S.1932
Deficit Reduction Act of 2005 (Engrossed Amendment as Agreed
to by Senate)
as amended by the Senate December 21, 2006
selected sections only
CHAPTER 2--LONG-TERM CARE
UNDER MEDICAID
Subchapter A--Reform of Asset Transfer Rules
SEC. 6011. LENGTHENING LOOK-BACK PERIOD; CHANGE IN BEGINNING
DATE FOR PERIOD OF INELIGIBILITY.
(a) Lengthening Look-Back Period for All Disposals to 5 Years-
Section 1917(c)(1)(B)(i) of the Social Security Act (42 U.S.C.
1396p(c)(1)(B)(i)) is amended by inserting `or in the case of any other
disposal of assets made on or after the date of the enactment of the
Deficit Reduction Act of 2005' before `, 60 months'.
(b) Change in Beginning Date for Period of Ineligibility-
Section 1917(c)(1)(D) of such Act (42 U.S.C. 1396p(c)(1)(D)) is
amended--
(1) by striking `(D) The date' and inserting `(D)(i) In the
case of a transfer of asset made before the date of the enactment of
the Deficit Reduction Act of 2005, the date'; and
(2) by adding at the end the following new clause:
`(ii) In the case of a transfer of asset made on or after the
date of the enactment of the Deficit Reduction Act of 2005, the date
specified in this subparagraph is the first day of a month during or
after which assets have been transferred for less than fair market
value, or the date on which the individual is eligible for medical
assistance under the State plan and would otherwise be receiving
institutional level care described in subparagraph (C) based on an
approved application for such care but for the application of the
penalty period, whichever is later, and which does not occur during any
other period of ineligibility under this subsection.'.
(c) Effective Date- The amendments made by this section shall
apply to transfers made on or after the date of the enactment of this
Act.
(d) Availability of Hardship Waivers- Each State shall provide
for a hardship waiver process in accordance with section 1917(c)(2)(D)
of the Social Security Act (42 U.S.C. 1396p(c)(2)(D))--
(1) under which an undue hardship exists when application of
the transfer of assets provision would deprive the individual--
(A) of medical care such that the individual's health or
life would be endangered; or
(B) of food, clothing, shelter, or other necessities of
life; and
(A) notice to recipients that an undue hardship exception
exists;
(B) a timely process for determining whether an undue
hardship waiver will be granted; and
(C) a process under which an adverse determination can be
appealed.
(e) Additional Provisions on Hardship Waivers-
(1) APPLICATION BY FACILITY- Section 1917(c)(2) of the Social
Security Act (42 U.S.C. 1396p(c)(2)) is amended--
(A) by striking the semicolon at the end of subparagraph (D)
and inserting a period; and
(B) by adding after and below such subparagraph the
following:
`The procedures established under subparagraph (D) shall permit
the facility in which the institutionalized individual is residing to
file an undue hardship waiver application on behalf of the individual
with the consent of the individual or the personal representative of
the individual.'.
(2) Authority to make bed hold payments for hardship
applicants- Such section is further amended by adding at the end the
following: `While an application for an undue hardship waiver is
pending under subparagraph (D) in the case of an individual who is a
resident of a nursing facility, if the application meets such criteria
as the Secretary specifies, the State may provide for payments for
nursing facility services in order to hold the bed for the individual
at the facility, but not in excess of payments for 30 days.'.
SEC. 6012. DISCLOSURE AND TREATMENT OF ANNUITIES.
(a) In General- Section 1917 of the Social Security Act (42
U.S.C. 1396p) is amended by redesignating subsection (e) as subsection
(f) and by inserting after subsection (d) the following new subsection:
`(e)(1) In order to meet the requirements of this section for
purposes of section 1902(a)(18), a State shall require, as a condition
for the provision of medical assistance for services described in
subsection (c)(1)(C)(i) (relating to long-term care services) for an
individual, the application of the individual for such assistance
(including any recertification of eligibility for such assistance)
shall disclose a description of any interest the individual or
community spouse has in an annuity (or similar financial instrument, as
may be specified by the Secretary), regardless of whether the annuity
is irrevocable or is treated as an asset. Such application or
recertification form shall include a statement that under paragraph (2)
the State becomes a remainder beneficiary under such an annuity or
similar financial instrument by virtue of the provision of such medical
assistance.
