Care tax of $10 a month advised
By Robbie Dingeman
Advertiser Health Writer
A state board created to find a way to help families pay for long-term health care is recommending an initial monthly payroll tax of $10 a month, to rise to $23 by 2012, according to a report released yesterday.
The state Executive Office on Aging estimates that just 6 percent of Hawai'i residents have long-term care insurance, "abysmally short of a solution for this problem."
But the Legislature has turned down a payroll tax plan before, and Gov. Linda Lingle may recommend instead a tax credit for families that buy the insurance themselves.
The Long Term Care Financing Board, established by the Legislature early this year and endorsed by then-Gov. Ben Cayetano, is charged with designing a program, said Marilyn Seely, director of the state Executive Office on Aging.
Backers of the proposal see it as important for the frail, elderly and disabled. They say private insurance companies have not been able to fill the need.
Taxpayers already pay huge sums for long-term care through the federal Medicaid program designed to help low-income people. But many healthcare analysts say the costs covered by the program are declining.
The board noted the "urgent need" to develop new ways to help pay for expensive care for Hawai'i's elderly and disabled. "While this is not a problem unique to Hawai'i, it is of pressing concern in our state, because we have one of the fastest-growing populations 65 years of age and older," the report said.
"Long-term care is enormously costly," Seely said, and family members who care for patients at home need help so they don't burn out, because "most of the caregivers have to be in the work force."
Insurance agent Laudra Eber believes the tax credit would be more effective, because people who can afford to pay for care might otherwise tap into the state program.
Lingle was not available to comment yesterday. In her detailed agenda, Lingle said she would work to provide a tax deduction or credit for long-term care insurance premiums.
Under the proposal, all taxpayers with enough income to file taxes would be required to pay, regardless of age and including part-time residents who filed state tax returns.
The report says the self-employed would pay through estimated tax payments. Spouses would be covered on the tax return where they are listed, even if they do not work. Retirees who file state taxes also would be included.
The board also recommended that the program be run by The Long Term Care Group Inc. or CHCS Services Inc. or both, because both companies provided the board with detailed information and recommendations.
The program could begin two years after legislation was passed.
The board recommended a $70 daily cash benefit for as long as a year. "The benefit shall increase as follows: 2008, $72.10; 2009, $74.26; 2010, $76.49; 2011, $78.79; 2012, $81.15; 2013, $83.58," according to the report.
Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 535-2429.
