Report Title:

Long-Term Care Partnership Program

 

Description:

Implements the long-term care partnership program, allowing individuals who have exhausted their private long-term care insurance coverage to qualify for medicaid coverage for continued long-term care prior to exhausting their resources.  (SD1)

 


THE SENATE

S.B. NO.

1110

TWENTY-FIFTH LEGISLATURE, 2009

S.D. 1

STATE OF HAWAII

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO LONG-TERM CARE.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter   

HAWAII PARTNERSHIP FOR LONG-TERM CARE PROGRAM

     §   ‑1  Purpose.  The purpose of the Hawaii partnership for long-term care program is to combine funds from private long-term care insurance and medicaid, or its successor program, to finance long-term care.  Under the program, an individual may purchase a certified long-term care insurance partnership policy in an amount commensurate with the individual's assets.  Notwithstanding any other law to the contrary, assets of the individual purchasing a certified long-term care insurance partnership policy shall not be considered by the department for determination of eligibility for medicaid, or its successor program, or for any other long-term care services administered by the department.  The program will reduce future medicaid costs for long-term care by delaying or eliminating dependence on medicaid by providing incentives for individuals to insure against the potentially high costs of long-term care.  Currently, over twenty states, including California, Oregon, and New York, offer long-term care insurance partnership policies.

     §   ‑2  Definitions.  For the purposes of this chapter:

     "Certified long-term care insurance partnership policy" means a policy provided by a producer in accordance with chapter 431 and approved by the department that meets all of the requirements of a qualified long-term care insurance policy as defined in section 7702B(b) of the Internal Revenue Code and was issued not earlier than the effective date of this chapter to cover an insured who was a resident of Hawaii when coverage first became effective under the policy.

     "Department" means the department of human services.

     "Medicaid" means the program for medical assistance established under 42 United States Code sections 1396 through 1396v, or any successor program.

     "Partnership" means a cooperative agreement between the State and an approved long-term care insurance producer to provide long-term care coverage to qualified individuals.

     "State plan amendment" means the 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 certified long-term care insurance policy.

     §   ‑3  Eligibility for benefits; resources not considered.  (a)  An individual may purchase a certified long-term care insurance partnership policy that covers long-term care services in an amount equal to the resources the individual wishes to protect, so long as the amount of insurance purchased exceeds the minimum level set by the department pursuant to section    ‑6.

     (b)  Notwithstanding any other law to the contrary, an individual who purchases a certified long-term care insurance partnership policy and has resources above the eligibility levels for receipt of medicaid shall be eligible to receive medicaid benefits and any other long-term care services specified by the department without regard to the individual's resources.  The resources not to be considered as provided by this section shall be equal to, or in some proportion set by the department pursuant to section    ‑6 that is less than equal to, the amount of long-term care insurance payments made.

     §   ‑4  Amendments to medicaid rules and state plan.  (a)  The department shall prepare a state plan amendment to seek appropriate amendments to its medicaid rules and state plan to allow protection of resources and income pursuant to section    ‑3.  The protection shall be provided to the extent approved by the federal Centers for Medicare and Medicaid Services for any purchaser of a certified long-term care insurance partnership policy and shall last for the life of the purchaser.  The protection shall be provided under the medicaid program.  Any purchaser of a certified long-term care insurance partnership policy shall be guaranteed coverage under the medicaid program to the extent the individual meets all other applicable eligibility requirements for the receipt of medicaid not relating to the individual's resources.

     (b)  The department shall seek any federal waivers and approvals necessary to accomplish the purposes of this chapter.

     §   ‑5  Certification of policies or plans.  The department shall only certify a policy as a certified long-term care insurance partnership policy if it meets the requirements of chapter 431, 42 United States Code 1396p, and section 7702B(b) of the Internal Revenue Code.   

