Care of Hawai'i's elderly a growing challenge
| • | Chart: Hawai'i's aging population |
By Robbie Dingeman
Advertiser Health Writer
Retired teacher Mildred Oba, 74, had the foresight to buy long-term-care insurance 10 years ago. When the time comes, it'll help her afford in-home care or perhaps a nursing home.
Bruce Asato • The Honolulu Advertiser
For now, though, she's a full-time caregiver to her 95-year-old mother, Toneyo Choriki, at their Pearl City home. Choriki does not have long-term-care insurance, which would help her daughter hire a respite caregiver — someone to give her a break and some free time.
Retired teacher Mildred Oba, left, cares for her mother, Toneyo Choriki, at their home in Pearl City. Oba has seen people around her struggle with long-term-care issues, losing their homes and assets to pay for care.
"Whenever I go out to the store, I'm rushing all the time so that I can get back," said Oba, whose mother has dementia. "I'd like to go out and have lunch with my friends. I'm a member of the hongwanji, and I like to go, but I've had to cut that out because she's home by herself."
Challenges faced by Oba and others in Hawai'i's rapidly growing elderly population made long-term care one of the hottest topics at the 2003 Legislature, which ended Thursday.
Lawmakers approved a two-pronged bill that creates a new tax for a state long-term-care fund, and also offers tax credits to those who buy private long-term-care insurance.
A significant number of lawmakers voted against the bill, and Gov. Linda Lingle has hinted she may veto it.
But while disagreement lingers over the bill, few dispute the need in the community. Several factors are converging to make long-term care an increasingly urgent issue:
- In 2020, one in four Hawai'i residents will be 60 or older, the state Executive Office on Aging projects. One in six is that old now.
- Only 6 percent of adults of Hawai'i have long-term-care insurance, the Office on Aging says.
- Hawai'i's average nursing home cost is $238 a day, sixth-highest in the nation, said a survey by the financial planning firm GE Financial.
- Long-term-care insurance costs $3,572 a year for a healthy person 75 years old, according to GE Financial. That buys two years of nursing home care.
Greg Marchildon, executive director of AARP-Hawai'i, said AARP members nationwide are talking about long-term care.
"People are only motivated to buy long-term-care insurance after they have had a crisis," he said. "Then they realize the system is a convoluted maze."
Although people often think of long-term care in the context of nursing homes, such insurance covers a wide variety of services, including adult daycare, home healthcare, respite care, assisted living and help with basic daily living needs.
Unlike medical care, long-term care is intended not to address illness or injury but to help people maintain a quality of life and help them do things they can no longer do on their own.
According to the National Association of Insurance Commissioners, the cost of such care runs the gamut. The organization charted the average cost of nursing home care in 1997 at $46,000 a year. To have a nurse provide skilled in-home care three times a week for two-hour visits would cost about $19,300 a year; a home health aide on an identical schedule would cost about $10,000.
Oba has seen people around her struggling with long-term-care issues. Two relatives live in skilled nursing facilities because of strokes; another five relatives live in skilled nursing homes or care homes because of strokes, Alzheimer's or diabetes.
She said all of them lost their homes and all their assets to pay for their care.
"This is something that if they're not prepared for it, you're going to be overwhelmed," Oba said. "You can lose everything to it."
Senate Bill 1088 CD1 is a two-part bill. One part taxes people to create a state long-term-care benefits program. The other gives a tax credit to people who buy their own private long-term-care insurance. The tax • Beginning in 2005, taxpayers will pay $120 a year into a fund that will be used to provide benefits to the elderly and others who require long-term care. Most people will pay it via payroll deduction. Premiums go up each year, eventually to $276 in 2012. • Beginning in 2008, people who have paid into the fund may receive up to $21 a day, for one year, to help cover long-term-care expenses such as nursing care. Benefits increase annually to $28.44 a day, then $37.13, $45.89, $55.15, $64.92 and, in 2014, $75.22 a day. (The bill lists higher amounts of benefits payouts, but those figures are for people who have paid into the fund for at least 10 years. People are vested 10 percent for each year they pay into the fund. Thus, the first recipients in 2008 will be 30 percent vested for the $70-a-day benefit, and so will receive $21 a day.) The tax credit People who buy private long-term-care insurance are eligible for a tax credit of: • $120 for tax years 2006 through 2008 • $180 for tax years 2009 through 2013 See the complete text of the bill online.
Insurance coverage can help fill some gaps and ease stress for caregivers. "It frees you to do what you want to do, so that I can have my own life now and then." Of course, Oba's idea of her own life usually includes doing other things with and for others: registering a grandson for swimming, picking another grandson up from school, driving to a friend's house
How the bill works
Oba said her two grandsons, ages 12 and 7, help keep her and her mother happy. "Seeing the antics of the kids, we're always laughing."
Carol Kikkawa-Ward, a financial adviser with American Express, sees the $120 annual tax as helping a segment of the population that will never be able to afford the insurance on their own. Not providing any assistance to that group means that they end up on government assistance in institutions, meaning taxpayers foot bigger bills in the long run.
"You have to have protection for that group that might cost society a lot less," she said.
Kikkawa-Ward is 60 years old and has paid $120 a month for five years for her long-term-care insurance. "It's a good package. It pays for everything from at-home (care) to nursing home. It pays $150 a day. It's not the richest."
The agents agree that costs vary widely and some people who wait until they are older or have developed chronic conditions — such as diabetes, high blood pressure and high cholesterol — sometimes find themselves rejected as insurance buyers.
State insurance commissioner J.P. Schmitt said about 90 insurance companies have been approved to sell long-term-care insurance to individuals in Hawai'i.
Schmitt said there is no set price for long-term-care insurance because the benefits offered differ so much. He said the insurance is available but "a lot of times people don't think about it and don't plan ahead for it."
When they do try to buy a policy they may not be able to afford what they want. "It's important to think about it and plan for it now, instead of waiting until it's needed when it may be too late."
John Wesley Nakao, long-term-care specialist for John Hancock, said the tax credit and the tax can both benefit some people. The tax credit will provide a tax incentive for middle-class folks to buy coverage and the state plan provides some basic economical coverage, he said.
Bruce Asato • The Honolulu Advertiser
Opponents of the bill have said the program does not provide enough in long-term-care benefits, and said it required taxpayers to contribute for 10 years before being able to receive full benefits.
Mildred Oba, left, assists her mother, Toneyo Choriki. Choriki does not have long-term-care insurance, which would help her daughter hire a respite caregiver to give her an occasional break.
They also said it would be a burden on residents and was a disincentive to purchasing private long-term-care insurance.
Nakao said after people reach age 65, there's a two-in-five chance that they will spend time in a nursing home. Insurance helps with a variety of services that elderly and disabled people may have difficulty handling alone.
Nakao said few people younger than age 50 purchase this kind of insurance. Those who start at a younger age will pay less, even if they pay over a longer period of time: A person at age 40, for example, will pay less than one-tenth of what an 80-year-old will pay in annual costs for the same coverage.
Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 535-2429.
