STAND. COM. REP. NO. 2840

Honolulu, Hawaii

RE: S.B. No. 3324

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 3324 entitled:

"A BILL FOR AN ACT RELATING TO MEDICAID,"

begs leave to report as follows:

The purpose and intent of this measure is to increase funding for community-based residential care services in the State.

More specifically, this measure:

(1) 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; and

(2) Requires the Department of Human Services to obtain matching federal funds and to pursue additional funding sources in order to qualify to expend the state funds.

Your Committee received written comments in support of this measure from the Department of Health, Department of Human Services, Disability and Communication Access Board, Hawaii State Council on Developmental Disabilities, AARP Hawaii, AlohaCare, Ava Sofia Foundation (d.b.a. Autism Moms of Kona), Hawaii Medical Association, Sebastian's Arch LLC, and eleven individuals.

Your Committee finds that Hawaii continues to face strong demand for community-based long-term care options that allow kupuna to remain close to family and familiar health care providers. Your Committee also finds that current reimbursement rates for residential care settings remain insufficient to support fair wages and sustainable operations amid rising costs. Your Committee believes that increasing state funding and maximizing federal matching funds are necessary to maintain and strengthen quality community-based care for Hawaii's kupuna.

Your Committee notes that, in its written comments, the Department of Human Services indicated that, based on updated utilization data, the appropriation may be reduced to $1,770,892.

Your Committee has amended this measure by:

(1) Changing the appropriation from $5,810,000 to an unspecified amount; and

(2) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3324, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3324, S.D. 1.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

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DONOVAN M. DELA CRUZ, Chair