Navigating Long-Term Care in Hawaii

While Hawaii does not participate in the federal long-term care partnership program, the state does offer many insurance options to address the increasing costs of long-term health care. Plus, a unique state problem provides benefits for residents who qualify.

Tax-qualified Long-Term Insurance has many consumer protections and federal tax incentives. These insurance solutions are available from several insurance companies for people living in Hawaii.

Many qualified care providers are available throughout the state, but increasing demand for care has created rising costs. 

The variety of quality care options available in Hawaii for those who require long-term health care services include:

• adult day care centers
• assisted living facilities
• continuing care retirement communities
• home health care providers
• memory care facilities
• rehabilitation facilities
• traditional nursing homes

Top insurance companies have several insurance options to help residents safeguard income and assets, protect lifestyles, and preserve a legacy. Plus, policyholders will have access to quality care options giving loved ones the time to be family instead of caregivers.

Plus, all tax-qualified Long-Term Care Insurance policies in Hawaii have several consumer protections in addition to federal tax benefits.

Federal Partnership Program

The State of Hawaii is not yet participating in the federal/state partnership program but it does offer state tax incentives to encourage people to plan for the high costs of long-term health care.

Reciprocity

Hawaii does not yet have an active Long-Term Care Partnership Program in place. Therefore, anyone who moves into Hawaii with a Long-Term Care Partnership policy from another state would not have reciprocity in Hawaii. Although their policy benefits would work in the state, the additional asset protection offered through the partnership program would not be honor in the state.

Kūpuna Caregivers Program

Hawaii does offer a unique home care program. In 2018 Governor David Ige signed into law the Kūpuna Caregivers Program. This program assists families with their caregiving responsibilities. This is intended for employed Hawaiian residents who are also unpaid primary caregivers of a senior relative. It provides up to $70 per day to help cover the various costs of long-term care.

The primary caregiver must be providing care for an elderly individual. They must be a citizen of the United States or a qualified resident alien. In addition, they must be 60 years old or older and work outside the home. The individual caregiver is not required to live with the care recipient.

The Care Recipients must be a Hawaii resident who is at least age 60 or older. They must be living in their home, not in a facility like a nursing home, assisted living, or memory care center.  They must have a need for help and assistance with at least two Activities of Daily Living (ADLs), such as eating, bathing, and transferring from a bed to a chair, OR two Independent Activities of Daily Living (IADLs), such as housecleaning, preparing meals, and doing laundry, OR one ADL and one IADL OR have a considerable cognitive impairment that requires significant supervision. In addition, they must not be eligible for any other programs that provide home and community-based services. While this is not a complete solution for long-term care, it does provide some help for those who did not plan in advance.

Medicaid

Hawaii's Medicaid program will pay for long-term health care if an individual has little or no income and assets. The Long-Term Care Medicaid spend down is $2,000. A spouse’s minimum asset allowance is $137,400. Your spouse’s minimum monthly income allowance is $3,435 * The home equity limit is $955,000.

For more information about the Medicaid program visit www.medicaid.gov.

Hawaii Medicaid Estate Recovery Program

When a person applies for the Medicaid program for long-term care services and supports in Hawaii, they should understand the state is required to place liens on the home property of Medicaid recipients who receive long-term care services and supports.

Recovery will be for the amount of Medicaid payments made on behalf of the recipient to reimburse the state for the cost of their long-term health care. The estate is subject to the Medicaid Estate Recovery Program, otherwise known as MERP.

Following the death of the care recipient, the deceased's assets are used to reimburse the taxpayers for the long-term health care provided through Medicaid.  

The state will recover the cost of long-term care services if assets remain in the estate at the time of death. Hawaii is an expanded estate recovery state meaning the state can seek assets that do not go through probate. Expanded recovery means the state can seek reimbursement through assets held by the surviving spouse, life estates, and assets in a living trust.  

The state may "look back" up to 60 months before application for Medicaid long-term care services to determine when income was reduced and resources were transferred.

Remember that an estate includes all real and personal property (homes, land, vehicles, cash, bank accounts) held individually or jointly. All deceased assets are subject to recovery, including holdings in most trusts.