     §   ‑6  Rules.  The department shall adopt rules to implement this chapter, including but not limited to rules establishing:

     (1)  The population and age groups eligible to participate in the long-term care partnership program;

     (2)  The minimum level of long-term care insurance or long-term care coverage included in health care service plan contracts that must be purchased to meet the requirement of section    ‑3;

     (3)  The amount and types of services that long-term care insurance shall include in order to be considered a certified long-term care insurance partnership policy;

     (4)  The reporting requirements for producers of certified long-term care insurance partnership policies; and

     (5)  The percentage, if any, of an individual's resources that may be considered in determining eligibility as provided in section    ‑3.

     §   ‑7  Long-term care partnership program outreach.  The department shall establish an outreach program to educate consumers about the need for long-term care, the mechanisms for financing long-term care, the availability of long-term care insurance, and asset protection provided under this chapter.  The department shall coordinate with the executive office on aging to establish the program."

     SECTION 2.  Section 431:10H-221, Hawaii Revised Statutes, is amended to read as follows:

     "§431:10H-221  Requirements for application forms and replacement coverage.  (a)  Application forms shall include questions designed to elicit information as to whether, as of the date of application, the applicant has another long-term care insurance policy or certificate in force or whether a long-term care policy or certificate is intended to replace any other accident and health or sickness or long-term care policy or certificate presently in force.  A supplementary application or other form to be signed by the applicant and producer, except where the coverage is sold without a producer, containing the questions may be used.  With regard to a replacement policy issued to a group defined by paragraph (1) under the definition of "group long-term care insurance" in section 431:10H-104, the following questions may be modified only to the extent necessary to elicit information about accident and health or sickness and long-term care insurance policies other than the group policy being replaced; provided that the certificate holder has been notified of the replacement:

     (1)  Do you have another long-term care insurance policy or certificate in force (including a health care service contract or health maintenance organization contract)?

     (2)  Did you have another long-term care insurance policy or certificate in force during the last twelve months?

         (A)  If so, with which company?

         (B)  If that policy lapsed, when did it lapse?

     (3)  Are you covered by medicaid?

     (4)  Do you intend to replace any of your medical or accident and health or sickness insurance coverage with this policy (certificate)?

     (b)  Producers shall list any other accident and health or sickness insurance policies they have sold to the applicant, and the producer shall list policies sold that are still in force and list policies sold in the past five years that are no longer in force.

     (c)  Upon determining that a sale will involve replacement, an insurer, other than an insurer using direct response solicitation methods, or its producer, shall furnish the applicant, prior to issuance or delivery of the individual long-term care insurance policy, a notice regarding replacement of accident and health or sickness or long-term care coverage.  One copy of the notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the insurer.  The required notice shall be provided in the same manner as shown in section 14C of the April, 2002, NAIC Long-Term Care Insurance Model Regulation.

     (d)  Insurers using direct response solicitation methods shall deliver a notice regarding replacement of accident and health or sickness or long-term care coverage to the applicant upon issuance of the policy.  The required notice shall be provided in the same manner as shown in section 14D of the April, 2002, NAIC Long-Term Care Insurance Model Regulation.

     (e)  Where replacement is intended, the replacing insurer shall notify, in writing, the existing insurer of the proposed replacement.  The existing policy shall be identified by the insurer, name of the insured, and policy number or address including zip code.  Notice shall be made within five working days from the date the application is received by the insurer or the date the policy is issued, whichever is sooner.

     (f)  Life insurance policies that accelerate benefits for long-term care shall comply with this section if the policy being replaced is a long-term care insurance policy.  If the policy being replaced is a life insurance policy, the insurer shall comply with the replacement requirements for life insurance policies.  If a life insurance policy that accelerates benefits for long-term care is replaced by another policy, the replacing insurer shall comply with both the long-term care and the life insurance replacement requirements.

     (g)  If authorized by federal law or a federal waiver is granted with respect to the long-term care partnership program as provided under chapter    , issuers of long-term care policies may voluntarily exchange a current long-term care insurance policy for a long-term care partnership policy that meets the requirements of 42 United States Code section 1396p after the effective date of the state plan amendment implementing the partnership program in the State."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.