House Standing Committee on Human Services & Homelessness

Aloha, everybody. Thank you so much for being here. It is November 7, 1:30 p.m. and this is a info briefing for the House Committee on Human Services to learn more about the impacts of federal cuts and other increases in costs on our very, very important social safety net.

And we are going to start with Terry George from Hawaii Community Foundation and take it away. Terry.

Great. Thank you so much Chair.

Let me sorry. This is my Vice Chair, Ikaika Olds, Representative Ikaika Olds and I'd also like to introduce Representative Marten, who's joining us today. And with that, please take the meeting.

Great. Chair Marten, Vice Chair Olds, Representative Marten, thank you so much for the opportunity for several nonprofit leaders from the human services world to share data and stories with you today about the effect of the federal cuts.

I was going to start and we can go to the next slide if you'd like, Emmy, with some data and sort of to frame this and then hand it off to some of the other Members who can share more information with with you on what's going on.

And I'm sorry to interrupt, but just wanted to introduce Representative Amato who's also joined us.

Thank you, Representative Amato, for being here. But before we start with some of that data, I wanted to share a story that I heard yesterday in an email from the head of the pantry, Janine Sullivan. As you know, they started an additional third distribution, obviously in partnership with Hawaii Food Bank and many volunteers.

And they did a they now do one every Monday just for families that have been impacted without pay from federal sources. So on Monday, she says, we met Tiana, a 911 dispatch operator at Joint Base Pearl harbor who has two young children and a negative bank balance.

Both she and her husband have been working, still working without pay. And because of the surge in emergency calls, she's been working multiple 12 year shifts back to back again without pay. Stories like hers are heartbreaking, Jeanine states, but they also represent an opportunity.

So not only does this tell a story about that family and what they're doing, but also about that nonprofit and the many, many others who see this as an opportunity to serve without thinking of anything, not waiting for a contract, not waiting for funding. They're just doing what's right for the community.

So we're going to hear more of those stories today. I just want to thank your Committee for your continued advocacy for Hawaii's nonprofit sector. You know, your partnership has been important and part of what I hope we can discuss is ways that we can continuing to partner between philanthropy, policymakers and the nonprofit sector. Why?

To help Hawaii be a better place and take care of all of our children, all of our families, all of our Kuna. So next slide. Following the murmings of federal funding cuts, I'll tell you a little bit of the story of what Hawaii Community foundation did.

We commissioned first UHero, and you'll hear from them to conduct research in order to guide our own strategic reactivation just a month ago of the Hawaii Resilience Fund. And we'll tell you more about that Fund later.

But that research confirmed what we've long our nonprofit sector is essential infrastructure, and the findings gave us the roadmap to respond strategically to today's crisis. And HCF's role has been to connect that research with the service providers and policymakers who need it the most. Next slide, Andy.

So today, though, we're going to focus particularly on human services nonprofit organizations, as you know very well, because you've been advocates and policymakers to support this sector. They provide housing, food security, mental health support, family strengthening and crisis intervention, to mention a few.

Through our work convening these providers, we're seeing a perfect storm over the last several months. Historically, on the one hand, historically high demand for services, inflation, which is raising their own costs, labor challenges to attract and retain workers, unprecedented federal funding cuts, and chronic underfunding of the true costs under many state and county contracts.

These organizations are on the front lines, as my opening story shared, and they're telling us the system is at a breaking point. Next slide, please. Let me share some of the data and then turn to you here to tell more of it. But these are just critical numbers that illustrate why the nonprofit sector is so critical.

They really are the community. They don't just serve it. Estimates are that 60,000 jobs are generated by the overall nonprofit sector, so that's 12% of everyone employed in Hawaii's civilian workforce, 53% serve people with lower incomes, and 95% work in rural areas, which is nearly double the national average for nonprofits working in other states.

I was at a meeting in LA on Monday and Tuesday this week hosted by a group called the Center for Effective Philanthropy. They just released on Monday a new nationwide survey of nonprofits and funders, and the answers weren't the data weren't pretty.

34% of nonprofits surveyed across the country reported losing federal funding in 2025, and 22% more anticipate such losses. Also, and this is sobering, 29% have already had to reduce their staff this year, while another 23% anticipate having to do so, and you'll hear some corroborating stories from some of the rest of the panel.

So, you know, we don't know that we've got the same hard data for our state that's as recent, but it's, it's very similar. Next slide, please. So really, what we need to move to is from crisis response to sustainable solutions. And that's what we thought we'd talk quite a bit with your Committee about today.

First, some kudos to the leaders in this building, including yourselves, the House, the Senate, state agencies, the governor's office for what was announced last week. And of course, we have Catholic Charities in the room to tell their story about what they're doing.

But that has been the example of swift action that shows what's possible when government and nonprofits work as true partners together. Now these are great. These emergency measures do address the immediate crisis, but they also highlight how nonprofits have been filling gaps all along. The federal withdrawal hasn't created a new problem.

It's just exposed and widened a gap that already has existed for a long time. Based on what Hawaii Community foundation has learned from our nonprofit partners. They've been underfunded for years, they've been absorbing costs, and they've been figuring out their own way to make up the difference. Imagine asking a nonprofit, zero, we're going to contract you.

Can you just go find other money or borrow it money to go do the work and then submit for reimbursement, which we might give you 1218 months from now. So these are not concerns that are new to your Committee. You've been working on this for a long time.

But their request now, I think from nonprofits, is not just for additional funding, but for your partnership in advocating to fill this gap and then Fund services at their true costs. Because without a healthy nonprofit sector, we cannot have healthy communities.

Through our work with many of our nonprofit partners, many of them show how their full costs aren't covered by existing contracts. And we'll learn a little bit about that today. And you know, in the short term, we do need to prevent immediate service collapse, but in the medium term, we need to stabilize the nonprofit work workforce.

And in the long term, let's work together to build sustainable infrastructure in every one of your districts, all districts in the state, so that we don't depend on nonprofit staff subsidizing government services with below market wages. Next slide, and then I'll turn it over in just a Sec.

So I did want to just share briefly Hawaii Community Foundation's multi pronged response to date, as you know, we are connectors between very generous donors and very Akamai front facing nonprofit organizations who know the communities with the back of their hand. We do that through our own team of experts.

So what we decided to do is we have indeed funded through our Hawaii Resilience Fund, Hano, which is represented in the room today, to bring on new staff and new capacity to basically steer nonprofits who need help making tough decisions about survival and continuing to provide services.

We've also launched a strengthened service grants program, and we'll make decisions on those grants in a couple of weeks to provide support directly to nonprofits that are affected by federal cuts to support their organizational transformation and their sustainability. We will continue to ask Uhero and others to track the data for us so we understand the impacts better.

And you'll hear from you here in a moment. And then we're going to do ongoing policy monitoring, actively tracking federal, state and local policy developments and offering whatever support we can provide and perspective that we've learned.

So, for example, we've been, I would say, cheerleaders in the wonderful Bill, Act 3, that was passed to provide $50 million in state emergency funds to nonprofits. And we've all seen that the demand exceeds the supply. My one personal plea based on what I've heard from nonprofits is can we make those dollars not reimbursable?

Last year, Hawaii Community foundation Approved and made 2,970 grants. Not 11 of them was reimbursable. And finally, last slide. We want to ask you in our Q and A section how we, the Hawaii Community foundation, and how nonprofits can be most effective in supporting your priorities.

I just think that together with committees like yours, I think we really can ensure that our nonprofit infrastructure gets through this crisis period, strong enough to continue to support our communities for years to come. And with that, I'd like to turn it over to Trey Gordner. Come on up, Trey.

Trey is policy researcher and data scientist at uhero, the, uh, economic research organization. And he's been integral in spreading, spearheading the research for our latest work with UHERO around the impact of the federal funding cuts. So take it away, Trey.

Thank you, Terry. Good afternoon, Chair, Vice Chair, Members of the Committee and guests. My name is Trey Gordner.

I'm a Policy Researcher at UHERO, and today I'll be presenting a summary of a policy brief I authored entitled the Vulnerability of Hawaii's Nonprofit Sector to Cuts in Federal Funding, published October 2nd of this year and available at UHERO Hawaii.

EDU, the purpose of this research is to provide a an early warning system to identify grants, nonprofits and subsectors at risk in advance and allow local leaders to prepare timely responses. Next slide, please we developed a three part framework for understanding the risks that nonprofits face. The first is what we call policy or political risk.

This begins at the grant level, where which grants stand to be cut or frozen potentially by federal actions? Using official federal spending data, we flag all current grants and contracts to nonprofits with a place of performance in our state that meet any of the following conditions.

They either have been subject to Executive actions in the past year that can be cuts, delays, freezes. They are similar to a grant or contract cut in another state, for example using the same program code. They share keywords with Executive Orders or policy statements such as DEI or green energy.

Or they are programs that are unique to Hawaii. So, for instance, primarily serving Native Hawaiians that may not have national political support. After the policy or political risk comes the financial risk. This asks the question, what would happen to this organization if they lose their federal support? Would they need to shrink or close potentially?

Using official IRS and Treasury records, we flag all nonprofit organizations headquartered in Hawaii that we estimate receive more than 20% of their annual income from federal sources or that lack the assets to cover their potential cuts.

And the third and final component is structural risk, which looks at the subsector level and asks whether groups of nonprofits providing similar services could collectively fill in gaps formed by federal cuts or would they risk being overwhelmed? Next slide, please. So here are our findings for that first category risk.

IRS records list about 8200 501C3 nonprofits active in Hawaii. Of these, only about 200 or less than 3% received direct federal funds in fiscal year 2025. And this is an important caveat of this research. You should hold it alongside information about pass throughs coming through agencies.

For instance, we're only looking at direct federal funding for today, so some 74 grants to 59 unique organizations have political risk based on their award descriptions or documented Executive actions.

And as of September, these at risk grants total $126 million in obligations that have not yet been paid, so these could be withdrawn or withheld by federal action in the future. Future. Over half of the funds are committed to health care organizations and other subsectors with significant exposure include international affairs, human services, and environmental nonprofits.

I want to focus on awards to organizations primarily serving Native Hawaiians as well. These include several of the largest awards statewide and account for about 66 million of that 126. If you slice it differently, 80% of that is in health care, with the remainder in human services. Next slide, please.

Now, looking at financial risk of those 200 nonprofits receiving direct federal support, we estimate that 68, or about 1 in 3, rely on their federal funds for more than 20% of their annual revenues. So that's about 1% of all the nonprofits.

But it's a much larger share of the overall spending available to nonprofits and the overall employment in the nonprofit sector. As Terry alluded, 21 organizations reported no other significant revenues on their latest IRS tax filings. And it's important to note for this Committee that human services nonprofit organization are among the most financially exposed.

Federal direct grants provide 36% of all nonprofit revenues in that subsector and make up 28% of the average recipient's revenue. So relative to other organizations, human services nonprofits have an outsized exposure. Next slide, please. This final slide.

This slide provides an overall picture of risk for select nonprofit subsectors that may be of interest to the Committee and summarizes some of my previous points. As I said in relative and absolute terms, the risk to human services nonprofits is greatest, save for health care.