`(2)(A) In the case of disclosure concerning an annuity under
subsection (c)(1)(F), the State shall notify the issuer of the annuity
of the right of the State under such subsection as a preferred
remainder beneficiary in the annuity for medical assistance furnished
to the individual. Nothing in this paragraph shall be construed as
preventing such an issuer from notifying persons with any other
remainder interest of the State's remainder interest under such
subsection.
`(B) In the case of such an issuer receiving notice under
subparagraph (A), the State may require the issuer to notify the State
when there is a change in the amount of income or principal being
withdrawn from the amount that was being withdrawn at the time of the
most recent disclosure described in paragraph (1). A State shall take
such information into account in determining the amount of the State's
obligations for medical assistance or in the individual's eligibility
for such assistance.
`(3) The Secretary may provide guidance to States on categories
of transactions that may be treated as a transfer of asset for less
than fair market value.
`(4) Nothing in this subsection shall be construed as preventing
a State from denying eligibility for medical assistance for an
individual based on the income or resources derived from an annuity
described in paragraph (1).'.
(b) REQUIREMENT FOR STATE TO BE NAMED AS A REMAINDER
BENEFICIARY- Section 1917(c)(1) of such Act (42 U.S.C. 1396p(c)(1)), is
amended by adding at the end the following:
`(F) For purposes of this paragraph, the purchase of an annuity
shall be treated as the disposal of an asset for less than fair market
value unless--
`(i) the State is named as the remainder beneficiary in the
first position for at least the total amount of medical assistance paid
on behalf of the annuitant under this title; or
`(ii) the State is named as such a beneficiary in the second
position after the community spouse or minor or disabled child and is
named in the first position if such spouse or a representative of such
child disposes of any such remainder for less than fair market value.'.
(c) INCLUSION OF TRANSFERS TO PURCHASE BALLOON ANNUITIES-
Section 1917(c)(1) of such Act (42 U.S.C. 1396p(c)(1)), as amended by
subsection (b), is amended by adding at the end the following:
`(G) For purposes of this paragraph with respect to a transfer
of assets, the term `assets' includes an annuity purchased by or on
behalf of an annuitant who has applied for medical assistance with
respect to nursing facility services or other long-term care services
under this title unless--
`(I) an annuity described in subsection (b) or (q) of
section 408 of the Internal Revenue Code of 1986; or
`(II) purchased with proceeds from--
`(aa) an account or trust described in subsection (a),
(c), or (p) of section 408 of such Code;
`(bb) a simplified employee pension (within the meaning of
section 408(k) of such Code); or
`(cc) a Roth IRA described in section 408A of such Code; or
`(I) is irrevocable and nonassignable;
`(II) is actuarially sound (as determined in accordance with
actuarial publications of the Office of the Chief Actuary of the Social
Security Administration); and
`(III) provides for payments in equal amounts during the
term of the annuity, with no deferral and no balloon payments made.'.
(d) Effective Date- The amendments made by this section shall
apply to transactions (including the purchase of an annuity) occurring
on or after the date of the enactment of this Act.
SEC. 6013. APPLICATION OF `INCOME-FIRST' RULE IN APPLYING
COMMUNITY SPOUSE'S INCOME BEFORE ASSETS IN PROVIDING SUPPORT OF
COMMUNITY SPOUSE.
(a) In General- Section 1924(d) of the Social Security Act (42
U.S.C. 1396r-5(d)) is amended by adding at the end the following new
subparagraph:
`(6) APPLICATION OF `INCOME FIRST' RULE TO REVISION OF
COMMUNITY SPOUSE RESOURCE ALLOWANCE- For purposes of this subsection
and subsections (c) and (e), a State must consider that all income of
the institutionalized spouse that could be made available to a
community spouse, in accordance with the calculation of the community
spouse monthly income allowance under this subsection, has been made
available before the State allocates to the community spouse an amount
of resources adequate to provide the difference between the minimum
monthly maintenance needs allowance and all income available to the
community spouse.'.
