Senate File 407 - Introduced
SENATE FILE
BY GRONSTAL and IVERSON
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 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 3607SS 81
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PAG LIN
1 1 Section 1. NEW SECTION. 249A.35 PURCHASE OF CERTIFIED
1 2 LONG=TERM CARE INSURANCE POLICY == COMPUTATION UNDER MEDICAL
1 3 ASSISTANCE PROGRAM.
1 4 A computation for the purposes of determining eligibility
1 5 under this chapter concerning an individual who is the
1 6 beneficiary of a certified long=term care insurance policy
1 7 under chapter 514H shall include consideration of the asset
1 8 disregard provided in section 514H.5.
1 9 Sec. 2. NEW SECTION. 514H.1 DEFINITIONS.
1 10 As used in this chapter, unless the context otherwise
1 11 requires:
1 12 1. "Certified long=term care insurance policy" means a
1 13 long=term care insurance contract that is issued by an insurer
1 14 or other person who complies with section 514H.4.
1 15 2. "Long=term care facility" means a facility licensed
1 16 under chapter 135C or an assisted living program certified
1 17 under chapter 231C.
1 18 3. "Long=term care insurance" means long=term care
1 19 insurance as defined in section 514G.4 and regulated in
1 20 section 514G.7.
1 21 4. "Qualified long=term care services" means qualified
1 22 long=term care services as defined in section 7702B(c) of the
1 23 Internal Revenue Code.
1 24 Sec. 3. NEW SECTION. 514H.2 IOWA LONG=TERM CARE ASSET
1 25 DISREGARD INCENTIVE PROGRAM == ESTABLISHMENT AND
1 26 ADMINISTRATION.
1 27 1. The Iowa long=term care asset disregard incentive
1 28 program is established to do all of the following:
1 29 a. Provide incentives for individuals to insure against
1 30 the costs of providing for their long=term care needs.
1 31 b. Provide a mechanism for individuals to qualify for
1 32 coverage of the costs of their long=term care needs under the
1 33 medical assistance program without first being required to
1 34 substantially exhaust all their resources.
1 35 c. Assist in developing methods for increasing access to
2 1 and the affordability of long=term care insurance.
2 2 d. Alleviate the financial burden on the state's medical
2 3 assistance program by encouraging the pursuit of private
2 4 initiatives.
2 5 2. The insurance division of the department of commerce
2 6 shall administer the program in cooperation with the division
2 7 responsible for medical services within the department of
2 8 human services. Each agency shall take appropriate action to
2 9 maintain the waiver granted by the centers for Medicare and
2 10 Medicaid services of the United States department of health
2 11 and human services under 42 U.S.C. } 1396 relating to
2 12 providing medical assistance under chapter 249A, in effect
2 13 prior to the effective date of this Act.
2 14 Sec. 4. NEW SECTION. 514H.3 ELIGIBILITY.
2 15 An individual who is the beneficiary of a certified long=
2 16 term care insurance policy approved by the insurance division
2 17 may be eligible for assistance under the medical assistance
2 18 program using the asset disregard provisions pursuant to
2 19 section 514H.5.
2 20 Sec. 5. NEW SECTION. 514H.4 INSURER REQUIREMENTS.
2 21 1. An insurer or other person who wishes to issue a
2 22 certified long=term care insurance policy meeting the
2 23 requirements of this chapter shall, at a minimum, offer to
2 24 each policyholder or prospective policyholder a policy that
2 25 provides both of the following:
2 26 a. Facility coverage, including but not limited to long=
2 27 term care facility coverage.
2 28 b. Nonfacility coverage, including but not limited to home
2 29 and community=based care coverage.
2 30 2. An insurer or other person who complies with subsection
2 31 1 may also elect to offer a certified long=term care insurance
2 32 policy that provides only facility coverage.
2 33 Sec. 6. NEW SECTION. 514H.5 ASSET DISREGARD ADJUSTMENT.
2 34 1. As used in this section, "asset disregard" means a one
2 35 dollar increase in the amount of assets an individual who is
3 1 the beneficiary of a certified long=term care insurance policy
3 2 and meets the requirements of section 514H.3 may retain under
3 3 section 249A.35 for each one dollar of benefit paid out under
3 4 the individual's certified long=term care insurance policy for
3 5 qualified long=term care services if the policy meets all of
3 6 the following criteria:
3 7 a. If purchased prior to January 1, 2005, provides
3 8 benefits in an amount equal to at least seventy thousand
3 9 dollars as computed on January 1, 2005.
3 10 b. If purchased on or after January 1, 2005, provides
3 11 benefits in an amount equal to at least seventy thousand
3 12 dollars as computed on January 1, 2005, compounded annually by
3 13 at least five percent, or an amount equal to at least the
3 14 minimum face amount specified by the commissioner of insurance
3 15 pursuant to subsection 3, whichever amount is greater.