Human services grants tend to serve vulnerable and marginalized populations, which this Administration has decided emphasized, leading to outsized policy or political risk. And human services nonprofits are individually and collectively more reliant on federal funds for operations than almost any other subsector. While the risks presented here are important, as I said, they are also not the whole story.

Nonprofits in Hawaii will face indirect pressure from the cuts in HR1, the recent budget recognition, conciliation, as you know, and also potential indirect cuts through pass through funds.

So from in economic terms, we see that the collective trend is one in which the supply of social services provided to nonprofits could fall while demand rises, creating shortages if we don't take action. Thank you very much to the community.

Thank you. Thank you. If the Committee needs to ask questions along the way, please do so.

If it's okay, we'll hold questions till the end and somebody else covers it.

Very good. In that case, I'm pleased to introduce an Nguyen, who is Chief Operating Officer of Catholic Charities Hawaii, which, as you know well, delivers statewide social services, including housing, mental health support, Kupuna Care, and immigrant integration programs, so on.

Represents not just Catholic Charities Hawaii, but also the Hawaii True Cost Coalition, which is over 70 nonprofits serving more than 500,000 people statewide and advocates for fair government funding. As contract rates have remained stagnant for a decade while falling below actual as service costs. Thank you for joining us on.

Thank you Chair, Vice Chair, Committee Members. I'll try to keep it short because I'm actually excited about the question and answer time. But you know, we are the organizations that support Hawaii's social safety net, providing food to families, shelter to the unhoused, counseling for health for the youth, care for our puna and services for the survivors of violence.

Though today's briefing is on the immediate and expected impacts of the federal cuts, I wanted to begin by saying that our system was already under strain before this current crisis began. You know, from our survey in 2022, 91% of the community based organizations said their government contracts do not cover all of this cost of services.

87 replied that they're dependent on private funders to close the gaps as mentioned before, and critically, 40% reported that they may cease operations altogether if funding challenges persist. Moving to today, our most recent survey indicates that we are at a tipping point if we can go to the next slide.

As the situation has worsened, 50% of the community based organizations expect to reduce programs and to serve fewer people, 36% expect to decline future contracts altogether because it just doesn't make sense from a business model perspective. And many organizations have been waiting months for reimbursements forcing them to dip into reserves or credit lines.

These numbers translate into people the youth shelter in Hilo who has had to pause new admissions, a family services program in Maui who has to cut case management hours and the organization caring for our kupuna on Oahu who has reduced wellness and meal services as cost has outpaced the funding.

Community based organizations are facing not only cuts but also uncertainty with shifting information, unpredictable renewals and confusion over what will be funded next year. Next slide. The next question before us is what happens after the crisis.

As mentioned, we have seen patterns before where whether it's Covid or wildfires or sudden federal funding cuts, emergencies bring temporary resources and attention. But once the immediate danger passes, our safety net is left even more strained. Just as community needs to grow, the needs the community needs are growing.

As Catholic Charities we're also present in real time through the New Hawaii Relief Program. We're partnering with the state to help families affected by the current federal shutdown to stay on their feet and to stay housed, providing rent and utility assistance and helping them navigate the uncertainty ahead.

This program isn't just about short term relief, it's about preventing another wave of displacement and giving families a path to recovery beyond this crisis. Next slide please. Since we opened our application portal last week. The traffic to our website has been heavy.

As of yesterday morning, we had over 34,000 people view the program webpage and our hotlines have more than doubled in volume. We've already received yes, we have already received close to 11,000 applications going through the prescreening process and around 8,500 families have received links already to apply for the support officially.

Next slide I'd like to end by saying that larger community based organizations may weather short term disruptions, but the smaller organizations, especially those serving in rural or neighborhood island communities, often cannot. These groups are not just services providers, but they tend to be the only lifeline for many residents.

Even if a few of these organizations are forced to close, entire populations will lose access to essential care, stability and opportunity. And that's why the Coal Coalition is asking for systematic change.

We ask that, you know, change to adjust government contract rates and to reflect the true cost of service delivery, to implement regular cost of living and inflation reviews so that rates don't stagnate, and to ensure timely reimbursement so that nonprofits aren't forced to borrow money to fulfill government obligations.

Without these changes, the frailty of the the social safety net supported by community based organizations will continue to decline and the cost of rebuilding the capacity later will be far greater. Thank you for your time.

Thank you, Ahn. Lastly, allow me to welcome Shawn Kanaiʻaupuni—Dr. Kanaiʻaupuni is President and CEO at Partners in Development Foundation—to share about what they're seeing with their work around early childhood development and the lasting impacts of the lack of funding in that area, specifically their Tutu and Me programs.

From what I've seen in my years of admiring the work of Partners in Development Foundation, their programs honor the Kuleana for people in place, building self-resiliency and healthy secure communities across our islands.

Thanks, Terry. Aloha, honorable Chair, Lisa Marten, Vice Chair, Ikaika Olds, Representative Amato, and Takenouchi. Thank you so much for your time today and I want to give a shout out to the beautiful slides to Brittany. Brittany, my associate back there. Hopefully they make you smile because they've got lots of cute kids and no statistics.

No, there's a few.

Not yet, not yet. But mahalo for the opportunity.

I'm here on behalf of Partners in Development Foundation and our partners across Hawaii's education and community service network and really highlighting what my colleagues have said before about this urgent cliff facing us and also on the board of Hano and really wanting to give a shout out to their excellent work in and rallying us all to support the nonprofit community across the state and also, perhaps advocate for another round of emergency funding for nonprofits, which we very much support.

So, as you know, across the country, these federal budget reductions are creating deep uncertainty for programs that serve children and families. Hawaii is no exception. These cuts are not abstract. They have very real consequences for the people and places that rely on community-based and culturally grounded education and social services.

The Native Hawaiian Education Program is one powerful case study that I want to talk to you a little bit about.

For decades, the Native Hawaiian Education Program, NHEP, has been a cornerstone of educational equity and opportunity in Hawaii, funding that serves children, youth, families across the islands, not only serving Native Hawaiians, but all community members that walk in our doors, no matter what program.

And the Department of Education, at the national level, has zeroed out these funds, as you've heard from Trey, creating 46 million of the $56 million funding gap that will really devastate Hawaii's early learning network and will ripple across public schools, high institutions, workforce development, and family support systems.

So, my being here is really to call your attention and to see how we can strategize for the future. Next slide. The 20 million of these funds directly support early childhood education programs and serve low income and Native Hawaiian families in rural, remote communities across the state.

The remaining funds sustain youth mentorship, public and after school supports, higher education, teacher professional development programs that keep students learning and growing. So, the elimination of NHEP is not just one federal program ending.

It's the unraveling of an ecosystem that—and these dollars fund dozens of nonprofit schools and community programs that work collaboratively to nurture Hawaii's Keiki and Ohana. As I mentioned, 46 million of the federal funding goes—of the 46 million, 20 million of that goes to early childhood education and family supports.

So, this young woman at the center of my picture here is Lena. If you go to Waimanalo's Napono Program, you'll meet Lena, who, with a very warm smile and embrace, she leads caregivers in Keiki through songs, through stories, through learning, and creating a space where families learn, grow, and heal together.

She didn't start as a staff member. Years ago, she was one of those young parents in Waimanalo with young babies and looking for an affordable place where she could take her children to learn and grow, and that didn't cost anything because money was tight. And Napono became that place just for her kids, but also for her herself.

What she tells us, a quote is, "Napono didn't just nurture my children's early learning, it nurtured me as a parent and as their first teacher."

Those are effects that go that have lasted their family of six children as they grew up through the program, all six of them went to the program, and the experience transformed all of their lives. In Lena's case, she decided to become a volunteer for the program. Then she became a mentor, and now she is a site manager.

The best testimony is when we get to hire our participants as staff in our programs and that happens all across the five islands that we serve, and they get a chance to lead other families along the path that they once walked and get to say, if I can do it, you can do it too.

So, Lena's story is what happens when programs like Napono give families the tools that they need to survive and thrive, and we've been doing that for over 25 years. But today, that support is at risk.

With NETP on the chopping block, this pulls nearly $46 million out of Hawaii's education system and the 20 million that sustains early childhood programs that are on this map, and you can see the before and after pictures. The right now picture is all everything lit up, and then the after is what happens when the funds grow—go away—with the cuts, I guess.

And not only our PIDF programs, but also those run by InPeace and our partner, Keiki Opa' Aina, which, together, form our ELEU consortium.

So, representing all of us and the deep, deep concern that we have for the families that we support. That support is not only education and early education, but also wraparound supports like behavioral health, food, diapers, hygiene kits for those that don't have them, who might not have homes, and more.

And so, together, we reach thousands of families across the Islands, about 2,200 children birth to five and over 4,500 caregivers providing family based early education at no cost. We meet families where they are in rural towns, community centers, shelters, parks, Waianae Boat Harbor.

The proposed federal funding threatens all of our ability to maintain this access and continuity of care. We employ hundreds of people in rural communities across the state. The organization I lead, as I'll call myself the chief troublemaker right now, Partners in Development Foundation is a great example.

We've been an engine of federal—bringing federal dollars, federal investments—into to Hawaii, bringing hundreds of millions of dollars across the state for the past 25 years. The federal funds are 72% of our budget. I used to be proud that we did all this work and now it's like a big risk.

And so, how do we, how do we work together to make sure that our families and our children have the supports they need.

For our early childhood programs alone, this is a loss of $11.5 million and a funding cliff that jeopardizes the sustainability of Tutu and Me Traveling School and Kapa'alana Homeless Family Education program across 38 sites. I'm looking at narrowing down to two. Where should I choose?

I was saying, I was talking about this the other day and I've been talking, asking other people, which two communities? I don't know; I need your help. These are essential family sustainability programs. And this cut doesn't affect only one organization. It affects families across five islands, and that's why we're here.

Without that support, families like Lena's lose access to the very opportunities that change lives. And this is—for PIDF, we also have $5 million that also fund community programs like workforce development for youth that are in the just—that are justice entangled—public school programs that improve attendance.

Like in Kealakehe, if you've ever heard of the walking school bus, that's our program, that walks kids to school to make sure they're there and others. And we aren't standing by to watch these things happen.

We're out there advocating and talking to people and raising awareness so that we all can work together to understand how to keep these programs going, keep Hawaii's future growing strong. So, circling back, the 46 million next slide is just one example. I don't need to tell you about why this matters, right?

We all know that 85% of early learning happens in the first three years of life, and that across our state, kindergarten assessment scores are needing help. In some of our rural communities, Waianae, Waimanalo, some parts of Hawaii island, only 11% of children in our rural areas are passing the kindergarten entry assessment with what we want them to be able to have so that they're catching on and not catching up.

So, next slide. Each of these cuts has a cumulative and cascading effect, whether it's to housing, to food security, to health supports.

When one organization's funding ends like ours, it weakens the entire web of collaboration that holds our early learning and social support system together. If this funding cliff is not addressed, the consequences are far reaching. Thousands of children and caregivers lose access to quality learning and family engagement. High school students lose mentorship and tutoring and workforce development opportunities.

