settings — nursing homes.

For these compelling reasons, Hawaii should have been the first state adopting the Partnership Program or tax credits encouraging long-term care insurance ownership.

Winston Churchill observed, "Americans can always be counted on to do the right thing … after they have exhausted all other possibilities."

Like other areas of progressive legislation readily adopted by other states which seem to work well, Hawaii is seemingly the most provincial and among the slowest to adopt proactive laws that benefit its citizens.

This, in turn, increases the social and economic costs of living that all of us know well.

If you are concerned about the high and growing costs of long-term care, please call the following legislators about the Partnership Program: Sens. Rosalyn Baker, Suzanne Chun-Oakland and Brickwood Galuteria.

It is likely to work well — even in Hawaii.


John Nakao, of Aiea, is the owner of Long-Term Care Advisors and has been a long-term care specialist for 11 years.

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