(b) Effective Date- The amendment made by subsection (a) shall
apply to transfers and allocations made on or after the date of the
enactment of this Act by individuals who become institutionalized
spouses on or after such date.
SEC. 6014. DISQUALIFICATION FOR LONG-TERM CARE ASSISTANCE FOR
INDIVIDUALS WITH SUBSTANTIAL HOME EQUITY.
(a) In General- Section 1917 of the Social Security Act, as
amended by section 6012(a), is further amended by redesignating
subsection (f) as subsection (g) and by inserting after subsection (e)
the following new subsection:
`(f)(1)(A) Notwithstanding any other provision of this title,
subject to subparagraphs (B) and (C) of this paragraph and paragraph
(2), in determining eligibility of an individual for medical assistance
with respect to nursing facility services or other long-term care
services, the individual shall not be eligible for such assistance if
the individual's equity interest in the individual's home exceeds
$500,000.
`(B) A State may elect, without regard to the requirements of
section 1902(a)(1) (relating to statewideness) and section
1902(a)(10)(B) (relating to comparability), to apply subparagraph (A)
by substituting for `$500,000', an amount that exceeds such amount, but
does not exceed $750,000.
`(C) The dollar amounts specified in this paragraph shall be
increased, beginning with 2011, from year to year based on the
percentage increase in the consumer price index for all urban consumers
(all items; United States city average), rounded to the nearest $1,000.
`(2) Paragraph (1) shall not apply with respect to an individual
if--
`(A) the spouse of such individual, or
`(B) such individual's child who is under age 21, or (with
respect to States eligible to participate in the State program
established under title XVI) is blind or permanently and totally
disabled, or (with respect to States which are not eligible to
participate in such program) is blind or disabled as defined in section
1614,
is lawfully residing in the individual's home.
`(3) Nothing in this subsection shall be construed as preventing
an individual from using a reverse mortgage or home equity loan to
reduce the individual's total equity interest in the home.
`(4) The Secretary shall establish a process whereby paragraph
(1) is waived in the case of a demonstrated hardship.'.
(b) Effective Date- The amendment made by subsection (a) shall
apply to individuals who are determined eligible for medical assistance
with respect to nursing facility services or other long-term care
services based on an application filed on or after January 1, 2006.
SEC. 6015. ENFORCEABILITY OF CONTINUING CARE RETIREMENT
COMMUNITIES (CCRC) AND LIFE CARE COMMUNITY ADMISSION CONTRACTS.
(a) Admission Policies of Nursing Facilities- Section 1919(c)(5)
of the Social Security Act (42 U.S.C. 1396r(c)(5)) is amended--
(1) in subparagraph (A)(i)(II), by inserting `subject to
clause (v),' after `(II)'; and
(2) by adding at the end of subparagraph (B) the following new
clause:
`(v) TREATMENT OF CONTINUING CARE RETIREMENT COMMUNITIES
ADMISSION CONTRACTS- Notwithstanding subclause (II) of subparagraph
(A)(i), subject to subsections (c) and (d) of section 1924, contracts
for admission to a State licensed, registered, certified, or equivalent
continuing care retirement community or life care community, including
services in a nursing facility that is part of such community, may
require residents to spend on their care resources declared for the
purposes of admission before applying for medical assistance.'.
(b) Treatment of Entrance Fees- Section 1917 of such Act (42
U.S.C. 1396p), as amended by sections 6012(a) and 6014(a), is amended
by redesignating subsection (g) as subsection (h) and by inserting
after subsection (f) the following new subsection:
`(g) Treatment of Entrance Fees of Individuals Residing in
Continuing Care Retirement Communities-
`(1) IN GENERAL- For purposes of determining an individual's
eligibility for, or amount of, benefits under a State plan under this
title, the rules specified in paragraph (2) shall apply to individuals
residing in continuing care retirement communities or life care
communities that collect an entrance fee on admission from such
individuals.
