Senate File 2163
SENATE FILE
BY SCHUERER
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to asset disregard under the medical assistance
2 program for the purchase of a qualified long=term care
3 insurance policy, providing for a repeal, and providing a
4 contingent effective date.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
6 TLSB 6099SS 80
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PAG LIN
1 1 Section 1. NEW SECTION. 249J.1 DEFINITIONS.
1 2 As used in this chapter, unless the context otherwise
1 3 requires:
1 4 1. "Health maintenance organization" means health
1 5 maintenance organization as defined in section 514B.1.
1 6 2. "Long=term care facility" includes, but is not limited
1 7 to, a facility licensed under chapter 135C or an assisted
1 8 living program certified under chapter 231C.
1 9 3. "Qualified long=term care insurance policy" means a
1 10 qualified long=term care insurance contract as defined in
1 11 section 7702B(b) of the Internal Revenue Code that is issued
1 12 by an insurer or other person who complies with section
1 13 249J.5.
1 14 4. "Qualified long=term care services" means qualified
1 15 long=term care services as defined in section 7702B(c) of the
1 16 Internal Revenue Code.
1 17 Sec. 2. NEW SECTION. 249J.2 ESTABLISHMENT AND
1 18 ADMINISTRATION OF THE PROGRAM.
1 19 1. The Iowa long=term care asset disregard incentive
1 20 program is established to do the following:
1 21 a. Provide incentives for individuals to insure against
1 22 the costs of providing for their long=term care needs.
1 23 b. Provide a mechanism for individuals to qualify for
1 24 coverage of the costs of their long=term care needs under the
1 25 medical assistance program without first being required to
1 26 substantially exhaust all their resources.
1 27 c. Assist in developing methods for increasing access to
1 28 and the affordability of long=term care insurance.
1 29 d. Provide counseling to individuals in understanding
1 30 their long=term care insurance options.
1 31 e. Alleviate the financial burden on the state's medical
1 32 assistance program by encouraging the pursuit of private
1 33 initiatives.
1 34 2. The insurance division of the department of commerce
1 35 shall administer the program in cooperation with the division
2 1 responsible for medical services within the department of
2 2 human services.
2 3 Sec. 3. NEW SECTION. 249J.3 INFORMATION ABOUT THE
2 4 PROGRAM == AVAILABILITY OF ASSISTANCE.
2 5 1. The insurance division shall develop and coordinate a
2 6 plan to provide counseling as described in section 249J.2.
2 7 2. The insurance division shall make available to any
2 8 individual interested in participating in the Iowa long=term
2 9 care asset disregard incentive program information concerning
2 10 all of the following:
2 11 a. The Iowa long=term care asset disregard incentive
2 12 program.
2 13 b. Qualified long=term care insurance policies.
2 14 c. Medicare supplement insurance policies.
2 15 d. Parts A and B coverage under the Medicare program
2 16 pursuant to 42 U.S.C. } 1395 et seq.
2 17 e. Health maintenance organizations that contract with the
2 18 Medicare program.
2 19 f. The medical assistance program.
2 20 3. If an individual elects to pursue any of the options
2 21 about which information is provided under subsection 2, the
2 22 insurance division shall assist the individual.
2 23 Sec. 4. NEW SECTION. 249J.4 ELIGIBILITY.
2 24 An individual who meets either of the following criteria is
2 25 eligible for assistance under the medical assistance program
2 26 using the asset disregard provisions pursuant to section
2 27 249J.6:
2 28 1. Is the beneficiary of a qualified long=term care
2 29 insurance policy approved by the insurance division.
2 30 2. Is enrolled in a health maintenance organization that
2 31 both provides qualified long=term care services and provides a
2 32 qualified long=term care insurance policy.
2 33 Sec. 5. NEW SECTION. 249J.5 INSURER REQUIREMENTS.
2 34 1. An insurer or other person who wishes to issue a
2 35 qualified long=term care insurance policy meeting the
3 1 requirements of this chapter shall, at a minimum, offer to
3 2 each policyholder or prospective policyholder a policy that
3 3 provides both of the following:
3 4 a. Facility coverage, including but not limited to long=
3 5 term care facility coverage.
3 6 b. Nonfacility coverage, including but not limited to home
3 7 and community care coverage.
3 8 2. An insurer or other person who complies with subsection
3 9 1 may also elect to offer a qualified long=term care insurance
3 10 policy that provides only facility coverage.
3 11 Sec. 6. NEW SECTION. 249J.6 ASSET DISREGARD ADJUSTMENT.