3 16 c. Includes a provision under which the total amount of
3 17 the benefit increases by at least five percent, compounded
3 18 annually.
3 19 2. When the division responsible for medical services
3 20 within the department of human services determines whether an
3 21 individual is eligible for medical assistance under chapter
3 22 249A, the division shall make an asset disregard adjustment
3 23 for any individual who meets the requirements of section
3 24 514H.3. The asset disregard shall be available after benefits
3 25 of the certified long=term care insurance policy have been
3 26 applied to the cost of qualified long=term care services as
3 27 required under this chapter.
3 28 3. Beginning September 1, 2006, or one year after the
3 29 effective date of this Act, whichever is later, the
3 30 commissioner of insurance shall issue a bulletin annually on
3 31 that date, declaring the minimum face amount for policies to
3 32 qualify for the Iowa long=term care asset disregard incentive
3 33 program for the following calendar year. In making this
3 34 determination, the commissioner shall consult with the
3 35 division responsible for collecting data on average nursing
4 1 home costs in Iowa. Additionally, in making this
4 2 determination, the commissioner shall consider the current
4 3 average daily cost for three years of nursing home care and
4 4 other relevant information.
4 5 Sec. 7. NEW SECTION. 514H.6 APPLICATION OF ASSET
4 6 DISREGARD TO DETERMINATION OF INDIVIDUAL'S ASSETS.
4 7 A public program administered by the state that provides
4 8 long=term care services and bases eligibility upon the amount
4 9 of the individual's assets shall apply the asset disregard
4 10 under section 514H.5 in determining the amount of the
4 11 individual's assets.
4 12 Sec. 8. NEW SECTION. 514H.7 PRIOR PROGRAM ==
4 13 DISCONTINUATION OF PROGRAM.
4 14 1. If the Iowa long=term care asset disregard incentive
4 15 program is discontinued, an individual who is covered by a
4 16 certified long=term care insurance policy prior to the date
4 17 the program is discontinued is eligible to continue to receive
4 18 an asset disregard as defined under section 514H.5.
4 19 2. An individual who is covered by a long=term care
4 20 insurance policy under the long=term care asset preservation
4 21 program established pursuant to chapter 249G, Code 2005, on or
4 22 before the effective date of this Act, is eligible to continue
4 23 to receive the asset adjustment as defined under that chapter.
4 24 3. The insurance division, in cooperation with the
4 25 department of human services, shall adopt rules to provide an
4 26 asset disregard to individuals who are covered by a long=term
4 27 care insurance policy prior to the effective date of this Act,
4 28 consistent with the Iowa long=term care asset disregard
4 29 incentive program.
4 30 Sec. 9. NEW SECTION. 514H.8 RECIPROCAL AGREEMENTS TO
4 31 EXTEND ASSET DISREGARD.
4 32 The division responsible for medical services within the
4 33 department of human services may enter into reciprocal
4 34 agreements with other states to extend the asset disregard
4 35 under section 514H.5 to Iowa residents who had purchased or
5 1 were covered by certified long=term care insurance policies in
5 2 other states.
5 3 Sec. 10. NEW SECTION. 514H.9 RULES.
5 4 The insurance division of the department of commerce in
5 5 cooperation with the department of human services shall adopt
5 6 rules pursuant to chapter 17A as necessary to administer this
5 7 chapter. The insurance division shall consult with
5 8 representatives of the insurance industry in adopting such
5 9 rules. This delegation of rulemaking authority shall be
5 10 construed narrowly.
5 11 Sec. 11. Chapter 249G, Code 2005, is repealed.
5 12 Sec. 12. MEDICAL ASSISTANCE STATE PLAN AMENDMENT == WAIVER
5 13 == IOWA LONG=TERM CARE ASSET DISREGARD INCENTIVE PROGRAM.
5 14 1. The department of human services shall amend the
5 15 medical assistance state plan to provide that all amounts paid
5 16 for qualified long=term care services under a certified long=
5 17 term care insurance policy pursuant to chapter 514H, as
5 18 enacted in this Act, shall be considered in determining the
5 19 amount of the asset disregard.
5 20 2. The department of human services shall seek approval of
5 21 a medical assistance state plan amendment or make application
5 22 to the United States department of health and human services
5 23 for any waiver necessary to implement chapter 514H, as enacted
5 24 in this Act.
5 25 Sec. 13. CONTINGENT EFFECTIVE DATE == IOWA LONG=TERM CARE
5 26 ASSET DISREGARD INCENTIVE PROGRAM.