`(2) TREATMENT OF ENTRANCE FEE- For purposes of this
subsection, an individual's entrance fee in a continuing care
retirement community or life care community shall be considered a
resource available to the individual to the extent that--
`(A) the individual has the ability to use the entrance fee,
or the contract provides that the entrance fee may be used, to pay for
care should other resources or income of the individual be insufficient
to pay for such care;
`(B) the individual is eligible for a refund of any
remaining entrance fee when the individual dies or terminates the
continuing care retirement community or life care community contract
and leaves the community; and
`(C) the entrance fee does not confer an ownership interest
in the continuing care retirement community or life care community.'.
SEC. 6016. ADDITIONAL REFORMS OF MEDICAID ASSET TRANSFER RULES.
(a) REQUIREMENT TO IMPOSE PARTIAL MONTHS OF INELIGIBILITY-
Section 1917(c)(1)(E) of the Social Security Act (42 U.S.C.
1396p(c)(1)(E)) is amended by adding at the end the following:
`(iv) A State shall not round down, or otherwise disregard any
fractional period of ineligibility determined under clause (i) or (ii)
with respect to the disposal of assets.'.
(b) Authority for States To Accumulate Multiple Transfers Into
One Penalty Period- Section 1917(c)(1) of such Act (42 U.S.C.
1396p(c)(1)), as amended by subsections (b) and (c) of section 6012, is
amended by adding at the end the following:
`(H) Notwithstanding the preceding provisions of this paragraph,
in the case of an individual (or individual's spouse) who makes
multiple fractional transfers of assets in more than 1 month for less
than fair market value on or after the applicable look-back date
specified in subparagraph (B), a State may determine the period of
ineligibility applicable to such individual under this paragraph by--
`(i) treating the total, cumulative uncompensated value of all
assets transferred by the individual (or individual's spouse) during
all months on or after the look-back date specified in subparagraph (B)
as 1 transfer for purposes of clause (i) or (ii) (as the case may be)
of subparagraph (E); and
`(ii) beginning such period on the earliest date which would
apply under subparagraph (D) to any of such transfers.'.
(c) INCLUSION OF TRANSFER OF CERTAIN NOTES AND LOANS ASSETS-
Section 1917(c)(1) of such Act (42 U.S.C. 1396p(c)(1)), as amended by
subsection (b), is amended by adding at the end the following:
`(I) For purposes of this paragraph with respect to a transfer
of assets, the term `assets' includes funds used to purchase a
promissory note, loan, or mortgage unless such note, loan, or mortgage--
`(i) has a repayment term that is actuarially sound (as
determined in accordance with actuarial publications of the Office of
the Chief Actuary of the Social Security Administration);
`(ii) provides for payments to be made in equal amounts during
the term of the loan, with no deferral and no balloon payments made; and
`(iii) prohibits the cancellation of the balance upon the
death of the lender.
In the case of a promissory note, loan, or mortgage that does not
satisfy the requirements of clauses (i) through (iii), the value of
such note, loan, or mortgage shall be the outstanding balance due as of
the date of the individual's application for medical assistance for
services described in subparagraph (C).'.
(d) INCLUSION OF TRANSFERS TO PURCHASE LIFE ESTATES- Section
1917(c)(1) of such Act (42 U.S.C. 1396p(c)(1)), as amended by
subsection (c), is amended by adding at the end the following:
`(J) For purposes of this paragraph with respect to a transfer
of assets, the term `assets' includes the purchase of a life estate
interest in another individual's home unless the purchaser resides in
the home for a period of at least 1 year after the date of the
purchase.'.
(1) IN GENERAL- Except as provided in paragraphs (2) and (3),
the amendments made by this section shall apply to payments under title
XIX of the Social Security Act (42 U.S.C. 1396 et seq.) for calendar
quarters beginning on or after the date of enactment of this Act,
without regard to whether or not final regulations to carry out such
amendments have been promulgated by such date.