3 12 1. As used in this section, "asset disregard" means any of
3 13 the following:
3 14 a. A one dollar increase in the amount of assets an
3 15 individual who purchases a qualified long=term care insurance
3 16 policy and meets the requirements of section 249J.4 may retain
3 17 under section 249A.34 for each one dollar of benefit paid out
3 18 under the individual's qualified long=term care insurance
3 19 policy for qualified long=term care services if the policy
3 20 provides benefits at the time of initial purchase of at least
3 21 one hundred thousand dollars if purchased on or before January
3 22 1, 2004, and includes a provision under which the total
3 23 benefit increases by at least five percent per year,
3 24 compounded annually beginning January 1, 2005, for individuals
3 25 up to seventy=two years of age.
3 26 b. The total assets an individual owns and may retain
3 27 under section 249A.34 and still qualify for benefits under
3 28 chapter 249A at the time the individual applies for benefits
3 29 if the individual meets all of the following criteria:
3 30 (1) Is the beneficiary of a qualified long=term care
3 31 insurance policy that provides benefits at the time of initial
3 32 purchase of at least one hundred forty thousand dollars if
3 33 purchased on or before January 1, 1998, and includes a
3 34 provision under which the total benefit increases by at least
3 35 five percent per year, compounded annually, beginning January
4 1 1, 1999, for individuals up to seventy=two years of age.
4 2 (2) Meets the requirements of section 249J.4.
4 3 (3) Has exhausted the benefits of the qualified long=term
4 4 care insurance policy.
4 5 2. When the division responsible for medical services
4 6 within the department of human services determines whether an
4 7 individual is eligible for medical services under chapter
4 8 249A, the division shall make an asset disregard adjustment
4 9 for any individual who meets the requirements of section
4 10 249J.4. The asset disregard shall be available after benefits
4 11 of the qualified long=term care insurance policy have been
4 12 applied to the cost of qualified long=term care services as
4 13 required under this chapter.
4 14 Sec. 7. NEW SECTION. 249J.7 APPLICATION OF ASSET
4 15 DISREGARD TO DETERMINATION OF INDIVIDUAL'S ASSETS.
4 16 A public program administered by the state that provides
4 17 long=term care services and bases eligibility upon the amount
4 18 of the individual's assets shall apply the asset disregard
4 19 under section 249J.6 in determining the amount of the
4 20 individual's assets.
4 21 Sec. 8. NEW SECTION. 249J.8 DISCONTINUATION OF PROGRAM.
4 22 1. If the Iowa long=term care asset disregard incentive
4 23 program is discontinued, an individual who is covered by a
4 24 qualified long=term care insurance policy prior to the date
4 25 the program is discontinued is eligible to continue to receive
4 26 an asset disregard as defined under section 249J.6.
4 27 2. An individual who is covered by a long=term care
4 28 insurance policy under the long=term care asset preservation
4 29 program established pursuant to chapter 249G, Code 2003, on or
4 30 before June 30, 2004, is eligible to continue to receive the
4 31 asset adjustment as defined under that chapter.
4 32 3. The insurance division shall adopt rules to provide an
4 33 asset disregard to individuals who are covered by a long=term
4 34 care insurance policy prior to July 1, 2004, consistent with
4 35 the Iowa long=term care program asset disregard.
5 1 Sec. 9. NEW SECTION. 249J.9 RECIPROCAL AGREEMENTS TO
5 2 EXTEND ASSET DISREGARD.
5 3 The division responsible for medical services within the
5 4 department of human services may enter into reciprocal
5 5 agreements with other states to extend the asset disregard
5 6 under section 249J.6 to Iowa residents who had purchased or
5 7 were covered by qualified long=term care insurance policies in
5 8 other states.
5 9 Sec. 10. NEW SECTION. 249J.10 RULES.
5 10 The department of human services and the insurance division
5 11 may adopt rules pursuant to chapter 17A as necessary to
5 12 administer this chapter. The insurance division shall consult
5 13 with representatives of the insurance industry in adopting
5 14 such rules. This delegation of rulemaking authority shall be
5 15 construed narrowly.
5 16 Sec. 11. NEW SECTION. 249A.34 PURCHASE OF QUALIFIED
5 17 LONG=TERM CARE INSURANCE POLICY == COMPUTATION UNDER MEDICAL
5 18 ASSISTANCE PROGRAM.
5 19 A computation for the purposes of determining eligibility
5 20 under this chapter concerning an individual who has purchased
5 21 a qualified long=term care insurance policy under chapter 249J
5 22 shall include consideration of the asset disregard provided in
5 23 section 249J.6.
5 24 Sec. 12. Chapter 249G, Code 2003, is repealed.
5 25 Sec. 13. MEDICAID STATE PLAN.
5 26 1. The department shall amend the medical assistance state
5 27 plan to provide that all amounts paid for qualified long=term
5 28 care services under a qualified long=term care insurance
5 29 policy shall be considered in determining the amount of the
5 30 asset disregard.
5 31 2. The department shall amend the medical assistance state
5 32 plan to extend nursing home coverage using the special
5 33 institutional income rule to the medically needy directly
5 34 without the requirement of establishing a qualifying income
5 35 trust.