Youth lose access to work, to work in livable wage occupations, and that's where we need them. Public schools lose vital partnerships to improve attendance, behavior, and student success, and thousands of family members lose access to critical education, health, housing, meals, food resources, and trusted community connections.

We were about to launch a big food distribution drive, thank goodness we don't have to maybe, for a little while anyway, to help our SNAP affected households on Monday. So, we got good news today that maybe we use those, those resources in other ways.

The point is when we lose these programs, we lose not only services, we lose relationships, we lose trust, we lose opportunity that took 25 years to build and scale.

So, the last slide, I think, well second to last, because I do have one last slide that I want you to look at, is just that we want to partner and act together. We are deeply grateful for the Act 310 opportunity to support nonprofits across the state.

And we know also that that's a short-term solution. It's a bridge solution, and that the long-term means finding multi-sector partnerships and long-term investments to not be in this predicament again and to be able to see sustain our programs moving forward.

So, where we've been approaching doing a lot of federal advocacies, but also state partners, county partners, private sector, business sector, not again standing by idly, and we want to work with you to understand what your priorities are, as Terry mentioned, so that we can help and be part of the solution. By working together, we will, we will figure this out.

Next slide. Next, next slide. This slide. There's my little Shaka. And this is what we do. This is Waimanalo. And this is a graduation in Kapa'alana of the Homeless Education program. Last year, several of those children were the first graduates ever in their families, just so you know. Thank you.

I just want to thank my colleagues for sharing what they're doing from the heart and the head in the community. So, we're now open to any questions or any other insights you have for us on how we can work forward together to create a way out of this challenging time.

I appreciate everybody who came and has been sharing information, not just this year, but previous years as well, and I wanted to open it up first to my colleagues. Are there any questions? Okay, I have questions. So, you know, this is not completely unfamiliar to me, though all the numbers are, you know, having real numbers is really helpful.

I feel like from the state's perspective, like the, you know, the $250 on the EBT cards that we just did, we can't take that back. That's 40 million that we don't have to use to help you folks. Right?

So, these federal, in the same way that the uncertainty is messing with your programs, it's also messing with our budget. We don't want to risk doing nothing, and yet, at the same time we, you know, we're, when we spend down money, there isn't any other money to replace it. Right?

So, what I think would be super helpful is if you folks help us prioritize, right, the, the federal—our state budget is about 20%, about 1/5 federal. We can't make that up. Right? We can't make up. And that's just for our state budget.

That's not for nonprofits sector that was not getting state money but was getting money directly from the Federal Government. Right? So, we can't possibly fill that gap for our own state budget and other services, though I do view the nonprofit sector as kind of in two buckets.

Some of the services in the nonprofit sector are really just those organizations doing the state's work because we cannot fill our positions because our pay at the state level is low and hiring is cumbersome and we have a huge vacancy rate in our human services sector.

And so, we will have Catholic charities doing our work for us, you know, going to visit foster homes, what we are legally required to do and unable to do this because we can't fill the position. So, some of it is state contracts that it's really just doing our job.

And then the other is, possibly like our GIAs, supporting great programs that we value, but are not necessarily things that we are legally required to do. So, we obviously have to prioritize things that we are legally required to do, like visiting foster care homes.

But beyond that, you know, knowing that we can't fill everything, it would be really helpful, in my opinion, to have help prioritizing. And it is my hope that the news we got very recently about the most recent election, it, you know, bodes well for next year.

I really see the only way out of this hole as a change at the federal level. But in the meantime, we want to make our families here in Hawaii feel the pain as little as possible, and to not lose the infrastructure in our nonprofit sector that takes so long to build up, and the expertise and the teams that are providing and amazing benefits and work.

We don't want those to, you know, hopefully it's a temporary period and we don't want to lose that something that will take a very long time to rebuild.

So, I guess my ask is definitely it will have legislation. I have legislation last year on the true cost from a true cost coalition, and it made it all the way to conference, and that was our first time having that conversation. Everybody was supportive. Everybody understood the concept. But when it came to it, those—and that is just for state contracts, in order for it to be meaningful, it has to be a big number, right.

Putting in a few million dollars just won't make a difference to those many organizations who, with all the work they're doing. So, it has to be significant.

And in the end, it wasn't the priority for a significant amount of funds this past session. I'm hoping this year it will be but that would be for our state contracts. And I know that here we're talking about a lot of things that are not our state form tax that would be more appropriate for the GIA process.

I know we had double the applicants for the pot of money that was set aside. And Jenna, as Vice Chair of Finance, is on that Committee trying to help weed through and make really hard choices. I do not envy her. Right? It's heartbreaking to choose between really good report and services. Yeah.

So, I guess it, you know, if, if this sector, you know, within your own programs, are there things that can wait a couple years until we hope to be made whole again? And are there things that, you know, the loss would be incredible in the short term.

It was to help us prioritize. For me, that would be very helpful, right. This is not the only sector with needs in our state, right. We have invasive species problems. We have, we have problems in every area. And I do believe that we will put a lot of energy into this area.

But that includes Medicaid, that includes, you know, other, other programs that all of your clients benefit from and need.

And so, yeah, I guess my ask is not so much for an answer right now, but if through communication, if you could help us prioritize and get those numbers and early so we can start trying to work with our many chairs early on to set expectations before session starts on, you know, how much might be available.

We're having an economic downturn, which means we have less money than we hope to have to spend. So, I'm not trying to be super depressing, but it is a depressing situation.

And when you asked about what can Hawaii Community Foundation do, I think one really important thing would be to see where are the gaps that we couldn't help with. So, for example, on this next issue, right, we are able to bring in the TANF Reserve funds to help families with children.

And that's a significant wealth transfer that will leave those families that have mortgage, rent, utility needs significantly better off this year than they have been, possibly ever, but over a four month period. And then OHA stepped up to help Native Hawaiian families. You know, who is missing? Are there kupuna without children who are not Native Hawaiian?

You know, that, you know, I think again, like just working to see, you know, where are the pukas? Who did we not find a pot of money to help rather than every source of funding giving evenly across the board? You know, I think that could be helpful.

So, thank you for those insights and good ideas. I mean, just speaking for the Hawaii Community Foundation, that's exactly what we're looking at now is where those gaps are. In fact, when I last saw Ahn's colleague, Tina Andrade, the leader, she said, I'm most worried about Kupuna when I asked what to do to help.

So, we'll be focusing in on that gap identification.

And then, if there's interest in taking up Chair Marten and the offer of helping to prioritize what's most important at a time of limited dollars, if there's a way that we might be able to provide analytical support to Hano or additional analytical support to Uhero, we'd be more than happy to do that.

And then just, you know, we will, you know, one thing that I am thinking about a lot as I really have a good handle on it.

But I'm trying to understand who will become ineligible for SNAP, Medicaid, federal housing because they are not working and they are, you know, now going to have that requirement, you know, to be creative about creating volunteer opportunities, job training opportunities that perhaps are relatively low cost but not free, that we could pay, you know, nonprofits.

Are there things that volunteers, 80 hours a month, could help you with? If we pay staff to, you know, help supervise them, help channel their energies, help train them, and you know, and help keep them on their benefits. So, I think once we understand the number of people that don't qualify for an exemption and yeah, we're going to need to figure out how to keep people on those benefits because losing those benefits, all three of them, is going to be an enormous cost that we'll pay for in the end.

If we don't pay up front for Medicaid, we will pay an emergency room and you know, we, loss in quality of life and quality of health. So that's something that I think our nonprofit sector could be very helpful in.

And the population that we're asking you to help is not necessarily who you are looking to go out and hire, but there must be ways that it could still fit your mission, right, in terms of providing enrichment and education. And if people do, you know, take that step towards a job, they'll be better off forever, right.

Having people employed is always, you know, better for their health and wellbeing and confidence, etc. And finances. So, there's—I'm not saying that we shouldn't have that goal, but for people that fall through the gap, I do see our nonprofit sector as maybe a source of help.

And I don't mean for free, but a way to keep people eligible. So, that would be something that I'm hoping the various organizations can think about, like how could you be involved in volunteer programs and job training programs that we can, you know, qualify to meet the standards required by Medicaid, SNAP.

We always need people on our farm.

Yeah. And you know, and how good for the soul is that? Right? So, yeah.

So, Kupu, Kupu's head, Kupu organization has a lot of experience with volunteer work and they're beginning to look at what they might be able to do. But unfortunately, what we've learned too in the nonprofit sector is supporting volunteers, especially those who haven't had the opportunity before, needs volunteer coordinators.

So, maybe that's where both a partnership between philanthropy and the limited dollars of the state that might be more targeted might have an outsized return on investment.

I agree. And curriculum development. And I was speaking with someone, actually it's Aloha Care, and they have a program where they do training, providing English lessons, right.

And I'm like, oh my gosh, what if we had some people who are native English speakers be the tutors, conversational practice, and then the other, they're getting their volunteer hours, and then the students are getting their student hours and you know, to think of win-win solutions that, yeah.

And hopefully we'll end up having a silver lining that some of these programs will turn out to be so helpful that we'll want to keep doing them even when we're not doing it to meet federal requirements.

Anyone else want to respond from our panel or perhaps from Hano?

Any questions come to mind since? No? Okay.

One other thing I might add on your point on training and volunteering. So, the University of Hawaii system won a series of competitive grants several years ago for workforce development.

It was called Good Jobs Hawaii and it allowed lower income students to partner with the community college system to get non-credit but free training that then, I think, research from Uhero proved showed that those various people who got that additional training in skill areas in high need sectors such as health care and skilled trades and IT. Not only did they get the training, but they got better jobs as a result.

That should be able to count towards the 80 hour work requirement.

Education absolutely does. Yeah.

So, that's another opportunity and I think would be worth having a conversation with the University of Hawaii leadership to see whether there's something we could scale there.

That is a great idea. Okay, well you, you know, feel free. We are easy to find. So, feel free to reach out to all of my committee with ideas and information because sessions coming right up and we need to be able to make a case and a case with tiered options.

In terms of budget for, you know, the financial impact that this will have as opposed to all the other also very important, you know, needs.

And just to put it in perspective, you know, in the Department of Human Services we have a very large number of employees who are paid, who are federally paid, but they are state employees and we're paying all of them right now.

And they are unionized and if we don't pay them, they can bump people who are less senior than them and take their jobs, which creates total chaos because then you end up with people in jobs that they are not qualified for.

And you know, so the state is, is working already just to keep that staff paid and in place and to weather the shutdown. So, just, just so you know, not me, but our departments are really scrambling and trying to do things, you know, even within, and.

But yeah, I look forward to hearing exactly, you know, how we can do our best with our budget, with our limited budget and with partnerships, with creative partnerships, how we can find as many win-win solutions, keep everybody on benefits, and try to keep our most essential nonprofit programs open and keep that expertise and staff together.

Sounds like we're very much aligned and we look forward to working with you together. And thank you for adding your additional perspective of what the state has had to bear to step up to serve our citizens. I can guarantee you it's happening in communities right now on the nonprofit side, as you well know as well.

