Income Tax - Credit for Long-Term Care Premiums (Long-Term Care Relief Act of 2025)
The passage of HB327 is expected to have multi-faceted implications for state laws, particularly concerning the financial landscape of senior care in Maryland. By providing a full credit against state income taxes for long-term care premiums, the bill could incentivize more residents to secure this type of insurance. This may ultimately result in increased coverage among the elderly population, thereby decreasing reliance on public assistance programs for long-term care. Additionally, the bill may stimulate discussions regarding the adequacy of income limits, as some may view them as too restrictive, potentially leaving out lower-income seniors who still require long-term care insurance.
House Bill 327, known as the Long-Term Care Relief Act of 2025, proposes amendments to the existing income tax structure in Maryland by offering a credit for eligible long-term care premiums. This bill aims to mitigate some financial burdens for elderly taxpayers—specifically those aged 85 and older- who are purchasing long-term care insurance. The credit is structured to cover 100% of premiums paid, subject to income limits, which are set at $100,000 for individuals and $200,000 for couples filing jointly. The intent behind this legislation is to encourage individuals to obtain long-term care insurance, which in turn may alleviate future burdens on the state's medical assistance programs.
Despite its intentions, HB327 has points of contention that could arise during legislative discussions. Opponents of the bill may argue that the age threshold set at 85 years could exclude a significant portion of older Marylanders who still require assistance but do not meet this criterion. Furthermore, questions surrounding the sustainability of such tax credits could emerge, especially in the context of state budget constraints and other competing priorities. Lastly, the requirement that coverage must have been acquired after a specific date may generate debate among current policyholders, particularly those who purchased plans before this cut-off.
The bill was introduced and read into the committee on January 10, 2025, indicating it is in the early stages of the legislative process, which often allows time for further amendments and discussions among state lawmakers.