6 1 Sec. 14. CONTINGENT EFFECTIVE DATE == IOWA LONG=TERM CARE
6 2 ASSET DISREGARD INCENTIVE PROGRAM. The Iowa long=term care
6 3 asset disregard incentive program established in this Act
6 4 shall take effect only if funding is specifically appropriated
6 5 to the insurance division for that purpose. The insurance
6 6 division shall notify the Code editor if such an appropriation
6 7 is made.
6 8 EXPLANATION
6 9 This bill establishes an Iowa long=term care asset
6 10 disregard incentive program to provide incentives for
6 11 individuals to insure against the costs of their long=term
6 12 care needs, provide a mechanism for individuals to qualify for
6 13 coverage of the costs of their long=term care needs under the
6 14 medical assistance program without first being required to
6 15 substantially exhaust all their resources, to increase access
6 16 to and the affordability of long=term care insurance, to
6 17 provide counseling to individuals in understanding their long=
6 18 term care insurance options, and to alleviate the financial
6 19 burden on the state's medical assistance program by
6 20 encouraging the pursuit of private initiatives. The bill
6 21 directs the division responsible for medical services within
6 22 the department of human services and the insurance division of
6 23 the department of commerce to administer the program.
6 24 The bill directs the insurance division to provide certain
6 25 information to individuals interested in participating in the
6 26 Iowa long=term care asset disregard incentive program, and
6 27 provides that an individual is eligible to participate in the
6 28 program if the individual is either the beneficiary of a
6 29 qualified long=term care insurance policy approved by the
6 30 insurance division or is enrolled in a health maintenance
6 31 organization that both provides qualified long=term care
6 32 services and provides a qualified long=term care insurance
6 33 policy.
6 34 The bill encourages insurers who issue qualified long=term
6 35 care policies to offer, at a minimum, a policy that provides
7 1 both facility coverage and nonfacility coverage, including but
7 2 not limited to home and community care coverage.
7 3 Under the bill, an individual who purchases or is covered
7 4 by a qualified long=term care insurance policy would be
7 5 allowed an asset disregard under the medical assistance
7 6 program. The asset disregard is either a $1 increase in the
7 7 amount of assets the individual may retain under the medical
7 8 assistance program for each $1 of benefit paid out under the
7 9 individual's qualified long=term care insurance policy for
7 10 qualified long=term care services if the benefit is at least
7 11 $100,000 if purchased on or before January 1, 2004, and the
7 12 total benefit increases by at least 5 percent compounded
7 13 annually beginning January 1, 2005, for individuals up to
7 14 seventy=two years of age, or a disregard of the total assets
7 15 the individual owns and may retain and still be eligible under
7 16 the medical assistance program if the individual is the
7 17 beneficiary of a qualified long=term care insurance policy
7 18 with a benefit of at least $140,000 if purchased on or before
7 19 January 1, 1998, with a total benefit that increases by at
7 20 least 5 percent compounded annually beginning January 1, 1999,
7 21 for individuals up to 72 years of age, is otherwise eligible
7 22 and has exhausted the benefits of the policy.
7 23 The bill provides that if the Iowa long=term care asset
7 24 disregard incentive program is discontinued, an individual who
7 25 purchased or is covered under a qualified long=term care
7 26 insurance policy prior to the date the program is discontinued
7 27 is eligible to continue to receive an asset disregard under
7 28 the bill. The bill allows an individual participating in the
7 29 asset preservation program existing on June 30, 2004, to
7 30 continue to receive that asset adjustment and directs the
7 31 department to adopt rules to allow an individual who purchased
7 32 long=term care insurance prior to July 1, 2004, to receive an
7 33 asset disregard incentive prior to July 1, 2004. The bill
7 34 allows for reciprocal agreements to extend the asset disregard
7 35 program and the division of insurance to Iowa residents who
8 1 have purchased or are covered under qualified long=term care
8 2 insurance policies in other states.
8 3 The bill authorizes the department of human services and
8 4 the insurance division to adopt rules to administer this new
8 5 Code chapter but this authority is to be construed narrowly.
8 6 The insurance division is directed to consult with
8 7 representatives of the insurance industry in adopting such
8 8 rules.
8 9 The bill directs the department of human services to amend
8 10 the medical assistance state plan to allow for disregard of
8 11 all amounts paid out under a qualified long=term care
8 12 insurance policy and to allow for extension of nursing home
8 13 coverage using the special institutional income rule to the
8 14 medically needy directly without requiring the establishment
8 15 of a qualifying income trust.
8 16 The bill repeals Code chapter 249G, the current long=term
8 17 care asset preservation program.
8 18 The bill provides that the long=term care asset disregard
8 19 incentive program takes effect only if funds are specifically
8 20 appropriated to the insurance division for that purpose.
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