House File 736 - Introduced



                                       HOUSE FILE       
                                       BY  COMMITTEE ON COMMERCE,
                                           REGULATION AND LABOR

                                       (SUCCESSOR TO HF 353)



    Passed House,  Date               Passed Senate, 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 certified long=term care
  3    insurance policy, providing for a repeal, providing a
  4    contingent effective date, and providing an appropriation.
  5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  6 TLSB 1389HV 81
  7 pf/pj/5

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.  "Certified long=term care insurance policy" means a
  1  5 long=term care insurance contract that is issued by an insurer
  1  6 or other person who complies with section 249J.4.
  1  7    2.  "Long=term care facility" means a facility licensed
  1  8 under chapter 135C or an assisted living program certified
  1  9 under chapter 231C.
  1 10    3.  "Long=term care insurance" means long=term care
  1 11 insurance as defined in section 514G.4 and regulated in
  1 12 section 514G.7.
  1 13    4.  "Qualified long=term care services" means qualified
  1 14 long=term care services as defined in section 7702B(c) of the
  1 15 Internal Revenue Code.
  1 16    Sec. 2.  NEW SECTION.  249J.2  IOWA LONG=TERM CARE ASSET
  1 17 DISREGARD INCENTIVE PROGRAM == ESTABLISHMENT AND
  1 18 ADMINISTRATION.
  1 19    1.  The Iowa long=term care asset disregard incentive
  1 20 program is established to do all of 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.  Alleviate the financial burden on the state's medical
  1 30 assistance program by encouraging the pursuit of private
  1 31 initiatives.
  1 32    2.  The insurance division of the department of commerce
  1 33 shall administer the program in cooperation with the division
  1 34 responsible for medical services within the department of
  1 35 human services.  Each agency shall take appropriate action to
  2  1 maintain the waiver granted by the centers for Medicare and
  2  2 Medicaid services of the United States department of health
  2  3 and human services under 42 U.S.C. } 1396 relating to
  2  4 providing medical assistance under chapter 249A, in effect
  2  5 prior to the effective date of this Act.
  2  6    Sec. 3.  NEW SECTION.  249J.3  ELIGIBILITY.
  2  7    An individual who is the beneficiary of a certified long=
  2  8 term care insurance policy approved by the insurance division
  2  9 is eligible for assistance under the medical assistance
  2 10 program using the asset disregard provisions pursuant to
  2 11 section 249J.5.
  2 12    Sec. 4.  NEW SECTION.  249J.4  INSURER REQUIREMENTS.
  2 13    1.  An insurer or other person who wishes to issue a
  2 14 certified long=term care insurance policy meeting the
  2 15 requirements of this chapter shall, at a minimum, offer to
  2 16 each policyholder or prospective policyholder a policy that
  2 17 provides both of the following:
  2 18    a.  Facility coverage, including but not limited to long=
  2 19 term care facility coverage.
  2 20    b.  Nonfacility coverage, including but not limited to home
  2 21 and community=based care coverage.
  2 22    2.  An insurer or other person who complies with subsection
  2 23 1 may also elect to offer a certified long=term care insurance
  2 24 policy that provides only facility coverage.
  2 25    Sec. 5.  NEW SECTION.  249J.5  ASSET DISREGARD ADJUSTMENT.
  2 26    1.  As used in this section, "asset disregard" means a one
  2 27 dollar increase in the amount of assets an individual who
  2 28 purchases a certified long=term care insurance policy and
  2 29 meets the requirements of section 249J.3 may retain under
  2 30 section 249A.35 for each one dollar of benefit paid out under
  2 31 the individual's certified long=term care insurance policy for
  2 32 qualified long=term care services if the policy meets all of
  2 33 the following criteria:
  2 34    a.  If purchased prior to January 1, 2005, provides
  2 35 benefits in an amount equal to at least one hundred thirty
  3  1 thousand dollars as computed on January 1, 2005.
  3  2    b.  If purchased on or after January 1, 2005, provides
  3  3 benefits in an amount equal to at least one hundred thirty
  3  4 thousand dollars as computed on January 1, 2005, compounded
  3  5 annually by at least five percent, or an amount equal to at
  3  6 least the minimum face amount specified by the commissioner of
  3  7 insurance pursuant to subsection 3, whichever amount is
  3  8 greater.
  3  9    c.  Includes a provision under which the total amount of
  3 10 the benefit increases by at least five percent, compounded
  3 11 annually.
  3 12    2.  When the division responsible for medical services
  3 13 within the department of human services determines whether an
  3 14 individual is eligible for medical assistance under chapter
  3 15 249A, the division shall make an asset disregard adjustment
  3 16 for any individual who meets the requirements of section
  3 17 249J.3.  The asset disregard shall be available after benefits
  3 18 of the certified long=term care insurance policy have been
  3 19 applied to the cost of qualified long=term care services as
  3 20 required under this chapter.
