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Committee debates expanding long‑term‑care tax credit; preliminary motion fails and bill later postponed
Summary
The committee debated but did not advance HB 1045, which would raise eligibility and the dollar amount for a long‑term care insurance tax credit intended to encourage private coverage and reduce future Medicaid pressure.
House Bill 1045, a proposal to increase the income thresholds and raise the dollar cap for the state long‑term care insurance tax credit, drew discussion about program structure, consumer behavior and state Medicaid costs before the committee declined to advance the bill and then postponed it.
Sponsors said the bill expands eligibility (raising the federal taxable income thresholds for the credit) and increases the per‑policy credit (the bill sets the credit up to $300 per policy and includes an inflation adjustment). Representative Joseph, sponsor, told members the policy aims to encourage Coloradans to buy long‑term care insurance so fewer people rely on Medicaid for long‑term care costs.
Witnesses and evidence: Eileen Doherty of the Colorado Gerontological Society described long‑term care insurance as a customizable product that can pay for home care, assisted living or nursing homes and noted the premium‑vs‑benefit tradeoffs; AARP’s volunteer representative Dennis Valentine cited Genworth data on Colorado nursing‑home costs and a federal statistic that many people need paid care over their lifetimes. Witnesses urged incentives to encourage private coverage and retention of existing policies.
Fiscal and policy tradeoffs: Sponsors and witnesses argued private coverage can reduce future Medicaid exposure; fiscal analysts said the department’s fiscal note records immediate state revenue impacts (the initial year shows a reduction in income tax revenue of roughly $1.2 million for the partial year model), and that the Legislative Council does not model long‑term Medicaid savings in a fiscal note. Analysts noted that actual net savings depend on uptake, insurer pricing, and whether insureds maintain policies until benefits are needed.
Committee action: A motion to move HB 1045 to appropriations with a favorable recommendation failed on a recorded roll call. Committee members then moved to postpone the bill indefinitely; the motion to postpone passed and the measure was removed from active consideration for the session.
What it means: While sponsors argued the credit would encourage private planning and reduce Medicaid pressure, committee members cited the bill’s near‑term fiscal cost and questioned whether the $300 credit would meaningfully change market behavior. Fiscal staff said long‑range Medicaid savings were plausible but not modeled in the fiscal note.
Next steps: Sponsors said they will continue discussion off the Finance Committee calendar and may pursue other avenues to increase long‑term care planning incentives without producing near‑term revenue loss large enough to block committee approval.
