HB1804 SD2

SECTION 1. The legislature finds that Hawaii's senior population has been growing faster than the national average. Without a sustainable financing framework for long-term care, the majority of Hawaii's families will be forced to shoulder increasingly unsustainable financial burdens. According to a 2025 report by the kupuna advisory council's long-term care financing permitted interaction group, the average per-person annual cost for long‑term support services ranges from approximately $45,500 in a community care foster family home to more than $200,000 in a skilled nursing facility, which is already prohibitively expensive for many Hawaii families. The State must find a way to address long-term care costs and ensure that long-term care services remain equitable and available to all of Hawaii's residents. Accordingly, the legislature believes that it is necessary to obtain a comprehensive, data‑driven evaluation of feasible financing strategies for long-term care.

The legislature also finds that creating a successful long‑term care program is complicated due to the fragmented nature of the long-term care system; the multitude of providers and payors; the State's chronic shortage of caregivers; the high costs of private insurance; and the inherent difficulty in predicting the extent, duration, and timing of an individual's long-term care needs. To address these issues, the State must consider a variety of financing models; examine potential reforms of home- and community-based services; and implement cost containment strategies that manage expenditures while improving the quality of care.

However, the legislature recognizes that it will first be necessary to carefully develop a framework and scope of work for a thoughtful study of these complex issues. To allow for effective planning, the State must also create a realistic timeline and list of proposed next actions for selecting and implementing a future long-term care services financing program. The legislature believes that these steps are essential for understanding the impacts of a future long-term care services financing program and will provide valuable information necessary for policymakers to select the model or framework of financing that will work best for Hawaii's residents.

The legislature further finds that these issues should be addressed by an agency that has specific experience with and expertise in the unique issues that our kupuna face. The legislature notes that statewide planning and oversight functions over kupuna affairs statutorily reside with the executive office on aging. Specifically, section 349-3, Hawaii Revised Statutes, designates the executive office on aging as the "principal office in state government solely responsible for the performance, development, and control of programs, policies, and activities on behalf of elders[.]" Similarly, section 349‑7, Hawaii Revised Statutes, designates the executive office on aging as "the single state agency responsible for programs affecting senior citizens of this State[.]"

Accordingly, the purpose of this Act is to lay the groundwork for the establishment of a long-term care financing program by:

(1) Requiring the executive office on aging to develop a framework and scope of work for a proposed study that examines the feasibility, impacts, and costs of different public and private financing options for long-term care services and supports;

(2) Authorizing the executive office on aging to contract with the university of Hawaii to develop the framework and scope of study; and

(3) Appropriating moneys to the executive office on aging to effectuate the purpose of this Act.

SECTION 2. (a) The executive office on aging shall develop a framework and scope of work for a study that:

(1) Examines the feasibility, impacts, and costs of different public and private financing options for long-term care services and supports, including options to pay for those long-term care services and supports; and

(2) Determines which long-term care financing mechanisms have objective, evidence-based merit.

(b) At a minimum, the framework and scope of work shall require that the study include:

(1) Objective, evidence‑based assessments of each financing option's feasibility, costs, reliability, long-range solvency, benefits and impacts, and impacts on the populations served, including assessments of:

(A) Alternative public and private options and financing mechanisms for providing long-term care services and supports for persons who have functional limitations or chronic illnesses and who require assistance to perform the necessary and routine activities of daily living;

(B) Options for controlling the cost of services by funding proactive measures, including efforts to mitigate an individual's likelihood of needing long‑term care services and limit the scope of services needed; and

(C) The benefits of implementing home- and community‑based reform measures for health care and other supportive services to provide care to eligible persons in their home or other community settings, rather than in institutional settings; and

(2) Recommendations for the most economically viable option for establishing a long-term care financing program, including a proposed plan, timeline, and any subsequent steps necessary to implement the program.

(c) No later than twenty days prior to the convening of the regular session of 2027, the executive office on aging shall submit a report to the legislature that includes:

(1) The framework and scope of work developed pursuant to subsections (a) and (b);

(2) The estimated cost to procure the proposed study;

(3) Recommendations for any subsequent actions necessary to conduct the proposed study and to select and implement a long-term care services financing program;

(4) Proposed legislation, including necessary funding, to procure the proposed study; and

(5) Any other findings and recommendations, including any other proposed legislation.

SECTION 3. The executive office on aging may contract with the university of Hawaii, using moneys appropriated by section 4 of this Act, to perform the activities required by section 2 of this Act. Any services contracted under this section shall be exempt from chapter 103D, Hawaii Revised Statutes.

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2026-2027 for the executive office on aging to perform the activities required by this Act.

The sum appropriated shall be expended by the executive office on aging for the purpose of this Act.

SECTION 5. This Act shall take effect on July 1, 3000.

HOUSE OF REPRESENTATIVES	H.B. NO.	1804
THIRTY-THIRD LEGISLATURE, 2026		H.D. 1
STATE OF HAWAII		S.D. 2