  3 21    3.  Beginning September 1, 2006, or one year after the
  3 22 effective date of this Act, whichever is later, the
  3 23 commissioner of insurance shall issue a bulletin annually on
  3 24 that date, declaring the minimum face amount for policies to
  3 25 qualify for the Iowa long=term care asset disregard incentive
  3 26 program for the following calendar year.  In making this
  3 27 determination, the commissioner shall consult with the
  3 28 division responsible for collecting data on average nursing
  3 29 home costs in Iowa.  Additionally, in making this
  3 30 determination, the commissioner shall consider the current
  3 31 average daily cost for three years of nursing home care and
  3 32 other relevant information.
  3 33    Sec. 6.  NEW SECTION.  249J.6  APPLICATION OF ASSET
  3 34 DISREGARD TO DETERMINATION OF INDIVIDUAL'S ASSETS.
  3 35    A public program administered by the state that provides
  4  1 long=term care services and bases eligibility upon the amount
  4  2 of the individual's assets shall apply the asset disregard
  4  3 under section 249J.5 in determining the amount of the
  4  4 individual's assets.
  4  5    Sec. 7.  NEW SECTION.  249J.7  PRIOR PROGRAM ==
  4  6 DISCONTINUATION OF PROGRAM.
  4  7    1.  If the Iowa long=term care asset disregard incentive
  4  8 program is discontinued, an individual who is covered by a
  4  9 certified long=term care insurance policy prior to the date
  4 10 the program is discontinued is eligible to continue to receive
  4 11 an asset disregard as defined under section 249J.5.
  4 12    2.  An individual who is covered by a long=term care
  4 13 insurance policy under the long=term care asset preservation
  4 14 program established pursuant to chapter 249G, Code 2005, on or
  4 15 before the effective date of this Act, is eligible to continue
  4 16 to receive the asset adjustment as defined under that chapter.
  4 17    3.  The insurance division shall adopt rules to provide an
  4 18 asset disregard to individuals who are covered by a long=term
  4 19 care insurance policy prior to the effective date of this Act,
  4 20 consistent with the Iowa long=term care asset disregard
  4 21 incentive program.
  4 22    Sec. 8.  NEW SECTION.  249J.8  RECIPROCAL AGREEMENTS TO
  4 23 EXTEND ASSET DISREGARD.
  4 24    The division responsible for medical services within the
  4 25 department of human services may enter into reciprocal
  4 26 agreements with other states to extend the asset disregard
  4 27 under section 249J.5 to Iowa residents who had purchased or
  4 28 were covered by certified long=term care insurance policies in
  4 29 other states.
  4 30    Sec. 9.  NEW SECTION.  249J.9  RULES.
  4 31    The department of human services and the insurance division
  4 32 of the department of commerce shall adopt rules pursuant to
  4 33 chapter 17A as necessary to administer this chapter.  The
  4 34 insurance division shall consult with representatives of the
  4 35 insurance industry in adopting such rules.  This delegation of
  5  1 rulemaking authority shall be construed narrowly.
  5  2    Sec. 10.  NEW SECTION.  249A.35  PURCHASE OF CERTIFIED
  5  3 LONG=TERM CARE INSURANCE POLICY == COMPUTATION UNDER MEDICAL
  5  4 ASSISTANCE PROGRAM.
  5  5    A computation for the purposes of determining eligibility
  5  6 under this chapter concerning an individual who has purchased
  5  7 a certified long=term care insurance policy under chapter 249J
  5  8 shall include consideration of the asset disregard provided in
  5  9 section 249J.5.
  5 10    Sec. 11.  Chapter 249G, Code 2005, is repealed.
  5 11    Sec. 12.  MEDICAID STATE PLAN WAIVERS.
  5 12    1.  The department shall amend the medical assistance state
  5 13 plan to provide that all amounts paid for qualified long=term
  5 14 care services under a certified long=term care insurance
  5 15 policy shall be considered in determining the amount of the
  5 16 asset disregard.
  5 17    2.  The department of human services shall seek approval of
  5 18 a state plan amendment or make application to the United
  5 19 States department of health and human services for any waivers
  5 20 necessary to implement chapter 249J, as enacted in this Act.
  5 21    Sec. 13.  CONTINGENT EFFECTIVE DATE == IOWA LONG=TERM CARE
  5 22 ASSET DISREGARD INCENTIVE PROGRAM.
  5 23    1.  This Act shall not take effect until both of the
  5 24 following conditions are met:
  5 25    a.  Funding is specifically appropriated to the insurance
  5 26 division of the department of commerce for the purpose of the
  5 27 Iowa long=term care asset disregard incentive program.  The
  5 28 insurance division shall notify the Code editor if such
  5 29 appropriation is made.
  5 30    b.  All necessary Medicaid state plan amendments and
  5 31 waivers are approved by the United States department of health
  5 32 and human services.  The department of human services shall
  5 33 notify the Code editor if such approval is received.
  5 34    2.  If the requirements of subsection 1 are met, the
  5 35 program shall begin no sooner than six months following the
  6  1 date that both requirements are met.