(2) EXCEPTIONS- The amendments made by this section shall not
apply--
(A) to medical assistance provided for services furnished
before the date of enactment;
(B) with respect to assets disposed of on or before the date
of enactment of this Act; or
(C) with respect to trusts established on or before the date
of enactment of this Act.
(3) EXTENSION OF EFFECTIVE DATE FOR STATE LAW AMENDMENT- In
the case of a State plan under title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) which the Secretary of Health and Human Services
determines requires State legislation in order for the plan to meet the
additional requirements imposed by the amendments made by a provision
of this section, the State plan shall not be regarded as failing to
comply with the requirements of such title solely on the basis of its
failure to meet these additional requirements before the first day of
the first calendar quarter beginning after the close of the first
regular session of the State legislature that begins after the date of
the enactment of this Act. For purposes of the previous sentence, in
the case of a State that has a 2-year legislative session, each year of
the session is considered to be a separate regular session of the State
legislature.
Subchapter B--Expanded Access to Certain Benefits
SEC. 6021. EXPANSION OF STATE LONG-TERM CARE PARTNERSHIP
PROGRAM.
(1) IN GENERAL- Section 1917(b) of the Social Security Act (42
U.S.C. 1396p(b)) is amended--
(A) in paragraph (1)(C)--
(i) in clause (ii), by inserting `and which satisfies
clause (iv), or which has a State plan amendment that provides for a
qualified State long-term care insurance partnership (as defined in
clause (iii))' after `1993,'; and
(ii) by adding at the end the following new clauses:
`(iii) For purposes of this paragraph, the term `qualified
State long-term care insurance partnership' means an approved State
plan amendment under this title 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 behalf of an individual who is a
beneficiary under a long-term care insurance policy if the following
requirements are met:
`(I) The policy covers an insured who was a resident of such
State when coverage first became effective under the policy.
`(II) The policy 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.
`(III) The policy meets the model regulations and the
requirements of the model Act specified in paragraph (5).
`(IV) If the policy is sold to an individual who--
`(aa) has not attained age 61 as of the date of purchase,
the policy provides compound annual inflation protection;
`(bb) has attained age 61 but has not attained age 76 as
of such date, the policy provides some level of inflation protection;
and
`(cc) has attained age 76 as of such date, the policy may
(but is not required to) provide some level of inflation protection.
`(V) The State Medicaid agency under section 1902(a)(5)
provides information and technical assistance to the State insurance
department on the insurance department's role of assuring that any
individual who sells a long-term care insurance policy under the
partnership 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.
`(VI) The issuer of the policy provides regular reports to
the Secretary, in accordance with regulations of the Secretary, 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 as the Secretary determines may be appropriate to the
administration of such partnerships.
`(VII) The State does not impose any requirement affecting
the terms or benefits of such a policy unless the State imposes such
requirement on long-term care insurance policies without regard to
whether the policy is covered under the partnership or is offered in
connection with such a partnership.
In the case of a long-term care insurance policy which is
exchanged for another such policy, subclause (I) shall be applied based
on the coverage of the first such policy that was exchanged. For
purposes of this clause and paragraph (5), the term `long-term care
insurance policy' includes a certificate issued under a group insurance
contract.
`(iv) With respect to a State which had a State plan amendment
approved as of May 14, 1993, such a State satisfies this clause for
purposes of clause (ii) if the Secretary determines that the State plan
amendment provides for consumer protection standards which are no less
stringent than the consumer protection standards which applied under
such State plan amendment as of December 31, 2005.
`(v) The regulations of the Secretary required under clause
(iii)(VI) shall be promulgated after consultation with the National
Association of Insurance Commissioners, issuers of long-term care
insurance policies, States with experience with long-term care
insurance partnership plans, other States, and representatives of
consumers of long-term care insurance policies, and shall specify the
type and format of the data and information to be reported and the
frequency with which such reports are to be made. The Secretary, as
appropriate, shall provide copies of the reports provided in accordance
with that clause to the State involved.
