Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committees on Health and Human Services, to which was referred S.B. No. 2455 entitled:

beg leave to report as follows:

The purpose of this measure is to provide a tax credit to resident taxpayers for long-term care insurance premiums.

This measure also prohibits a medical expense deduction if the long-term care tax credit is claimed.

Testimony in support of this measure was received from The Chamber of Commerce of Hawaii, Healthcare Association of Hawaii, Hawaii Long Term Care Association, The American Council of Life Insurers, and Association of Insurance and Financial Advisors. Testimony in opposition was received from the Department of Taxation. Comments were received from the Executive Office of Aging.

Your Committees find that the growing need for long-term care in Hawaii will assume epidemic proportions if nothing is done to mitigate it. Costs associated with long-term care are significant, and people are living longer due to implementation of forward thinking public health and environmental protection policies, a better educated populace, and medical advances. Your Committees further find that most people are not prepared to pay for long-term care expenses from their personal assets. This measure provides an incentive to encourage Hawaii citizens to plan and prepare for their future long-term care by purchasing long-term care insurance, especially at a younger age when premiums are more affordable.

Your Committees have amended this measure by:

(2) Reducing the tax credit amount to $1,000;

(3) Repealing the measure after five years; and

As affirmed by the records of votes of the members of your Committees on Health and Human Services that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2455, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2455, S.D. 1, and be referred to the Committee on Ways and Means.