So, natural partnerships, because we share values, we're not going to let anybody fall through the cracks because that's not who are in Hawaii. We take care of each other.

We definitely try, but it's, it's, it's going to be harder because you can't, you can't print money.

True.

Yeah. But I do hear you. And we did have a meeting yesterday about the insurance price increases, which I have been aware of as well.

And we'll try to address that through both an increase in the contracts, but also through legislation to try to rein the liability in a little bit so that it's not just exponential, which the insurers have a natural business need to respond to.

Mr. Chair Olds, did you have something you were open to ask about?

Oh, man, no. It's just, it's, you know, depressing for us on a Friday afternoon. It was bad news followed by bad news. But we have to take a dose of realism, right? What's going on right now? A year and three days ago, I was on the other side of the curtain.

That was my last day doing street outreach. That was the last time I was working with my homeless family before I became this and I had to wear pants. Just two weeks ago, I started to do outreach again.

I finished my door knocking and I engaged with a family of three that had seven children that were living on a park. And we were actually trying to get them into Halemiola. That's the ideal space. But we, in my previous life, we thrived off of the gaps filled by the state that were plugged by non profits. Yeah.

And you got me with these darn children.

Me too. Every time I look at them.

So very strategic. Thank you. But you know, I'm big on that. I'm very big on early childhood education, access to services for families with children, particularly under the age of five.

But just a month ago, I was at the affordable housing meeting with Kupuna there, and there's another side of that tape and everybody's looking for money, and I want to give everybody money. That's why my wife is in charge of the finances.

But we, a few months ago, our previous finance chair had told us in one of our meetings, we talked about budget, engage with your nonprofits. The guys start telling, start typing up their belts with some of the conversations I've had, meetings I've had since, that has been kind of the narrative.

I, of course, would love to give everybody cash. Every, everybody gets money. Everyone's doing fantastic work. But having worked in a nonprofit side and having worked with nonprofit side for so long, I understand there's also a lot of redundancies, there's a lot of services. There's a lot of overlap.

That it gets to a point where nonprofits battle each other for data. Right? Everyone's driven by data, everyone wants—and when I used to work for Waikiki Health, I like to tell this story because we work for, I work for an employee by Waikiki Health. I work for the youth outreach, which is a...

So, we used to do outreach in all the park. That's not, that's not Waikiki Health's turf. That is Kali Palama's turf. They had an outreach team out that day and they saw our Waikiki Health lanyards. Ooh.

They came right over to us and we had to have a talk because we were in their turf trying to steal clients. But, you know, in this time, it's all, it's very important for us to be realistic on what we have. We're living in a strange time right now.

Tomorrow, a new Executive order can come down and it's just going to make everything crazy. For the non profits that are out there, they're doing that good work and are struggling. We will try. I will try. I do my—I'll introduce as many bills as I can to try to help people.

Will these bills be able to make it to get funding? And we have to be realistic about that. And so, you know, how many private, public funded programs are out there, right, where the state doesn't have to cover so much of those costs. For us at Yo, we, we used to monopolize on practicum students.

Practicum students fill so many gaps in our services in terms of providers. It was vital for our operation to actually have practicum students and we're very grateful that...had a fantastic relationship with social working students that had to come save away with us at our little facility.

But I, this is very eye opening for me and I appreciate everybody who was involved in this. Just know, you have my support. I empathize with everybody struggling to stay afloat. And then your clients again with these children got me right in the, right in the fields here, but we have to try.

We're gonna try and at the same time, I think we have to ask you folks to do what you can to continue to service the clients in need with a realistic vision of how much money you can expect from us.

Thank you for the realism and for how much you all care. You wouldn't be here serving the state the way you do on this Committee if you didn't care deeply. So, mahalo Nuke.

All right. Thank you all for coming, and with that, we are adjourned.

Aloha Everybody. It is November 7, 2:35 p.m. and we are convening an info briefing with the Med Quest program and the House Human Services Committee to get an update on some of our federal changes, short term and long term and the plans to address them. And I'm going to turn it over to Judy Moore Peterson.

Thank you so much. My name is Judy Moore Peterson. I'm the Med Quest administrator. That's the title for the Medicaid Director for the state. We do have a few, well, we have more than a few slides for you today, hopefully to share with you to help us walk through the program.

Let's go ahead and move to the agenda. And so today we'll be covering some of the basics about what is the Medicaid program. Some of the basic numbers will cover a little bit about the shutdown and the impact of the government shutdown on both Medicaid as well as within our community itself.

We'll also share about some high level impacts of HR1 on our program. And then we'll end with some highlights of some innovations that we are in the process of implementing that we would like to share to offset some of the negative, you know, things that are happening, happening within our program.

So some of the basics about what is the Medicaid program? It is a federal state partnership. It has within that federal state partnership it covers the Medicaid program covers adults and children, vulnerable populations such as people with disabilities, former foster care children, aged, blind and disabled individuals.

The Medicaid program covers all of the standard benefits that you would get with most health insurance programs, but it goes beyond that and it covers also long term care services, non emergency medical transportation. So it has a broader type of benefits that are included in all Medicaid programs.

Although it is a federal state partnership, the Federal Government puts in money on each of the for each of the, for every expenditure it has a federal portion to it. Each state runs their own Medicaid program according to their own policies and what meets the needs of their communities in the best way.

In our state that program is run out of the Med Quest division is part of the Department of Human Services and the name of Quest. So it's Med Quest. The name Quest is actually the name of our Medicaid program. So if you go to each of the states, they each have a different name for their Medicaid program.

Sometimes it's called like for example in Wisconsin it's Badger Care. Somewhere else it has very different names. It is a means tested program meaning that the individuals need to be below certain income criteria. And for some programs there is an asset test and for others there's no, no assets test.

So in our, in our state, as I was mentioning, where the Medcrest, we administer the Medicaid program to provide medical benefits for adults and children, we have about 300 permanent and temporary FTE in about nine offices across the state.

Quest is actually an acronym, so it's Quality Care, Universal Access, Efficient Utilization, Stabilizing Costs and Transforming Healthcare Costs for Members. We've had that name since the 1990s and it still holds true today. Very much so, as our Also of note is our vision for our program is that the people of Hawaii embrace health and wellness.

And the thing that I would like to call out there is that from our perspective, if we are able to provide this vision and provide our services and benefits, then it benefits the entire community and not just the individuals that we are directly serving. Oh, and it's, it's not Medicare.

So a lot of times there's some confusion, but it's, it's not Medicare. And for that I'm going to turn it over to Meredith to pick up the next pieces.

But thank you so much and thank you for inviting this information sharing. We appreciate the opportunity. So next slide we'll get right into the numbers. We thought it would be good to just level set and start with understanding who among us, you know, who's enrolled right now.

So what we have in front of you is a graph that shows and I just want to take a moment to explain what we're looking at and why it seems to be have an arc. So before Covid you'll see all the way on the left hand side, pretty stable, around 327,000. Yeah.

And then Covid happens and right, you see everything start to go up, enrollments go up. We know people lost jobs, they lost employer sponsored coverage. And thank goodness the safety net here in Hawaii was able to support. And there was a rule saying, hey, it's a pandemic.

If people are already covered by MedQuest, leave them there, keep them covered. If people become newly eligible, please keep them covered until the pandemic is over. That's why you see this growing steep arc. We went from about 327,000 to at the moment, this 468,120. That was at the official end of the Covid 19 pandemic.

At that point then the rules were okay. Now you have to start to redetermine eligibility. You have to take everybody that's enrolled. And the typical process is Once a year you look at the person's records, you're like, okay, are you still eligible? So that is the moment where we restarted that eligibility determination.

And so, you know, as we restarted, we heard from people saying, thank you so much for covering me in the past. I'm good now. I have employer sponsored coverage again. No need. So you see the enrollment start to come down a bit and then you see this sort of blip and it goes back up.

So I wanted to explain that that's where a couple of things happen. One, MQD was, sorry, our abbreviation, I might say MGD, it's Med Quest. But we were allowed by CMS, our regulators, to take a three month pause to make improvements, improvements to our system to make it easier to do these redeterminations.

At that same time, there were the Maui wildfires. So this dual event, we, we took this three month pause, we paused Maui for the longest, as far as we could. So during this pause, you see enrollment start to climb again because we're not doing that regular redetermination.

And then at the end of the three months, you see this kind of stuff stepping down as we redetermine eligibility again. Sometimes we, people hear from us, they get a letter, they're like, thank you, no need. Sometimes they're like, oh, am I still eligible? And we find out, you know, you're not.

But congratulations, you know, on your improved employment status. So people are coming on, but you'll see we still haven't come down to the pre Covid level. So right now we're at 388,430 people covered. Next slide please. This slide I wanted to provide you sort of a county by county look.

So just briefly, I'll explain the numbers that you see above the islands in green. That's the height, right where the enrollments were the highest at the peak, peak of that Covid protection era. And then below the counties in blue, that's where we are today. So you can see I've put in a decrease from the peak amount.

But again, everywhere across the island chain, we are still at a higher level of coverage than we were before Covid Next slide please. So this is a table that sort of just lays out for you what we just covered, but in a different format. So 388. And this is all kind of approximate rounding, right?

So about 25%, sorry, 27% of our state population is covered and receives healthcare through MedQuest. When we think about non disabled adults, that's about 46% of the Quest population. So 180,000 people. The reason this next row is highlighted, Affordable Care Act expansion adults. We want to pay attention to that. 127,000.

By and large, this is the population that is targeted in the HR1 Bill for most of the impacts and most of the changes that we'll have to navigate. Parent, caretaker, relatives, that's 50. And then our Keiki make up 151,000. So about one in two Keiki are covered through MedQuest. And then our aged blind disabled population, 58,000.

And then these last two. We just wanted to be clear that we do receive federal matching rate, different percentages for each group. But on average, if you average everything out, it's just under 60% is federally funded and 40% state funded. Can you.

I'm sorry, can you explain for our Committee the difference in the matches for our expansion population versus other populations?

Yeah, go ahead, I got that one. Yeah, so. So the expansion population is actually the, the matching rate is considerably higher than this base matching rate. So this base matching rate is 59, you know, almost 60%. The adult expansion population is 90% federal.

So one of the reasons that the HR1 then was able to save some of the savings that comes about is because the actions that they're taking that Congress took reduces the number of people who, who will qualify or are likely to qualify.

They're likely to lose their insurance, which means has a greater savings than on the federal side because again, it's 90% federal match.

Thank you.

And then finally, we want to make clear that the delivery system for care that we use here is managed care. We have five health plans and they're all shown right here at the bottom of the chart. Next slide, please.

Actually, Next turn, skip ahead.

Yep. All right. We wanted to start. The slide you're looking at now is just. I won't read it to you, but we just wanted to make sure because we've had the question, like with the Federal Government shutdown, is Medicaid closed and. No Medicaid is open. Medicaid is funded. And I want that.

That's some of the messaging we're trying to make sure people understand is if you're covered by Med Quest, you absolutely have access to your care. Please do go see the Doctor. Our offices are open, we're fully staffed. Pick up your medicines. So no Medicaid continues to be funded during this shutdown. Next slide, please.

