THE SENATE

S.B. NO.

3324

THIRTY-THIRD LEGISLATURE, 2026

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

Relating to Medicaid.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that, in a 2021 quantitative research study, the AARP found that, among Hawaii residents aged forty-five and older, seventy-five per cent of the respondents reported that having affordable long-term care options in their communities was an important independent living issue.  Respondents also reported that maintaining a connection with family and friends and the ability to continue visiting familiar health care providers are significantly easier when the State's kupuna can be cared for closer to home.  The legislature recognizes that, in 2026, a strong demand for community-based care options for kupuna still exists.

     The legislature further finds that the latest review of the State's home and community-based medicaid reimbursement rates for residential services was a third-party study conducted by the actuarial firm Milliman, published on December 30, 2022.  The study developed benchmark comparison rates for certain home and community-based services, including residential services provided in community care foster family homes and expanded adult residential care homes.  Notably, amongst all provider types examined in the Milliman study, the current median direct care wages paid to home and community-based services providers fell below the twenty-fifth percentile for those occupation codes and titles as determined by the United States Bureau of Labor Statistics.

     The legislature also finds that, in 2024, a recurring budget appropriation for residential settings rates was enacted.  The appropriation was passed as a budget line-item reflecting an annual state share increase of $5,750,000 for select home and community-based services.  This increase was inclusive of residential services for community care foster family homes and expanded adult residential care homes, effective in 2025 and beyond, and reflected the "low" rate scenario for the residential services included in Milliman's 2022 rate study.

     The legislature acknowledges that, while meaningful, the 2024 appropriation was inadequate.  Service providers remain unable to offer benefits, including health insurance, to their employees and continue to rely on substitute caregivers, sometimes unpaid, including family members and friends of the providers.  Additionally, high inflation has persisted, further increasing costs for operators providing residential services in community care foster family homes and expanded adult residential care homes.  The result of these ongoing financial pressures is that few providers are able to operate sustainably, leading to limited community-based care options for Hawaii's kupuna.

     Accordingly, the purpose of this Act is to:

     (1)  Appropriate moneys to increase the funding of residential services offered in community care foster family homes and expanded adult residential care homes to the "medium" rate scenario published in Milliman's 2022 rate study; and

     (2)  Require the department of human services to obtain the maximum federal matching funds available for the increased expenditure, which will result in a larger impact on reimbursements paid to service providers.

     SECTION 2.  There is appropriated out of the general revenues of the State of Hawaii the sum of $5,810,000 or so much thereof as may be necessary for fiscal year 2026-2027 to increase funding for certain medicaid home- and community-based services, including residential services offered in community care foster family homes and expanded adult residential care homes; provided that no sum shall be expended unless the department of human services:

     (1)  Obtains the maximum federal matching funds available for this appropriation; and

     (2)  Exhaustively pursues all funding sources identified by the State, including private grants.

     The sum appropriated shall be expended by the department of human services for the purposes of this Act.

     SECTION 3.  This Act shall take effect on July 1, 2026.

 

INTRODUCED BY:

_____________________________

 

 

 

 

 

Report Title:

DHS; Medicaid; Med-QUEST; Home- and Community-Based Services; Residential Services; Community Care Foster Family Homes; Expanded Adult Residential Care Homes; Federal Matching Funds; Appropriation

 

Description:

Appropriates moneys to the Department of Human Services to increase funding for certain Medicaid home- and community-based services, including residential services offered in community care foster family homes and expanded adult residential care homes.  Requires the Department to obtain matching federal funds and to pursue additional funding sources.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.