  6  2    Sec. 14.  APPROPRIATION.  There is appropriated from the
  6  3 general fund of the state to the division of insurance of the
  6  4 department of commerce for the fiscal year beginning July 1,
  6  5 2005, and ending June 30, 2006, the following amount, or so
  6  6 much thereof as is necessary, to establish an educational
  6  7 program to inform Iowans regarding the Iowa long=term care
  6  8 asset disregard incentive program and for up to the following
  6  9 full=time equivalent positions:
  6 10 .................................................. $    300,000
  6 11 ............................................... FTEs       2.00
  6 12                           EXPLANATION
  6 13    This bill establishes an Iowa long=term care asset
  6 14 disregard incentive program to provide incentives for
  6 15 individuals to insure against the costs of their long=term
  6 16 care needs, provide a mechanism for individuals to qualify for
  6 17 coverage of the costs of their long=term care needs under the
  6 18 medical assistance program without first being required to
  6 19 substantially exhaust all their resources, increase access to
  6 20 and the affordability of long=term care insurance, and
  6 21 alleviate the financial burden on the state's medical
  6 22 assistance program by encouraging the pursuit of private
  6 23 initiatives.  The bill directs the insurance division of the
  6 24 department of commerce to administer the program in
  6 25 cooperation with the division responsible for medical services
  6 26 within the department of human services.  The bill directs the
  6 27 department of human services and the division of insurance to
  6 28 each take appropriate action to maintain the waiver granted by
  6 29 the centers for Medicare and Medicaid services of the United
  6 30 States department of health and human services under 42 U.S.C.
  6 31 } 1396 relating to providing assistance under Code chapter
  6 32 249A, in effect prior to the effective date of the bill.
  6 33    The bill requires insurers who wish to issue certified
  6 34 long=term care insurance policies that meet the requirements
  6 35 of the bill to offer, at a minimum, a policy that provides
  7  1 both facility coverage and nonfacility coverage.  If the
  7  2 insurer provides both types of coverage, the insurer may also
  7  3 offer a policy that provides only facility coverage.
  7  4    Under the bill, an individual who purchases or is covered
  7  5 by a certified long=term care insurance policy would be
  7  6 allowed an asset disregard under the medical assistance
  7  7 program.  The asset disregard is a $1 increase in the amount
  7  8 of assets the individual may retain under the medical
  7  9 assistance program for each $1 of benefits paid out under the
  7 10 individual's certified long=term care insurance policy for
  7 11 qualified long=term care services if the benefits meet minimum
  7 12 amounts established in the bill.
  7 13    The bill also provides that beginning September 1, 2006, or
  7 14 one year after the effective date of the bill, whichever is
  7 15 later, the commissioner of insurance is to issue a bulletin on
  7 16 September 1 of each year, declaring the minimum face amount
  7 17 for policies to qualify for the asset disregard program for
  7 18 the following calendar year.  In making this determination,
  7 19 the commissioner is to consult with the division responsible
  7 20 for collecting data on average nursing home costs in Iowa.
  7 21 Additionally, in making this determination, the commissioner
  7 22 is to consider the current average daily cost for three years
  7 23 of nursing home care and other relevant information.
  7 24    The bill provides that if the Iowa long=term care asset
  7 25 disregard incentive program is discontinued, an individual who
  7 26 purchased or is covered under a certified long=term care
  7 27 insurance policy prior to the date the program is discontinued
  7 28 is eligible to continue to receive an asset disregard under
  7 29 the bill.  The bill allows an individual participating in the
  7 30 asset preservation program existing on the effective date of
  7 31 the bill to continue to receive that asset adjustment and
  7 32 directs the department to adopt rules to allow an individual
  7 33 who purchased long=term care insurance prior to the effective
  7 34 date of the bill to receive an asset disregard incentive.  The
  7 35 bill allows for reciprocal agreements to extend the asset
  8  1 disregard program to Iowa residents who have purchased or are
  8  2 covered under certified long=term care insurance policies in
  8  3 other states.
  8  4    The bill authorizes the department of human services and
  8  5 the insurance division to adopt rules to administer this new
  8  6 Code chapter, but this authority is to be construed narrowly.
  8  7 The insurance division is directed to consult with
  8  8 representatives of the insurance industry in adopting such
  8  9 rules.
  8 10    The bill directs the department of human services to amend
  8 11 the medical assistance state plan to allow for disregard of
  8 12 all amounts paid out under a certified long=term care
  8 13 insurance policy and to seek approval of a state plan
  8 14 amendment or any waiver necessary from the federal government
  8 15 to implement the bill.
  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 and other provisions of the bill take effect
  8 20 only if funds are specifically appropriated to the insurance
  8 21 division for that purpose, only if the necessary Medicaid
  8 22 state plan amendment and waiver are approved, and then no
  8 23 sooner than six months after both of those requirements are
  8 24 met.
  8 25    The bill appropriates $300,000 from the general fund of the
  8 26 state to the division of insurance of the department of
  8 27 commerce for the fiscal year beginning July 1, 2005, and
  8 28 ending June 30, 2006, to establish an educational program to
  8 29 inform Iowans regarding the Iowa long=term care asset
  8 30 disregard incentive program and for up to two full=time
  8 31 equivalent positions.
  8 32 LSB 1389HV 81
  8 33 pf:nh/pj/5