And then the next three slides, I just want to acknowledge before we get into them, they're not actually necessarily about Medicaid, but They do have to do with the healthcare landscape. And we wanted to address it because we know that when we talk about why are we shut down, what's at odds, what's going on.

So we wanted to address the expiration of the enhanced premium tax credits and the impact that that is having here in our state and for our people. So these enhanced premium tax credits were first made available as part of the American Rescue Plan act in 2021, and then later they were extended through the end of 2025.

Well, we're right up here at the end of 2025 and hopeful that those tax credits can be extended. They really do help make coverage affordable for a lot of our people. And so that that is the core of what this current disagreement is on the federal side.

We also know that without the extension of these tax credits, people will experience a really sharp increase in their monthly premiums. The other thing that's going on that's important to know is there's a gap.

So when you're, when you immigrate here and you're under a five year waiting period before you can access benefits, you're not eligible for Medicaid.

So one of the safety nets for our immigrants who have been here for less than five years has been, well, you can't be eligible for Medicaid right now, but you can go to the marketplace and you can leverage premium tax credits to help make it affordable for you.

And so one big change that's happening right now, because it's effective with the January 1st coverage date, is if you're an immigrant here less than five years, that safety net has been eroded a little bit because if you're under 100% of the federal poverty level, you can no longer access premium tax credits.

If you're an immigrant and you're over the 100% of the federal poverty level, you still can, at least for the next year, you still can access those benefits. So it's creating vulnerability in an already very vulnerable group.

Can I ask you, does that apply to COFA residents as well?

It does not. Because fortunately COFA are covered fully by Medicaid. As long as they're fiscally eligible, they're eligible for Medicaid. So this is more for other immigrants who haven't met their five year far.

And then lastly there we just wanted to acknowledge that some of the changes in what a qualified immigrant would be, those changes would go into effect on the marketplace in another year, January 1, 2027 further eroding who would be eligible to leverage premium tax credits or Coverage on the Marketplace. Next slide, please.

So open enrollment just Saturday, first day. So we're just one week into it and we have people hard at work on the in the field. MedQuest supports something called Kokua Services Program, where people do street outreach, helping people get enrolled, stay enrolled. We've asked them to collect stories so that we can understand firsthand what's really happening.

This is a story that was collected this past week. So I'm an older single dad with a teenage son. My wife passed away from cancer. We went without health insurance for over three years. But last year I started to have heart problems, so I needed to get insurance.

We were able to get insurance on the Marketplace since I received $1200 in premium tax credits, which helped lower my monthly premium to $571. This year, my tax credits went down to $895 and the cost of my insurance doubled. Now I have to pay $1,108 each month. I don't know what to do. I can't afford that. I.

And then another story, and I just selected two of the many that have already been collected. But another story a woman shared with us. Last year, my insurance was $254.98 a month. I just found out that starting in January, I have to pay $497.10 each month. That's twice as much.

I can't really afford it, but I have surgery coming up, so I don't have any options. So this is what we're finding right now, the real impacts of those tax credits not being extended in our communities. And with that, I'm going to turn it back over to you, Judy.

I'm going to start a review of the impacts on Medicaid of, you know, other impacts of HR1 or the budget Reconciliation act, as it's actually also known, or the one Big Beautiful Bill Act, as it's actually also known. Other people have filled in the B's with other words. So this is on the Medicaid impacts.

And one of the first things that I wanted to share with you, and it's a pretty detailed slide. This is a detailed slide that lists all of the impacts. We are actually not going to be covering everything that HR1 how it's impacting. We're only going to cover the major impacts, the primary ones that we're dealing with first.

So, but I at least wanted to. We wanted to make sure that you have that information for your. For your. Well, for your informational purposes. And then one set of one Sort of category of impacts has to do with Medicaid eligibility. And we've broken this into a couple of different parts.

First generically on eligibility and then we'll do a deeper dive on the impacts on the ACA adult expansion population that we noted at the top that Meredith covered at the top. Top. So one of the first areas in, and you'll sense a theme here is on immigrant eligibility.

So prior to the passage of HR1 and still currently as exists in current law, there's a broad range of non citizens who can who qualify to be covered under Medicaid, including and this includes individuals who are lawfully present, certain Cuban Haitian immigrants, domestic violence, asylum trafficking victims, et cetera, including the Compact of Free Association residents who are here.

Starting on October 1st of 2026, that list has been narrowed. So there's a list there of these individuals who are currently present. They are lawfully present in our country and in our state, residing here lawfully.

They will no longer qualify for Medicaid and we will be needing to send out information to them that they will know longer qualify. And those include refugees, humanitarian parolees, asylum grantees, certain spouses and children who are fleeing domestic violence and abuse, as well as certain human trafficking victims.

Those are the individuals who will no longer have access to health insurance through the Medicaid program. Program. We estimate that there's approximately 1200 to 2400 individuals current people, people who are currently covered who are in these one of these categories.

Part of the reason we don't have a tighter number yet is because we haven't needed to collect this level of detail regarding their immigrants status. And so we don't have it for everyone.

And so we're needing to go through and do the research etc to find out to make sure that we can identify and appropriately provide the appropriate notification. Most of these individuals will lose their Medicaid coverage, their full Medicaid coverage and will then only be have coverage for emergency services.

And it's a pretty high bar for the, for the emergency services. It needs to be loss of life or limb and then we can cover that coverage only.

So that's after they go to ER. So. Okay.

Or hospital. Yep. Yeah. And then some of the individuals may we. We actually also run a state funded program. You may recall earlier I was saying all, all Medicaid expenditures have both a federal Fund portion of it as well as a, a state Fund portion.

And so we as a state made a choice to have a, to continue coverage for individuals who are aged blind or disabled using state funds. Only they're here, they're lawfully present here, but they don't meet the citizenship requirements under the Medicaid program.

And so this of these 12 to 2400, if some of them would qualify under the age blind disabled program, then we would move them to the state which would then mean that we would, that it's going to be increased costs for those individuals because we won't have the federal match any longer.

The other change is regarding something called retroactive coverage.

There's another provision within the Medicaid program that if that currently if individuals have medical expenses, they're uninsured, they have medical expenses and up to 90 days prior to their application for Medicaid and they do qualify for Medicaid, then we can cover their medical expenses during that, for up to 90 days prior to their application.

This changes that retroactive period effective 11/2027 so that it changes it to that adult expansion population. It changes it from a three months time period to a 30 day to a one month period. And then it changes the other Medicaid and CHIP eligibility eligibility categories that changes it to two months.

Is that what they call the look back or is that something different?

A little different.

But yeah, rather than a look back, it's just that amount of time where if I show up today and I have a broken leg and I don't have health coverage but I forget to then apply for Med Quest to cover it and then I remember next month or two months from now when I get the Bill, I forgot I wasn't covered.

Wait, I can apply and go all the way back up to 90 days right now? Yeah.

Today the hospitals use, I mean oftentimes the hospitals will. That's one of the things that they're working with. People come in when they check their insurance coverage and they discover that they are uninsured and they help the individuals apply for Medicaid and then we're able to do it to cover them.

So if those applications or we don't know within that time period, it leads to a couple of different factors. This has two different factors or impacts. One is on the individuals that themselves in that they are then responsible to make those payments.

And so we know that medical debt up to the Affordable Care Act, up to the ACA. The passage of the ACA medical debt was one of the number one reasons that people went bankrupt. It caused a great deal of damage to families and communities.

So the ACA was able to help and this type of coverage helps cover cover those debts. So we would anticipate that that would go up if indeed people can't or don't get their applications in within those new shortened time frames.

It actually also will increase uncompensated care for hospitals because again, if individual individuals would qualify for Medicaid, that means by definition that they're low income and have, they're have economically disadvantaged and have, have difficulties paying for those. And so hospitals then will deal with increased number of uncompensated care along with other provider.

The other change that will, it will have a slower impact, but it will have an impact over time is there's a two step process for eligibility to qualify. For individuals to qualify for long term care. One of the things has to do with assets and when you have to count something as an asset or not within the.

Well actually this is for, not just for, I guess this is for long term care. There's so many different rules, so many eligibility, so they have to meet certain asset tests.

And one of the things is that people are, are allowed to have their home and the value of their home does not get counted as an asset until the home equity limit goes up to a certain level. And so currently a little over. Yeah, currently the maximum is here on the slide. It's a million 97,011 cents.

So and under current law, before the, before this bill was passed, it was inflated annually. And what Congress did is decide to cap that at $1.0 million regardless and then it will not be inflated over time.

So the, so for individuals with a mortgage, et cetera, this is not likely to have an immediate impact on them because most people, their mortgage is going to offset the value of their home. Their home equity isn't up at that level.

But if you think about many of our families and our kupuna, they've had their homes for generations and $1.0 million is not a lot here, here in, in our state.

And so for, for locations that have high home values and people who hold on to their homes or have multi generational homes etc, then this is where, where that can have a negative impact because then anything over that $1.0 million gets counted as asset.

And we have to take it into consideration as to you how much coverage we can provide for that for the, for those individuals.

If an individual owns that home jointly, is the value split?

If they're applying jointly, it's treated differently if it's a dual application or if they're applying separately. So if they're applying separately, the whole value is split for this one and that one. Otherwise the value is considered one for a dual application, if that makes sense.

So if it's owned by a couple, for example, then it would, if it was a $2 million home, then it would be considered $1 million value each or no. So they would still qualify.

You know, let us get back to you. I want to make sure it gets a little tricky. So let's get back to you on that as well. Right.

Yeah, this is just part of it. Yeah. Income is one thing, assets is another thing.

Yeah. Okay. Okay. So, yeah, if you could.

Yeah, we will, we will. We'll get back to you. Thank you. Okay. So now we're going to do a deeper dive on the Affordable Care Act, the adult expansion population. There's a number of different changes there, and I'm going to turn that over to Meredith.

Okay. And this is, you know, in the beginning where we highlighted the expansion population. So these are the three areas that we're paying attention to. So, number one, increase in the frequency of eligibility renewals. So right now it's once a year and we keep up, but it's hard. It's. There's a huge volume to go through.

And this is saying for that portion of the population, the 127,000 people in the expansion, instead of looking at them to make sure they're eligible every year, please look at them every six months as a requirement. We know that when you do this, it introduces vulnerability for people.

People who may be living in great difficulty may have a harder time keeping up with. I got another eligibility notice. So we worry that this could create what we call churn, which is some people may lose coverage not because they're not eligible, but because it's hard to keep up with the renewal requirements.

So we're keeping an eye on that. That will also double the workload for our eligibility workers, which is going to be challenging the second area. And we're going to spend a little more time in a couple slides digging more into this one. One, the work and community engagement requirements.

So right now, what's happening is right now we don't have work requirements. What will happen in another year? Is anyone age 19 to 64, there are some exemptions we'll go over, but basically 19 to 64 years old, and you have to meet these eligibility requirements to starting December 31st of next year. We're waiting.

