HB1791 95TH GENERAL ASSEMBLY

LRB095 11307 KBJ 31966 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB1791

Introduced 2/23/2007, by Rep. Carolyn H. Krause

SYNOPSIS AS INTRODUCED:

New Act
320 ILCS 35/Act rep.

Creates the Long-Term Care Partnership Program Act. Establishes the Illinois Long-Term Care Partnership Program, to be administered by the Department of Healthcare and Family Services with the assistance of the Division of Insurance, to do the following: (1) provide incentives for individuals to insure against the costs of providing for their long-term care needs; (2) provide a mechanism for individuals to qualify for coverage of the cost of their long-term care needs under Medicaid without first being required to substantially exhaust their resources; (3) provide counseling services to individuals planning for their long-term care needs; and (4) alleviate the financial burden on the State's medical assistance program by encouraging the pursuit of private initiatives. Sets out the specific duties of the Department and the Division concerning the administration of the Program. Sets out the specific responsibilities for issuers of qualified long-term care insurance partnership policies. Provides that the Department and the Division may adopt rules for the implementation and administration of the Act. Repeals the Partnership for Long-Term Care Act. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning insurance.

WHEREAS, Our nation's current financing structure relies too heavily on individuals and families to bear the financial burden of long-term supportive services; and

WHEREAS, The financial burden can be so large that, for many individuals, particularly those with moderate income, the only alternative is Medicaid, which requires spending down all assets in order to qualify to receive long-term care benefits; and

WHEREAS, Medicare is not intended to cover the majority of long-term care expenses; and

WHEREAS, Medicaid is the largest source of funding for long-term care in the United States, making the financing of long-term care costs a significant issue for both state and federal budgets; and

WHEREAS, The growth in spending by the federal government and states for long-term care services through Medicaid will continue to increase as the American population ages; and

WHEREAS, One solution to help address the spiralling Medicaid growth and encourage individuals to plan for their long-term care is the Long-Term Care Partnership Program, a public-private partnership between states and private insurance companies, therefore

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Long Term Care Partnership Program Act.

Section 5. Definitions. In this Act:

"Department" means the Department of Healthcare and Family Services.

"Division" means the Division of Insurance of the Department of Financial and Professional Regulation.

"Medicaid" means the federal medical assistance program established under Title XIX of the Social Security Act.

"Qualified long-term care insurance partnership policy" means a policy that:

(1) covers an insured who was a resident of this State when coverage first became effective under the policy;

(2) is a qualified long-term care insurance policy as defined in Section 7702B(b) of the Internal Revenue Code of 1986 issued not earlier than the effective date of the State plan amendment;

(3) meets the model regulations and requirements of the National Association of Insurance Commissioners model specified in Paragraph 5 of Title VI, Section 6021 of the federal Deficit Reduction Act of 2005, and the Director of Insurance certifies such policy as meeting these requirements; and

(4) if the policy is sold to an individual who:

(i) has not attained age 61 as of the date of purchase, the policy provides compound annual inflation protection;

(ii) has as attained age 61 but has not attained age 76 as of the date of purchase, the policy provides some level of inflation protection; or

(iii) has attained age 76 as of the date of purchase, the policy may, but is not required to, provide some level of inflation protection.

"State plan amendment" means a State Medicaid Plan Amendment made to the federal Department of Health and Human Services that provides for the disregard of any assets or resources in an amount equal to the insurance benefit payments that are made to or on the behalf of an individual who is a beneficiary under a qualified long-term care insurance partnership policy.

Section 10. Long-Term Care Partnership Program; establishment.

(a) As per Title VI, Section 6021 of the federal Deficit Reduction Act of 2005, there is established the Illinois Long-Term Care Partnership Program, to be administered by the Department with the assistance of the Division, to do the following:

(1) provide incentives for individuals to insure against the costs of providing for their long-term care needs;

(2) provide a mechanism for individuals to qualify for coverage of the cost of their long-term care needs under Medicaid without first being required to substantially exhaust their resources;

(3) provide counseling services to individuals planning for their long-term care needs; and

(4) alleviate the financial burden on the State's medical assistance program by encouraging the pursuit of private initiatives.

Section 15. Duties of the Department. The Department must do all of the following:

(1) Within 180 days after the effective date of this Act, make an application to the federal Department of Health and Human Services for a State plan amendment to establish the assets an individual owns and may retain under Medicaid and still qualify for benefits under Medicaid at the time the individual applies for benefits.

(2) Provide information and technical assistance to the Division on the Division's role in ensuring that any individual who sells a qualified long-term care insurance partnership policy receives training and demonstrates evidence of an understanding of such policies and how they relate to other public and private coverage of long-term care.

Section 20. Assets. The Department must require that the total assets an individual owns and may retain under Medicaid and still qualify for Medicaid benefits at the time the individual applies for long-term care benefits, if the individual is a beneficiary of a long-term care insurance partnership policy, are increased by $1 for each $1 of benefit paid out under the individual's long-term care insurance partnership policy if the individual purchased the policy through the Illinois Long-Term Care Partnership Program.

Section 25. Duties of the Division of Insurance. The Division may not impose any requirement affecting the terms or benefits of qualified long-term care insurance partnership policies unless the Division imposes such a requirement on all long-term care policies sold in this State without regard to whether the policy is covered under the partnership or is offered in connection with such partnership.

Section 30. Issuers of qualified long-term care insurance partnership policies; responsibilities. The issuers of qualified long-term care insurance partnership policies in this State shall provide regular reports to both the Secretary of the federal Department of Health and Human Services in accordance with federal regulation, as well as to the Department and to the Division, that include notification regarding when benefits provided under the policy have been paid and the amount of such benefits paid, notification regarding when the policy otherwise terminates, and such other information that may be appropriate to the administration of the partnership program, as determined by either the Department, the Division, or the federal Department of Health and Human Services.

Section 35. Administration. The Department and the Division may adopt rules for the implementation and administration of this Act. The Department and Division must comply with all federal rules developed as per Title VI, Section 6021 of the Federal Deficit Reduction Act of 2005, regarding data reporting, reciprocity with other states that develop long-term care insurance partnership programs, and any other matters.

(320 ILCS 35/Act rep.)

Section 40. The Partnership for Long-Term Care Act is repealed.

Section 99. Effective date. This Act takes effect upon becoming law.