Hawaii can place a lien on real estate. Also, it is essential to note that a penalty might be applied if there was a transfer of real or personal property without adequate consideration, meaning for less than fair market value.

Remember, Hawaii's Medicaid program will provide long-term care services only if you have little or no income and assets. However, the state will never require a living spouse to move out of their home. 

If a person had a qualified Partnership Long-Term Care Insurance policy, the total amount of benefits paid by the policy would be sheltered from asset recovery. Currently, Hawaii has not yet adopted the federal Long-Term Care Partnership Program.

 State Resources for Aging and Long-Term Care in Hawaii

There are a variety of state resources available in Hawaii to help residents and their families with issues of aging and long-term health care. Many of these services benefit low-income families. 

• Area Agencies on Aging - 808-586-4400

Every county in Hawaii has an Area Agency on Aging. Each AAA is responsible for planning, developing, and administering services to older adults and family caregivers residing in their distinct geographic planning and service area.

By contacting the local AAA office, older adults and their families can learn about available resources, such as case management, assisted transportation, adult day care, and skilled nursing care. 

Elderly Affairs Division (Honolulu) phone: 808-768-7705 • website: www.elderlyaffairs.com

Hawaii County Office of Aging phone: 808-961-8600 • website: www.hcoahawaii.org

Maui County Office on Aging phone: 808-270-7755 • website: http://www.co.maui.hi.us/departments/Housing/aging.htm

Kauai Agency on Elderly Affairs phone: 808-241-4470 • website: www.kauai.gov/elderly

• Hawaii State Health Insurance Assistance Program (SHIP)  888-875-9229

SHIP in Hawaii provides one-to-one assistance to residents with Medicare, and their families, caregivers, and agencies throughout the state. Trained certified volunteer counselors provide consultations and presentations at no charge.

These trained counselors will provide accurate information on what Medicare will pay for and the amount Medicare will pay for those services. They can also provide information on supplement coverage, including Medicare Advantage, prescription drug coverage, and other available options. 

There are also resources available for qualified residents to assist them in paying for Medicare-related costs.

Rate Stability Rules

In addition, Hawaii consumers enjoy additional peace-of-mind as the state has adopted Long-Term Care Insurance Rate Stability Rules.  These rules, developed the National Association of Insurance Commissioners, makes it much harder for an insurance company to get an approved rate increase.

Products Approved in Hawaii

A variety of products are approved in Hawaii for Long-Term Care planning. These include traditional plans, short-duration policies, and asset-based “hybrid” plans.

Tax Incentives

State deductions are limited in the same manner as the deduction on the federal level and are also only available to the extent that all medical expenses, including long-term care, exceed 10% of Hawaii Adjusted Gross Income instead of the Federal Adjusted Gross Income. 

This deduction is limited in the same manner as the deduction on the federal level and is also only available to the extent that all medical expenses, including long-term care, exceed 10% of Hawaii Adjusted Gross Income instead of the Federal Adjusted Gross Income.

Reverse Mortgages in Hawaii

Reverse mortgages are available in Hawaii. A reverse mortgage is a home equity loan where the borrower does not have to make payments.

This type of mortgage can increase monthly income, eliminate mortgage payments, and even fund Long-Term Care Insurance. However, there are many rules in Hawaii on these products, and you should seek the help of a qualified and licensed mortgage broker. 

If you have significant equity in your home and you and your spouse are at least 62 years old, you can get a reverse mortgage to turn your equity into funding long-term health care, pay for an LTC Insurance policy, pay bills and add to your retirement lifestyle.

The home must be the principal residence without any tax liens. 

Learn more about reverse mortgages by clicking here.

LTC Tax

Hawaii is one of several states that is considering following the State of Washington in implementing a tax on income for any person who does not own a qualified Long-Term Care Insurance policy.

What is unknown is if they implement the tax plan if they will offer any reasonable time for state residents to purchase qualified policies if they do not already own one. 

It is highly recommended to speak with a qualified specialist to consider your options - Work With a Specialist | LTC News

_{*The federal government sets a new minimum and maximum amounts each year, but states can set their own minimum requirements at any level between the federal limits. This information is based on the best available sources.}