The Health and Human Services is going to issue an interim final rule and clarifications by June of next year. We can't wait that long. So we in all states are starting to make some assumptions on what the implementation rules could be. So that work is underway right now. Qualifying activities include employment, education.

So if you're enrolled at least as a halftime student or you perform community service. So we're looking for 80 hours a month. That's equivalent roughly to halftime. And you can combine all of these things. So if you're working for 40 hours a month and doing community service for 40 hours a month, you meet your 80 hours.

And we'll go into a little more detail on that and then the third thing is again, something that our community is not used to that's covered by MedQuest, which is introducing mandatory cost share. So that's when, you know, people go to the doctor and you have to, you know, have a copay.

This can be really difficult for some of our people living in poverty. The mandate is that it cannot be zero and it cannot be more than $35. So we'll be working in collaboration with all our healthcare partners and community to see how we move forward here.

I want to note that certain emergency mental health visits, substance or alcohol use treatments, preventative services are excluded. So there's no copay for those services as well as any services conducted at our FQHC will not have to collect those co pays. And again, that doesn't go into effect for a couple of years. So that's October 1, 2028.

Since that's farther out, we're not really focusing on it right now because we have much bigger fish to fry with the community and work engagement requirements. Next slide, please. Okay, so who doesn't have to meet these? We already talked about it's 19 to 64 year olds. Here is who doesn't have to meet these.

So pregnant women, individuals who are entitled to postpartum coverage, foster and former foster youth, those covered under the parent caretaker relative group, Indians or urban Indians, veterans with rated disabilities, folks who are medically frail, folks undergoing alcohol use disorder or substance use disorder disorder treatment.

If you already meet the work requirements for TANF or SNAP, you don't have to additionally meet them for Med Quest and then parent caregivers of a dependent child, 13 years of age or under, or of an individual with a disability.

I'm just going to stop here for a second because it's very close but different than the SNAP work requirements. For SNAP, if you're a parent of someone 14 years and younger, then you don't have to do work requirements, but for Medicaid it's 13 years or under. Why is a really good question. I appreciate that.

I don't know the answer though. And then I also want to call out the difference because you might have noticed that I said earlier in one of the earlier bullets that parent, caretaker, relative, group, if you're in that group, you're not subject. So why am I separately calling out parents of 13 year olds?

So parent, caretaker, relative, they're not part of the expansion population because they're at 100% of the poverty level or below. And so they're not part of expansion and that's why they're not subject to these requirements.

But if you're over 100% of the federal poverty level then you have to have a child that's 30 or younger or you're helping caretake for someone with a disability. Question.

Yeah. On the medically frail, how do you define that and who documents it? Can it be self attested or do you need like a Doctor's note or what?

Great questions. Those are the very questions that we are wrestling with currently. But we have a definition of medically frail in our HRS or sorry in our administrative rules. We, we did not bring that with us today but we, I actually.

Know, know what you know, I know what that is but I don't, I don't know how you're going to interpret it and I don't know how you're going to document it. And so I just wonder what you're thinking of.

I know you don't know until June what the rules are but you, you must be kind of contingency planning.

Yes, we are, we are considering everywhere that we can have flexibility in allowing self attestation with follow up of a verification of documentation at a later point. That is what we're considering. We actually also have to. CMS has been giving us hints of, we think that this is what we're going to be doing.

So it's not coming out in official rules.

And that's actually most recently one of the things that they have indicated as how they're leaning in the collection of this information is okay when people are first applying and you don't have any information on whether they're medically frail or not, then you're allowed to collect the self attestation, et cetera.

And then at the time of renewal, while you can accept it, you will have to find a way to verify it. And so that's one of the things that we're looking at right now is what are the sources of information that we have for which we could verify.

So we could look at claims data we could look at, that we would have, we could look at, you know, partnering with the health information exchange. There's different, different things we could get, collect information from providers, et cetera. So there's different things that we would, that we're hoping to be able to look at to verify.

And again we're trying to look at information, sources of information that we have available to us so that we don't have to require people to turn something in which creates an additional barrier. And the minute that you Start putting that you have to ask for something etc. And put those barriers in. Then it causes challenges and.

Causes barriers for administrative complexities and paperwork. Challenges. Right. Pardon me.

And then we save federal money because we can't get coverage.

Okay, we save, we might save federal money but as you know, we're not saving money here because then we, it comes through.

Yeah, so yeah, I mean that is the whole point. Right.

That is rules that. That is, that is. Yes. Yeah.

And how is HIPAA being taken into consideration within collecting this private information about individuals?

Yeah, we do collect information, some medical information today for certain groups of people. And so we do have ways to collect HIPAA. Yeah. That are, you know, that we have to today that are HIPAA compliant. But again we want to use, we want to minimize that as much as possible.

And again we want to use self attestation where we can and use data sources that are available to us where we can. Thank you.

And the final group just bulleted here are incarcerated individuals up to 90 days after release don't have to meet work requirements, but 91 days and on then you would have to meet work requirements. There is a hardship waiver for folks who are being treated out of state due to their medically complex condition.

So they would also be exempt. All right, next slide please. Yeah, so I sorry, I just wanted to make sure because we covered a bit of this but again 80 hours is the standard working community service or a work program or at least half time enrolled as a student. This is an interesting one, the second bullet here.

You can also qualify by having monthly income that is at least 80 times the federal hourly minimum wage. That wage is $7.25, so that totals $580 a month. So, so if you have, we believe the clarification is earned income of $580 a month. You also meet the standards of work requirements and then you would be okay.

Do you know if that is the same rule for SNAP and federal housing?

I don't think it is. Yeah, we believe it is special for us.

Okay.

Yeah. And, and as you will have noted, the federal minimum wage is lower than what ours is.

And then in terms of verification, states are required to verify at the point of application. So if you're applying today, I need to check like hey, did you meet work requirements or community engagement requirements if you're going to fall into this expansion adult area? We had the option to look up to three months proceeding.

We think it would be beneficial to our community to just look at the previous month rather than requiring it for all three months prior.

Then at the point of renewal, we believe it would be best for community for us to open up the full six months and say did you meet these requirements requirements during any one of the preceding six months so that we can renew you. So we can look at that verification for just that month as an indicator.

And then we have ex parte requirements, which we do already. We, this is where we shine very bright across the nation. We have one of the highest ex parte rates in the nation. That means simply that we use really good data sources to, to verify at the point of renewal, somebody's continuous eligibility.

As long as we can verify you that way, we don't need to bug you, we don't need to send you the pink letter and say give us more paper. If we can find that information on our own, we do. So we're very happy to have a really high ex parte rate.

So we have no problem with the ex parte. But what we're trying to figure out with different systems vendors now is how can we build CP some of these work requirement systems into our ex parte system so we can also remove the burden from our public.

Yep, this, this whole area is so interesting to me. And again, I keep asking you questions that are beyond your Department, but I would love to have a cohesive system where those work requirements are shared across departments or requirement for public federal housing, for snap, for Medicaid. And do you think that can be built in?

Are there any privacy issues or data sharing prohibitions within, possibly just within the Department of Human Services, to be honest. You know, to share that kind of data so that we don't have to duplicate that expense in our state.

Yeah, I mean I would, I would sincerely hope we, we can do that. We always have to go through the process for data share agreements and work with our deputy AGs to formalize that. But right now we share.

So for example, during our Covid that unwinding period, we were fortunate enough to have our SNAP agency share with us information on people who are eligible for SNAP.

Because that was one of the, hey, if they're eligible for SNAP, that we could move that into our ex parte system and say that means they're going to be eligible for MedQuest, we can just renew them. So we have history. What about public housing? We haven't done that with public housing.

So we should think about what that would look like and how we would be able to get there. Because you know, what you're saying makes.

Perfect sense and we do know that Enterprise Systems Director Sakura is actually also very interested in this particular area and is working with various different departments to see what's possible.

All right. And then just noticing we do have outreach and due process requirements. So again, none of this is happening right now. And so we can't stress that enough because we're trying not to. To create despair right now where people should still be using their medical, going to the doctor. And we do have a requirement.

People will be notified next year if they're going to be subject to these work requirements. They will be notified well in advance of these work requirements, of their renewal. So nobody will be surprised or caught off guard like I didn't know. So we will embark on our outreach campaign to make sure people are aware.

But again, it's a targeted message because not everybody will be subject to the work requirements. So we want to make sure that our aged, blind, disabled category people, our parent caretaker relatives, our Keiki folks who are exempt, aren't hearing the message that they're to going. Going to have to meet these requirements.

So we're working on what that messaging will look like and how to pull the right data to make sure the right people are getting that right message.

And how are you going to like, include other stakeholders in helping disseminate that message, like nonprofits that maybe you work with communities that don't speak English or other insurance agencies or, you know, how will you. You let them do some of your work for you?

We, we love our community partners. Our health plans are tremendous. The way we got. Excuse me.

Through our Covid unwinding period was full credit to our very talented staff, but also to the many community partners that we work closely with that amplified the message that work with our shared constituencies to make sure people are hearing the message over and over again from different storytellers, from different voices to get that trusted voice so that they hear it.

We think we'll use the same strategy because it works so well for the unwinding. In using all of those community partners and healthcare partners.

We had shared messaging, shared targeting messaging that we ran past that the community groups. We had the materials translated into 19 different languages. Yeah, so close to. I think, yes 17,18 different languages to try to get everything out. And working with all the various different community partners.

What happens if somebody is not compliant and they lose coverage? Like. Like if they then become. Are there rules around becoming compliant and regaining that coverage? And is there a lag or, you know, like with snap, there's rules about not.

Yeah, they get kicked off for a period of time. Right. They can have it for three months and then they can't sign. Like if they become, if they do, if they become compliant, in other words, they get their 80 hours, then we are able to re enroll them.

And is there any sort of punishment? Like let's say you at that six month mark, you're like oh wow, you've been on coverage for the last six months but you were not working. Is there any penalty?

No.

And for the state, is there any penalty like with our error rate that we're pulling penalized in terms of our cost share because we didn't keep track of that?

Well, they the like they, they would, we would have had to make sure that they were eligible when they first started. When they first started. So it could be. But let's just pretend someone was, Someone was, was eligible. They done their 80 hours. We have documentation that they did their 80 hours, etc, we say great, thank you.

We enroll them, they're enrolled for the six months. They come up for their six month renewal and it turns out for whatever reason they've not met their 80 hours during any of that time period. They didn't make $580, they didn't do any volunteer work, et cetera, nothing for that whole time period.

Then we did our job correctly in determining them eligible. But then we will not be able to renew them. We would only be found in error. And then, and bad things do happen to us when we have error rates. Not as severe so far as SNAP, but maybe that's coming down the line. But not right now.

But then those, if we continue to cover them, that's when the error would happen. But then if we did the job correctly then they would get dropped. Those individuals would get dropped from coverage.

Okay, so they would, let's say at that point you say oh my goodness, you don't qualify. And here's a case manager that is going to help you get into a job training volunteer program right away.

Then would they not be able to get coverage till after one month, within a calendar month that like 80 hours within a particular calendar month or is it like you know, 30 day period that could straddle months?

