Tax for elderly care set at $120

By Lynda Arakawa and Gordon Y.K. Pang
Advertiser Capitol Bureau

Hawai'i taxpayers would pay an extra $120 a year for a state long-term-care program while long-term-care insurance policyholders would receive a tax credit, under a bill tentatively approved by House and Senate lawmakers yesterday.

It would also establish an initial tax credit of up to $120 a year for those who purchase long-term-care insurance.

The measure was among hundreds of bills agreed to yesterday in conference committees, where House and Senate lawmakers hammer out differences.

All bills needed to be approved by their respective conference committees by last night to move on to final voting in both houses next week. The legislative session adjourns Thursday.

Under the long-term-care measure, taxpayers would pay a long-term care income tax of $120 a year, which would increase to $276 a year by the end of 2011. Those who pay the tax for 10 years would be eligible for the full $70-a-day cash benefit for up to one year. The cash benefit would grow to $83.58 per day in 2013.

The bill would establish a tax credit of up to $120 a year for five years and a credit of up to $180 a year for the following five years for people who pay the tax and purchase a long-term-care insurance policy.

Opponents of the measure say the long-term-care program does not provide enough coverage and that it gives people a false hope and a disincentive to purchase their own insurance. But supporters say many people cannot afford to buy their own insurance and that the program provides enough flexibility to allow people to continue to live at home.

Also, in what elderly advocates called a big step toward protecting the frail and elderly, House and Senate lawmakers agreed to require the state Department of Health to conduct surprise annual inspections of adult residential care homes.

No-notice inspections

The department's current practice is to tell the care-home operators the month and day of the week an inspection will occur.

Under an approved draft of House Bill 914, the state Department of Health would have the discretion over whether to give care-home operators notice of an inspection to renew their licenses. The department would also be required to conduct additional surprise annual inspections to check on the health and welfare of care-home clients.

Greg Marchildon, state executive director of the AARP, which advocates on behalf of retired people, called the measure a step in the right direction.

"We've always maintained that unannounced inspections just provide a baseline of protection for these residents and their families' peace of mind," he said.

Ron Gallegos, president of the Alliance of Residential Care Administrators, said: "The main thing that is being done new is the fact that they can come in unannounced anytime to check the status of the residents, which we are fully in agreement with."

Another bill headed to the House and Senate floor is Senate Bill 1321, which makes permanent a law mandating that insurance coverage provided for serious mental illnesses be the same as that provided for other medical conditions. The law was set to expire June 30.

Gov. Linda Lingle testified on behalf of the bill during the session, telling lawmakers about her mother, who suffered from a mental illness.

Lawmakers also gave preliminary approval to a measure that creates an executive salary commission, which Lingle has also supported.

Under the latest draft of Senate Bill 1332, the executive salary commission would review and recommend salaries of the governor, lieutenant governor, as well as state department heads and deputy directors. The five-member commission, which would meet every eight years, is made up of appointees from the Senate president, House speaker and the Hawai'i Supreme Court chief justice.

Kindergarten age

Any new salaries would not take effect until the beginning of the next term for the governor and lieutenant governor, and new salaries would take effect unless rejected by the Legislature.

Children will have to be age 5 by Aug. 1 to enter kindergarten at public schools beginning with the 2005-2006 school year under Senate Bill 17, which passed out of conference committee yesterday. A provision directs the Department of Education to "provide appropriate educational programs" for those students born between Aug. 2 and Dec. 31 who would no longer be eligible for kindergarten. Lawmakers pointed to studies showing students who start "older" tend to perform better.

To deal with the budget, conferees agreed to use some special funds and eliminate a few others to the tune of about $72 million over three years. That's substantially more than the $42.7 million Lingle proposed.

Also, budget conferees used Senate Bill 1309 to dip into the so-called "rainy day fund," to restore $10.5 million in funding for health and human service programs that had been slated to be reduced under the Lingle budget. Restorations included $1.45 million for community health centers, $1 million for the Residential Alternative Community Care Program, and $750,000 each for the Wai'anae District Comprehensive Health Center, Kahuku Hospital, and Moloka'i General Hospital.

Transportation conferees passed out Senate Bill 464, commanding the Department of Transportation to work with the city and the O'ahu Metropolitan Planning Organization to "develop an action plan for implementation of a fixed rail transit system on O'ahu."

House Bill 297, also moving out of conference yesterday, appropriates $100,000 to begin a drug nuisance abatement unit that will target drug houses across the state. While a deputy attorney general and investigator will staff the unit, initially, additional revenues are expected through drug forfeitures. Conferees said additional money will go specifically for drug treatment on the Big Island because it has been hardest hit by crystal methamphetamine abuse.