Senate File 140 - Introduced
SENATE FILE
BY WIECK, JOHNSON, KETTERING,
IVERSON, LUNDBY, ANGELO, ZIEMAN,
HAHN, PUTNEY, TINSMAN, MULDER,
WARD, GASKILL, McKINLEY, BEHN,
MILLER, ZAUN, BRUNKHORST,
BOETTGER, SHULL, McKIBBEN, and
SEYMOUR
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to the establishment of an Iowa long=term care
2 asset disregard incentive program relative to the medical
3 assistance program, 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:
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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. "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.
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