Or do you know if I'm understanding, I want to make sure I'm understanding the correct your question correctly.

So if at the point of application there were no previous months that they worked but they had a guarantee that hey I have a job or I have these community engagement opportunities coming up that I'm dedicating myself to, so that's going to happen. So can you please renew me? Is that.

No. My question is, you say, oh my gosh, you, you are not qualified for six months. They didn't do anything to you with a case manager that is going to get you into a program so that you can qualify. So there is going to be a lag. I'm trying to understand how long that lag is.

So let's say it's the middle of the month.

Right.

And they start tomorrow, right? Do they? Is it a 30 day, you know, a month long period from June 15 to July 14 or does it have to be a calendar month that. Okay, no, we have to go start from July 1st to July 31st.

We typically don't run by calendar months. We typically run by, you're here on the 15th and so we can get 30 day period.

But I do, I want to follow up on a couple other things that you did say and that one of the things is like, oh, we're going to assign you to a case manager.

Well, we do not have case managers that do that kind of work, which is different than what you might find with SNAP or the other programs. We do, however, work with our health plans. And we know.

And one of the things that, one of the areas that we are having to look at in expanding what it is that we do as far as expanding opportunities, et cetera, is helping to identify those areas, helping to identify community engagement opportunities, community work possibilities, volunteering opportunities, education opportunities.

But we have, we MedQuest do not have any of that set up today. And so it is all that, that work of, that proactive work of working with individuals is all new to us. It is work that we want to do. It is not required work to be in compliance with the law that starts January 1, 2027.

So we are having to prioritize our work right now in getting ready to be compliant with HR1, which is determining whether people meet this requirements or not.

And focus there, what do we need to do in our systems so that we can be sure that we're compliant and then prioritize how much more can we do as quickly as we can do it for as effective and efficiently as we can do it to do that other additional, more proactive work in working with individuals, connecting them with opportunities, etc.

And I'm not suggesting that.

MedQuest should provide case management for everybody. I'm thinking that more connect them with, if they go to a federally qualified health center, there is case management there. If they, you know, so directing them to the right person.

And so that would mean your staff would need to know what all the options are and just sending them, sending them to a place where there will be somebody there to help them efficiently and quickly and understand their situation.

Right. And in theory, we should be doing that from day one. Right. Because it's like, it's like to have six months of, of not. Of not being engaged.

It's like we, we're hopeful that we can do as much as we can for the entire, that those entire six months to try to help keep, make sure that people can be engaged and stay. Stay covered.

I apologize. Please continue your presentation.

Thank you so much.

No, these are an area where I have so many questions.

We love it and thank you. That's. It's actually useful for us, too. Next slide, please. And we're going to circle back to some of the questions you were asking. But we wanted to note there's a prohibition. We're allowed to get waivers to do a lot of things differently. But HR1 makes clear you cannot waive any of this.

You must, you must do these work requirements. Interaction with other provisions, again with the Affordable Care Act, something that's difficult and erodes the safety net a bit is the marketplace has always been there. If you fall off of Medicaid for whatever reason, you're no longer eligible.

You can seek coverage on the marketplace, but there's a provision that says, but if you fall off of Medicaid because you didn't meet the work requirements, you are not eligible for any subsidies on the marketplace. So there's no safety net there. You don't meet the work requirements here, you get no subsidies there.

So it's worth noting that challenge there and then this prohibition on conflicts of interest. So basically this is saying you guys cannot just have your health plans help you with this and have your health plans attest, like, zero, we'll, we'll do this work for you. We have, There are members, right?

We showed you that there's five health plans. We'll just attest. We talk to these members, they're meeting the requirements, they're good to go. We can't do that because it's a perceived conflict of interest. There's financial interest in keeping the members by the health plans, but the health plans are so excellent at working with the community.

So we do want to figure out ways to leverage working with health plans to do things kind of like what you were just speaking about. Chair of Connecting with Opportunities for Volunteerism. You know, connecting with work opportunities. And there's no prohibition from the health plans helping in that way. Just from a testing.

Is it possible for the health plans to provide you with data so not just say, oh, they're eligible, but to be a source of collecting? No.

So the eligibility that some sort of electronic system will gather, like I, I did some gig work for this many hours and I have this volunteer thing and I go to school and all of that adds up to 80 hours and that will who like as an individual be going online and inputting that or how would it work?

Like, I don't understand. It seems so incredibly complicated.

Thank you for that.

Yes, it is. Which is why we'd like to do it once, not for three different programs. But how could it possibly actually work?

So these are all such really good questions. Today from 6am to 11am because it was done on Eastern Standard Time, there is a huge long vendor fair just on this Work requirements, community engagement requirements, different vendors nationwide. Everyone is pulling together to show what they can do to help in the ways you're talking about.

So our technical team attended the session today that was from 6 to 11. The next session will be on Monday. From 6 to 11. They're gathering all the info, assessing.

They've got some sort of score sheets with criteria that they're using to assess the different models that are being presented to see what makes the most sense for our specific and unique needs and what will make it always with the eye.

Our North Star is always what will make it the easiest for our people, for our Members, so that they're not having to struggle on the proof side, you know, that we can facilitate that in, in the best way. So we'll know more once we hear back about that assessment and what the solutions look like out there.

Can I just add a little bit to.

I'm sorry, do you think that it's something that, for example, if there is a volunteer program at the zoo that is specifically qualified to be part of this and they are possibly even getting state money to have volunteer coordinators and do this work, can they log the hours on behalf of the participants?

If the participants are maybe not that tech savvy?

Yeah, we're hoping that we can find ways to have that happen. So we're looking at, as Meredith was noting, we're looking at like different, different. We're prioritizing different kinds of solutions so the first layer of solution is data that is automatically available or that is collected on individuals that we could access.

So you think about state wage data, we can have agreements with them to get that information on a regular basis. We can get information on some examples of income, income, other kind of income income data. The next. So there's a different kind of data sources that are busily collecting this information on income.

It's primarily on income, but there's actually also information on education. There's a national student something database verifying enrollment, verify college enrollment and training, et cetera. So there's different sources that we would be able to automatically check to see and to clarify.

Then the next, the next set as information that individuals can consent to say I'm willing to share this information that's consent based collection. And there's a bunch of different data vendors right now that are collecting information on the gig economy or, and other kinds of self employment that, that are similar to that.

Sort of like if you were an Uber driver.

Yes, they automatically. And then me as a, as a, as a Medicaid member, I can consent to have that information shared. Now that requires, that requires action on my part. So it's different than the automatic data but it's automatically collected and automatic.

Once I consent it's automatically collected and then shared with us so that I don't have to do anything. It's already shared. We're going to have that, we're going to renew you if we can as another source.

And then the other source of data that we're looking at and thinking about and considering is there's a vendors or software companies that operate in the space called closed loop referral systems for health related social needs, social determinants of health needs.

And what they're doing is they're partnering with health organizations that when these, the FQHC or the community health center, the hospital, a Doctor's office, they're doing screenings to say do you, do you know, do you have food security? It's like how are you doing on your housing etc.

They're doing screenings on social factors that we know impact individuals health. And what a close dip referral system is is that that provider, that healthcare provider can refer to. It's like oh well we can refer you for services to the food bank, to this other thing for nutrition supports just as an example.

And then the referral, the community based organizations are actually also signed into those organizations that referral system and they pick it up and then they reach out and there's that connection and so that the food, the nutrition services are met.

What we're thinking about is, well, can we use that similar referral system for volunteering or for work opportunities with the community based organizations? Because a lot of them have volunteers, use volunteers and maybe we can make some connections there.

So that's another area in which we're trying to think for other kinds of solutions that we could modify to use to help us address this need as well. This is just a few examples of what we're thinking about right now.

Okay. And what about people who like, are in their own business? I say, I'm gonna start a business and I'm just working by myself at home and maybe I go to craft fair sometime. And I say, Well, I worked 80 hours this month. I didn't sell very much, but I sure tried.

I think we would also work with that. And those are some of the things that we're working through now. But also for that person person, if they earn through their, you know, their own business, $580 a month, then they're, they've met their requirement.

So I think we'll have a lot of people that'll be a, a nice way for a lot of people to be able to demonstrate that they do meet these requirements. But say they're, they're not, they're, they're trying really hard. Like you said, they didn't make $580 that month, but they can attest to.

But I worked this craft fair and that craft fair and I did this. What we're looking for are ways to. Be able to document them. Yeah.

So as, as it comes together, it would be so useful to share that and to think how our different, you know, stakeholders in the community could be helpers in that.

We're, we're right there with you. Okay. Yeah. Yep. With, we think that bringing in additional brains into helping us with the service is super helpful.

I have a couple more slides and I'm going to move quickly because I know we've gone long. The next slide is just an overview, more of a myth busting slide that we like to include where people might be under the impression that nobody on Medicaid works, that people on Medicaid just sit at home and you're not working.

And in fact, that's not the case. So this is just a study from Kaiser Family foundation that tells us that. And this is a nationwide stat. Right. So ours will be a little different. But nationwide it's showing that 44% of Medicaid recipients work full time.

Another 20% work part time 12% not working due to caregiving 10% not working due to some kind of illness or disability 7% not working due to school attendance. And you'll see, you'll hear like these are all the things that are exempted from work requirements already. Right.

And Then only about 8% are not working due to retirement or inability to find work or, or for some other reason. So it's a very small portion that would technically be the target of these kinds of work requirements.

If we look at just our state, we know that of our MedQuest enrollees, 61.5% are employed either full or part time. So it's good to take all of this information in, in that context as well. Well, so we don't think that, zero my goodness, it's everybody. Right.

But it's a matter of documenting that. It is a matter of documenting.

That's exactly right. Exactly right. It's, it's, but it's not a sense of these people are going to get to work. Many of them are already getting to work. They're, they're there working really hard for their caregiving. Yeah.

And then so finally, before I turn it back over to Judy, next slide will show because we know this is a question everybody wants to answer and the best answer we have is a really rough and rangy guess.

But if we base it on current trends of enrollment, we would say that based on the six month renewals combined with community engagement requirements, about 16% to 32%, which is a big range. Right.

Of that expansion population, or 19,000 to 38,000 of our current MedQuest expansion adult members could lose coverage if we don't find the right exemption or we're not able to fully document their work appropriately. And then back over to you, Judy.

All right, thank you for hanging with us here this Friday afternoon. So some of this actually of course raises their broader questions. So what are we going to do as a community to be able to respond to what's happening?

How are we going to support the health and well being of our overall community knowing that people are going to be losing their health insurance without other options for health insurance coverage? They will not qualify for the marketplace, they won't qualify for Medicaid and some of them will actually lose coverage on Medicare, which we didn't talk about.

But that will also happen. So we know that people will start to drop off of the marketplace if there's no because of the, they won't be able to afford it or certain immigrants will fall off altogether because they don't qualify any longer. So there's different kinds of things as we've been thinking about.

It's like, well, what are the possibilities? Could we look at? Well, are there any. What would it cost to provide premium subsidies ourselves? What would it cost to provide state funded coverage where it's not like we do have the state funded only for the age blind and disabled population? What about for other coverage?