5 27 1. This Act shall not take effect until all medical
5 28 assistance state plan amendments and waivers necessary to
5 29 implement chapter 514H, as enacted in this Act, are approved
5 30 by the United States department of health and human services.
5 31 The department of human services shall notify the Code editor
5 32 if such approval is received.
5 33 2. If the requirement of subsection 1 is met, the program
5 34 shall begin no sooner than six months following the date that
5 35 the requirement is met.
6 1 Sec. 14. APPROPRIATION. There is appropriated from the
6 2 general fund of the state to the division of insurance of the
6 3 department of commerce for the fiscal year beginning July 1,
6 4 2005, and ending June 30, 2006, the following amount, or so
6 5 much thereof as is necessary, to establish an educational
6 6 program to inform Iowans regarding the Iowa long=term care
6 7 asset disregard incentive program and for up to the following
6 8 full=time equivalent positions:
6 9 .................................................. $ 300,000
6 10 ............................................... FTEs 2.00
6 11 EXPLANATION
6 12 This bill establishes an Iowa long=term care asset
6 13 disregard incentive program to provide incentives for
6 14 individuals to insure against the costs of their long=term
6 15 care needs, provide a mechanism for individuals to qualify for
6 16 coverage of the costs of their long=term care needs under the
6 17 medical assistance program without first being required to
6 18 substantially exhaust all their resources, increase access to
6 19 and the affordability of long=term care insurance, and
6 20 alleviate the financial burden on the state's medical
6 21 assistance program by encouraging the pursuit of private
6 22 initiatives. The bill directs the insurance division of the
6 23 department of commerce to administer the program in
6 24 cooperation with the division responsible for medical services
6 25 within the department of human services. The bill directs the
6 26 department of human services and the division of insurance to
6 27 each take appropriate action to maintain the waiver granted by
6 28 the centers for Medicare and Medicaid services of the United
6 29 States department of health and human services under 42 U.S.C.
6 30 } 1396 relating to providing assistance under Code chapter
6 31 249A, in effect prior to the effective date of the bill.
6 32 The bill requires insurers who wish to issue certified
6 33 long=term care insurance policies that meet the requirements
6 34 of the bill to offer, at a minimum, a policy that provides
6 35 both facility coverage and nonfacility coverage. If the
7 1 insurer provides both types of coverage, the insurer may also
7 2 offer a policy that provides only facility coverage.
7 3 Under the bill, an individual who purchases or is covered
7 4 by a certified long=term care insurance policy would be
7 5 allowed an asset disregard under the medical assistance
7 6 program. The asset disregard is a $1 increase in the amount
7 7 of assets the individual may retain under the medical
7 8 assistance program for each $1 of benefits paid out under the
7 9 individual's certified long=term care insurance policy for
7 10 qualified long=term care services if the benefits meet minimum
7 11 amounts established in the bill.
7 12 The bill also provides that beginning September 1, 2006, or
7 13 one year after the effective date of the bill, whichever is
7 14 later, the commissioner of insurance is to issue a bulletin on
7 15 September 1 of each year, declaring the minimum face amount
7 16 for policies to qualify for the asset disregard program for
7 17 the following calendar year. In making this determination,
7 18 the commissioner is to consult with the division responsible
7 19 for collecting data on average nursing home costs in Iowa.
7 20 Additionally, in making this determination, the commissioner
7 21 is to consider the current average daily cost for three years
7 22 of nursing home care and other relevant information.
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 certified 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 the effective date of
7 30 the bill to continue to receive that asset adjustment and
7 31 directs the department to adopt rules to allow an individual
7 32 who purchased long=term care insurance prior to the effective
7 33 date of the bill to receive an asset disregard incentive. The
7 34 bill allows for reciprocal agreements to extend the asset
7 35 disregard program to Iowa residents who have purchased or are
8 1 covered under certified long=term care insurance policies in
8 2 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 certified long=term care
8 12 insurance policy and to seek approval of a state plan
8 13 amendment or any waiver necessary from the federal government
8 14 to implement the bill.
8 15 The bill repeals Code chapter 249G, the current long=term
8 16 care asset preservation program.
8 17 The bill provides that the long=term care asset disregard
8 18 incentive program and other provisions of the bill take effect
8 19 only if all necessary medical assistance state plan amendments
8 20 and waivers are approved, and then no sooner than six months
8 21 after such requirement is met.
8 22 The bill appropriates $300,000 from the general fund of the
8 23 state to the division of insurance of the department of
8 24 commerce for the fiscal year beginning July 1, 2005, and
8 25 ending June 30, 2006, to establish an educational program to
8 26 inform Iowans regarding the Iowa long=term care asset
8 27 disregard incentive program and for up to two full=time
8 28 equivalent positions.
8 29 LSB 3607SS 81
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