Income Tax - Credit for Long-Term Care Premiums (Long-Term Care Relief Act of 2025)
The expected impact of SB155 on state law involves an amendment to current tax policies related to long-term care insurance, specifically increasing the maximum allowable credit and expanding eligibility criteria. By adjusting the income thresholds, the bill aims to target financial assistance to lower-income seniors, thereby alleviating some of the out-of-pocket expenses associated with long-term care. This change is anticipated to lead to an increase in long-term care insurance enrollment, which could ultimately benefit the state's healthcare system by reducing reliance on Medicaid for long-term care services.
Senate Bill 155, known as the Long-Term Care Relief Act of 2025, introduces significant changes to the existing income tax credit provisions for long-term care insurance premiums paid by Maryland residents. The bill aims to enhance accessibility and financial support for seniors by offering a credit equal to 100% of eligible premiums for those who are at least 85 years old and have a Maryland adjusted gross income below certain thresholds. The maximum credit amount is designed to be either 15% of the eligible premiums paid or $1,500, depending on which is lower. This reform is intended to ease the financial burden on elderly residents and promote greater uptake of long-term care insurance, which is increasingly essential as the population ages.
However, the bill has garnered attention and may face scrutiny in legislative discussions regarding its fiscal implications. Opponents might raise concerns about the potential loss of state revenue due to the increased credits offered, questioning whether the financial relief for a specific demographic could weigh heavily on the state budget. Furthermore, there may be debates on whether the income thresholds effectively capture the most vulnerable populations, ensuring the right individuals receive the intended benefits. Proponents, on the other hand, argue that the long-term benefits of reducing state-funded healthcare through increased private insurance coverage outweigh the initial costs of implementing the new tax credits.