`(vi) The Secretary, in consultation with other appropriate
Federal agencies, issuers of long-term care insurance, the National
Association of Insurance Commissioners, State insurance commissioners,
States with experience with long-term care insurance partnership plans,
other States, and representatives of consumers of long-term care
insurance policies, shall develop recommendations for Congress to
authorize and fund a uniform minimum data set to be reported
electronically by all issuers of long-term care insurance policies
under qualified State long-term care insurance partnerships to a
secure, centralized electronic query and report-generating mechanism
that the State, the Secretary, and other Federal agencies can access.';
and
(B) by adding at the end the following:
`(5)(A) For purposes of clause (iii)(III), the model regulations
and the requirements of the model Act specified in this paragraph are:
`(i) In the case of the model regulation, the following
requirements:
`(I) Section 6A (relating to guaranteed renewal or
noncancellability), other than paragraph (5) thereof, and the
requirements of section 6B of the model Act relating to such section 6A.
`(II) Section 6B (relating to prohibitions on limitations
and exclusions) other than paragraph (7) thereof.
`(III) Section 6C (relating to extension of benefits).
`(IV) Section 6D (relating to continuation or conversion of
coverage).
`(V) Section 6E (relating to discontinuance and replacement
of policies).
`(VI) Section 7 (relating to unintentional lapse).
`(VII) Section 8 (relating to disclosure), other than
sections 8F, 8G, 8H, and 8I thereof.
`(VIII) Section 9 (relating to required disclosure of rating
practices to consumer).
`(IX) Section 11 (relating to prohibitions against
post-claims underwriting).
`(X) Section 12 (relating to minimum standards).
`(XI) Section 14 (relating to application forms and
replacement coverage).
`(XII) Section 15 (relating to reporting requirements).
`(XIII) Section 22 (relating to filing requirements for
marketing).
`(XIV) Section 23 (relating to standards for marketing),
including inaccurate completion of medical histories, other than
paragraphs (1), (6), and (9) of section 23C.
`(XV) Section 24 (relating to suitability).
`(XVI) Section 25 (relating to prohibition against
preexisting conditions and probationary periods in replacement policies
or certificates).
`(XVII) The provisions of section 26 relating to contingent
nonforfeiture benefits, if the policyholder declines the offer of a
nonforfeiture provision described in paragraph (4).
`(XVIII) Section 29 (relating to standard format outline of
coverage).
`(XIX) Section 30 (relating to requirement to deliver
shopper's guide).
`(ii) In the case of the model Act, the following:
`(I) Section 6C (relating to preexisting conditions).
`(II) Section 6D (relating to prior hospitalization).
`(III) The provisions of section 8 relating to contingent
nonforfeiture benefits.
`(IV) Section 6F (relating to right to return).
`(V) Section 6G (relating to outline of coverage).
`(VI) Section 6H (relating to requirements for certificates
under group plans).
`(VII) Section 6J (relating to policy summary).
`(VIII) Section 6K (relating to monthly reports on
accelerated death benefits).
`(IX) Section 7 (relating to incontestability period).
`(B) For purposes of this paragraph and paragraph (1)(C)--
`(i) the terms `model regulation' and `model Act' mean the
long-term care insurance model regulation, and the long-term care
insurance model Act, respectively, promulgated by the National
Association of Insurance Commissioners (as adopted as of October 2000);
`(ii) any provision of the model regulation or model Act
listed under subparagraph (A) shall be treated as including any other
provision of such regulation or Act necessary to implement the
provision; and
`(iii) with respect to a long-term care insurance policy
issued in a State, the policy shall be deemed to meet applicable
requirements of the model regulation or the model Act if the State plan
amendment under paragraph (1)(C)(iii) provides that the State insurance
commissioner for the State certifies (in a manner satisfactory to the
Secretary) that the policy meets such requirements.
