Posted on: Wednesday, February 12, 2003

Lingle's long-term care plan advances in Senate

By Lynda Arakawa
Advertiser Capitol Bureau

The Senate health and human services committees yesterday advanced Gov. Linda Lingle's proposal to offer tax credits to people who buy long-term care insurance.

Senate Bill 1399 would provide a refundable net income tax credit equal to up to 30 percent of long-term care insurance premiums. It would be phased in, beginning at 10 percent in 2004, 20 percent in 2005 and 30 percent in 2006.

The proposal received mixed reviews at the hearing before the two committees yesterday.

Advocates of the bill, including insurance companies and some healthcare providers, said it would offer people — particularly younger residents — an incentive to purchase private long-term care insurance and relieve the burden on Medicaid, the government's healthcare program for low-income residents.

But opponents, such as Laura Manis of the Kokua Council, said such tax credits wouldn't help many Hawai'i residents because long-term care insurance is not affordable and available to everyone who wants it. She also said most people with long-term care insurance are pensioners who pay no state taxes and therefore can't get the credit unless they file a tax return.

The Hawai'i Long Term Care Association said government cannot be relied upon to handle long-term care and, therefore, a larger proportion of the burden should be on private insurance. Such a tax credit would be a substantial incentive to motivate more people to purchase insurance, according to the association.

Lingle's proposal now moves to the Senate Ways and Means Committee.