So those are the kinds of things that we've started to think about. I think other options that have been thought about is seeing what could be done to expand capacity at community health centers. Although community health centers actually also have been facing some restrictions on who they're able to provide coverage for.

Some of that would require obviously state funds. And so these are the kinds of things it can range from. It depends on what it is that where and what it is that the Legislature hopes or wishes to help provide coverage. Right. So.

And the timing of that need would be this coming session because these changes.

Some of it is this coming session because of the premium tax credits. Some of it is starting in 2027. We, we have an ask a budget ask. Although I should have looked it up before I came. As I said it out loud going zero no, I forgot to look up how much we asked for that.

But it's still being considered through the within the Governor's Budget. Of course it's not going through any of this process.

But we're estimating that we're going to need some, some additional dollars to help us get those systems that we were talking about before because this is brand new for us and to make adaptations to our current eligibility systems so that we can collect the information that we need to collect.

So even if we have one system for covering all of these different areas, we still have to make changes within our system in order to accommodate the changes that HR1 is making.

We've actually also seen a tremendous increase in costs in the last year, a couple of years where we've seen a spike in health, the inflation of healthcare costs and prices. So 10 to 20% for various different kinds of services, which was leading to but could lead to a budget shortfall for us as well.

We're still working on finalizing those numbers as well.

Do you think that with the added requirements to be eligible that people who are healthy will not bother and will get a smaller but safer population that will be more expensive on the marketplace?

Oh, for sure, for sure. That will definitely happen. And even with our unwinding, that's the other thing that we actually also have noticed is that the acuity of the individuals who are remaining, they're the individuals who can't work as many hours, et cetera, who have health conditions, etc.

So we have seen the acuity levels of our, of our population increase.

So do you have a budget request coming in to raise rates? We do for that, yes, we do.

But again, it's early in the process. It's still with the governors. Governors. So we don't know what that pro. You will get that information when the Governor presents this budget.

So one of the things that we wanted to call out, one of the other impacts is that when you get an increase in numbers of uninsured individuals, it has a particular impact on hospitals, hospital systems, because they are required under a law called emtala, which is the Emergency Medical Treatment and Labor act, to treat anybody who walks in the door for at least screening and stabilization.

So regardless of their ability to pay. So as you find, as individuals are uninsured and can't afford coverage, then what happens is that they don't go into for care because they can't afford it. They don't go in for vacation preventive care, again because it's expensive and they can't go in.

And so the only place that they can go is the emergency room. And that is the only place. And so that does lead to an increase in uncompensated care within the hospitals. Next slide.

So some of the broader questions for our provider community and that we will also as a community be asking ourselves is how can we support the healthcare providers, et cetera. The message that we want to have for our community and our members is please continue to go out and seek care.

Please continue to seek care when you need it, go in for your preventive care, go see the dentist, get your kids vaccinated, et cetera. So that. Because that those things, they have not changed right now. So please do that. And then lastly, I will wrap this up with a couple of good news things here.

It wasn't January 6th, it was January 8th. The wrong date on here. I put the wrong date, so. Dang it. So we, the Medicaid program operates using sort of like a contract that we have with the Federal Government and one part of that one that has different components to it.

Some of it's called a state plan, which is just a regular way of operating back and forth with the Federal Government. There's actually optional services and different kinds of waivers that we can have. And then there's like these big demonstration waivers that are known as 1115 demonstration waivers where you can ask for waivers to revisit.

Run your program very differently when it comes to population served and the types of services that you're providing. We've had an 1115 demonstration waiver since the 1990s. It has to be renewed every five years. We got this waiver renewed the January 8th. So it's the wrong date in here. It's January 8th, not January at January 8th.

And with the prior Administration and we got a number of new innovations that we were able to get permission to provide. So you know, obviously a lot has changed since then.

So the next two slides are showing you where, where things have been added and changed and then I have a little updates on the, on the, on the green thing. Yeah, thank you. Going back to green. Going back to green. There we go.

All right, so let's go there because I want to, because I want to end on a high note. So these are the things that are in place that we are. I mean these are the things that we got permission for. Most of them have to do with health related social needs or being able to cover additional puppy.

So what we were able to put in place as of January 1st of this year because we got permission even before the January 8th is we have continuous eligibility for Keiki for 0 to 6, meaning that if their circumstances change, etc, unless they move out of state or don't want the coverage any longer, we will continue their will continue to have their Medicaid coverage for the Keiki for that time period.

And then from 6 to 18 they have two years of coverage. So it's a year. You know, automatically it's a year and this extends it for two years. So 6 to 18.

Now unfortunately, CMS has told us that they won't approve it on a going forward basis and have already asked us like, what are you gonna do to make this stop? And we are going and we're saying yes, we're saying we're not gonna stop it during this five years.

We're going to keep going during these five years and hope for change. We're just gonna keep, we're gonna go for as long as we can go. So that's, that's the really good news. I'm gonna cover the medical respite and then come back to the nutrition supports here just momentarily.

So medical respite is for individuals who are houseless and have a complex medical need. It's a short term stay for either pre procedure or post procedure or they need to, or individual needs to recuperate from Sort of a stay in the hospital for something. So think precedure. If you're thinking about that, think colonoscopy.

For those of you who are 50 and older, think colonoscopy and the prep that you need for that and think about doing that as a houseless person. Right. It's like no, not good. So this is the kind of thing that we are able to provide coverage for. This was a brand new service for us.

There are currently in our state, there are some places that are doing medical respite but they're not able to get Medicaid payment for it. And so we just recently issued a multi page document, I think it's 60 pages or so on this medical respite benefit to be implemented as of January 1st.

So our team worked really hard to get that in place, to get the guidance together to be able to at least roll this, this benefit out as quickly as we could.

And then the SNAP benefit cutting off prompted us to see if there was anything we could do on our nutrition support special benefit, if we could implement or pilot something. And so we will be piloting with our community health centers and our health plans a fruit.

And again this is just a pilot for the fruit, the healthy fruit and vegetable and protein boxes. And so we just had, we went from not having any idea two weeks ago to having a fruit full blown all day meeting about how to implement this on Wednesday. And our, our hope is to get this implemented.

The pilot implemented between November 17th and January 17th I believe. Yeah, something like that. Mid January, over the holiday season just to help supplement and be able to roll this part of the benefit out. We're meeting a lot. We'll also be able to, to roll out a portion of the justice involved population.

But at this point it's not the adults, it's just the juveniles at this point there's a lot of work left to be done but the teams are working hard to get that rolled out as well.

Yeah, I have one last question. So for our. I understand COFA will be covered assuming they have work eligibility, etc. What if they came here a long time ago and they no longer have their entry visa number? Like if they've lost their documentation and like what flexibility do you have? So it's a very good.

And they've never been associated with MedQuest before.

So if, if they've been associated, you have the documentation?

Yes, we have it and we can use it.

So it would only be new people who in theory would have that because they just came. Yes. Okay.

Yeah.

Okay.

Yeah, we try. Our standard is we don't request any documents. If you know your numbers at the point of application, you give us your information, we'll take that and run with it. And as long as we it doesn't come back rejected, then we have no need to ever have you bring your documents to us. But if often.

Sometimes these numbers can be complex. It's easier for people to come with their documents because they'll have the numbers perfectly. But again, if we can you put it in an application, we're checking it. It comes back, yep, that was confirmed. Then we don't have to ask you for the copy.

And that can be helpful for some people who may have lost it, but they wrote it down somewhere on an index card so they know their information, they just don't have the original. That's okay for us.

Members, any other questions?

Yeah, thank you. Can we go back to the copay component for providers? Sure. I mean, as you know, we already have a critical healthcare provider shortage on our neighbor islands. I think it's 43% or so for Maui County.

So I worry that, you know, this is a mandate that they have to collect a copay now. So I imagine that will reduce the reimbursement amount that these physicians receive, yet it will dramatically increase the paperwork component.

So how is that aspect going to be implemented with ensuring that providers have the right resources they need to not only collect the copay, but then file whatever reporting they're going to need?

I mean, I think doctors are spending 20 plus hours a week just on, on, you know, doing their basic paperwork stuff and that it really cuts into patient time. So is there a method.

Here's our, here's our ideas that we have right now.

Thank you.

One, it's, you know, it's pushed out there and you're absolutely correct that whenever you have co pay requirements, it winds up being a burden on the provider as opposed to necessarily on the, I mean, it is a, it is a challenge.

It's a barrier to care for the individuals as well, that, you know, the individuals coming in and seeking care. But it tends to be more of a barrier for the, for the providers and the rules.

The law as it was passed has some really unusual features to it for the co pays because it actually also mandates that the co pays cannot be more than. Is it 5%, 5% of the household income on a quarterly basis. On a quarterly basis.

So providers, they don't have any information on people's income nor are they going to be collecting the information on the people's income. That's not a reasonable thing to do. So there's actually a lot of services that are exempted from having the collection of co pays.

I came from a state prior to Hawaii that did charge co pays and I can assure you that you are absolutely correct that it is challenging and difficult to do. The limits are you have to charge a penny and no more than $35.

And so we also know from a policy perspective, because people go like, well, we should be charging co pays, especially in the hospitals or the emergency rooms, to keep people from coming in, you know, unnecessarily, because they, they're always coming in and they don't need to, et cetera.

So what the studies show on that for, for copays are that yes, indeed, it did reduce the number of unnecessary care, but actually also necessary care also went down. So in both primary care, like in all these different settings.

So here's our idea, which would be limit the places that you would charge a copay and then charge the minimum of a penny and have a penny job.

So that is, that is one idea that we've been thinking about because the other requirement for copays are they for the fees, is you have to make for the Medicaid provider. For the payment to that Medicaid provider, the payer has to assume that you've collected the copay.

So that's why it winds up being a provider rate reduction, because I assume. And then you as a provider have to see that person, whether they can pay it or not at that time. You can refuse to see that person in the future, but not. And we don't want to, we don't want to limit access. Right.

We already have a challenge of access, so we don't want to make that more difficult. So our ideas are what are the things that we can do to comply with this, with the letter, if not necessarily the spirit.

And we're grateful that this, that particular provision is three years out. So it gives us more time and space to collect your pennies.

Unless they stop making, making them. But yeah, yeah, but it's, it's a very good thing to think about for the future.

And how can I help support what you guys are doing? What do you guys need more FTEs? How can I help support you guys?

We will be, we do have a, we will be having a budget ask. We're working on refining the numbers right now of how many, how many additional FTE will need, of what kind of FT we'll need because it's not just eligibility. Workers It's a lot of policy work, a lot of communications work, etc.

We have increased in systems costs as well. So we will have a budget ask. We will have more details. Unfortunately, we don't have those more details right now, but they will be included. Again, we if the Governor includes it in the governor's recommended budget.

Thank you, Vice Chair. Okay. I really appreciate your time. I appreciate everyone's patience. Obviously, I have a lot of questions. This is so interesting to me, and I don't know a lot of the details, so I really appreciate. And we are adjourned.

Thank you.