`(C) Not later than 12 months after the National Association of
Insurance Commissioners issues a revision, update, or other
modification of a model regulation or model Act provision specified in
subparagraph (A), or of any provision of such regulation or Act that is
substantively related to a provision specified in such subparagraph,
the Secretary shall review the changes made to the provision, determine
whether incorporating such changes into the corresponding provision
specified in such subparagraph would improve qualified State long-term
care insurance partnerships, and if so, shall incorporate the changes
into such provision.'.
(2) STATE REPORTING REQUIREMENTS- Nothing in clauses (iii)(VI)
and (v) of section 1917(b)(1)(C) of the Social Security Act (as added
by paragraph (1)) shall be construed as prohibiting a State from
requiring an issuer of a long-term care insurance policy sold in the
State (regardless of whether the policy is issued under a qualified
State long-term care insurance partnership under section
1917(b)(1)(C)(iii) of such Act) to require the issuer to report
information or data to the State that is in addition to the information
or data required under such clauses.
(3) EFFECTIVE DATE- A State plan amendment that provides for a
qualified State long-term care insurance partnership under the
amendments made by paragraph (1) may provide that such amendment is
effective for long-term care insurance policies issued on or after a
date, specified in the amendment, that is not earlier than the first
day of the first calendar quarter in which the plan amendment was
submitted to the Secretary of Health and Human Services.
(b) STANDARDS FOR RECIPROCAL RECOGNITION AMONG PARTNERSHIP
STATES- In order to permit portability in long-term care insurance
policies purchased under State long-term care insurance partnerships,
the Secretary of Health and Human Services shall develop, not later
than January 1, 2007, and in consultation with the National Association
of Insurance Commissioners, issuers of long-term care insurance
policies, States with experience with long-term care insurance
partnership plans, other States, and representatives of consumers of
long-term care insurance policies, standards for uniform reciprocal
recognition of such policies among States with qualified State
long-term care insurance partnerships under which--
(1) benefits paid under such policies will be treated the same
by all such States; and
(2) States with such partnerships shall be subject to such
standards unless the State notifies the Secretary in writing of the
State's election to be exempt from such standards.
(c) ANNUAL REPORTS TO CONGRESS-
(1) IN GENERAL- The Secretary of Health and Human Services
shall annually report to Congress on the long-term care insurance
partnerships established in accordance with section 1917(b)(1)(C)(ii)
of the Social Security Act (42 U.S.C. 1396p(b)(1)(C)(ii)) (as amended
by subsection (a)(1)).
*
* *
* *
SEC. 6062. OPPORTUNITY FOR FAMILIES
OF DISABLED CHILDREN TO PURCHASE MEDICAID COVERAGE FOR SUCH CHILDREN.
(a) STATE OPTION TO ALLOW FAMILIES OF DISABLED CHILDREN TO
PURCHASE MEDICAID COVERAGE FOR SUCH CHILDREN-
(1) IN GENERAL- Section 1902 of the Social Security Act (42
U.S.C. 1396a) is amended--
(A) in subsection (a)(10)(A)(ii)--
(i) by striking `or' at the end of subclause (XVII);
(ii) by adding `or' at the end of subclause (XVIII); and
(iii) by adding at the end the following new subclause:
`(XIX) who are disabled children described in subsection
(cc)(1);'; and
(B) by adding at the end the following new subsection:
`(cc)(1) Individuals described in this paragraph are
individuals--
`(A) who are children who have not attained 19 years of age
and are born--
`(i) on or after January 1, 2001 (or, at the
option of a State, on or after an earlier date), in the case of the
second, third, and fourth quarters of fiscal year 2007;
`(ii) on or after October 1, 1995 (or, at the
option of a State, on or after an earlier date), in the case of each
quarter of fiscal year 2008; and
`(iii) after October 1, 1989, in the case of each quarter of
fiscal year 2009 and each quarter of any fiscal year thereafter;
`(B) who would be considered disabled under section
1614(a)(3)(C) (as determined under title XVI for children but without
regard to any income or asset eligibility requirements that apply under
such title with respect to children); and
`(C) whose family income does not exceed such income level as
the State establishes and does not exceed--
`(i) 300 percent of the poverty line (as defined in section
2110(c)(5)) applicable to a family of the size involved; or
`(ii) such higher percent of such poverty line as a State
may establish, except that--
`(I) any medical assistance provided to an
individual whose family income exceeds 300 percent of such poverty line
may only be provided with State funds; and
`(II) no Federal financial participation
shall be provided under section 1903(a) for any medical assistance
provided to such an individual.'.
