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Hawaii Lawmakers Consider LTCI Partnership Bill

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Members of the Hawaii Senate Human Services Committee have approved a bill, S.B. 2309, that would create a long-term care (LTC) partnership program in Hawaii.

A state LTCI partnership program helps consumers who buy private long-term care insurance (LTCI), then use LTC long enough to exhaust the private LTC benefits. In a partnership state, a consumer who has a qualified LTCI policy can keep more assets than other state residents when applying for Medicaid nursing home benefits.

State Sen. Suzanne Chun Oakland, D-Sand Island, the chairman of the Human Services Committee, introduced the bill.

Cynthia Takenaka, executive director of the NAIFA Hawaii chapter of the National Association of Insurance and Financial Advisors, testified in support of the bill.

Takenaka noted that 44 states now have LTC partnership programs.

Consumers in Hawaii must have less than $2,000 in assets, plus their homes, to qualify for Medicaid nursing home benefits.

If Hawaii creates an LTC partnership program, consumers “will no longer have to become impoverished to qualify for Medicaid,” Takenaka said in a written version of her testimony.

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Oren Chikamoto of Honolulu wrote on behalf of the American Council of Life Insurers, Washington, to praise the intent of the bill but also to suggest that some provisions in the original version conflicted with the provision in the federal Deficit Reduction Act of 2006 that let all states set up LTC partnership programs.

Originally, for example, S.B. 2309 stated that the purpose of a partnership program is to combine private LTCI funds and Medicaid funds.

“The purpose of the long-term care partnership program is not to combine funds,” Chikamoto wrote. “It is to encourage more people to purchase LTC insurance in return for allowing the total amount of benefits paid under a qualified individual LTC policy as an asset disregard, dollar for dollar, when applying for Medicaid.”

The Human Services Committee amended S.B. 2309 to reflect that advice and other suggestions Chikamoto made.

Eldon Wegner of the state Policy Advisory Board for Elder Affairs testified against S.B. 2309.

“Studies in other states which adopted this program found that it did not increase the numbers purchasing private long-term care insurance, thus not serving the intended purpose,” Wegner said. “Apparently, those who enrolled were persons who would have purchased private insurance regardless of the program.”