(2) INTERACTION WITH EMPLOYER-SPONSORED FAMILY
COVERAGE- Section 1902(cc) of such Act (42 U.S.C. 1396a(cc)), as added
by paragraph (1)(B), is amended by adding at the end the following new
paragraph:
`(2)(A) If an employer of a parent of an individual
described in paragraph (1) offers family coverage under a group health
plan (as defined in section 2791(a) of the Public Health Service Act),
the State shall--
`(i) notwithstanding section 1906, require such
parent to apply for, enroll in, and pay premiums for such coverage as a
condition of such parent's child being or remaining eligible for
medical assistance under subsection (a)(10)(A)(ii)(XIX) if the parent
is determined eligible for such coverage and the employer contributes
at least 50 percent of the total cost of annual premiums for such
coverage; and
`(ii) if such coverage is obtained--
`(I) subject to paragraph (2) of section
1916(h), reduce the premium imposed by the State under that section in
an amount that reasonably reflects the premium contribution made by the
parent for private coverage on behalf of a child with a disability; and
`(II) treat such coverage as a third party liability under
subsection (a)(25).
`(B) In the case of a parent to which subparagraph (A)
applies, a State, notwithstanding section 1906 but subject to paragraph
(1)(C)(ii), may provide for payment of any portion of the annual
premium for such family coverage that the parent is required to pay.
Any payments made by the State under this subparagraph shall be
considered, for purposes of section 1903(a), to be payments for medical
assistance.'.
(b) STATE OPTION TO IMPOSE INCOME-RELATED PREMIUMS- Section 1916
of such Act (42 U.S.C. 1396o) is amended--
(1) in subsection (a), by striking `subsection (g)' and
inserting `subsections (g) and (i)'; and
(2) by adding at the end, as amended by section 6041(b)(2),
the following new subsection:
`(i)(1) With respect to disabled children provided
medical assistance under section 1902(a)(10)(A)(ii)(XIX), subject to
paragraph (2), a State may (in a uniform manner for such children)
require the families of such children to pay monthly premiums set on a
sliding scale based on family income.
`(2) A premium requirement imposed under paragraph (1) may only
apply to the extent that--
`(A) in the case of a disabled child described in that
paragraph whose family income--
`(i) does not exceed 200 percent of the poverty
line, the aggregate amount of such premium and any premium that the
parent is required to pay for family coverage under section
1902(cc)(2)(A)(i) and other cost-sharing charges do not exceed 5
percent of the family's income; and
`(ii) exceeds 200, but does not exceed 300,
percent of the poverty line, the aggregate amount of such premium and
any premium that the parent is required to pay for family coverage
under section 1902(cc)(2)(A)(i) and other cost-sharing charges do not
exceed 7.5 percent of the family's income; and
`(B) the requirement is imposed consistent with section
1902(cc)(2)(A)(ii)(I).
`(3) A State shall not require prepayment of a premium
imposed pursuant to paragraph (1) and shall not terminate eligibility
of a child under section 1902(a)(10)(A)(ii)(XIX) for medical assistance
under this title on the basis of failure to pay any such premium until
such failure continues for a period of at least 60 days from the date
on which the premium became past due. The State may waive payment of
any such premium in any case where the State determines that requiring
such payment would create an undue hardship.'.
(c) CONFORMING AMENDMENTS- (1) Section 1903(f)(4) of
such Act (42 U.S.C. 1396b(f)(4)) is amended in the matter preceding
subparagraph (A), by inserting `1902(a)(10)(A)(ii)(XIX),' after
`1902(a)(10)(A)(ii)(XVIII),'.
(2) Section 1905(u)(2)(B) of such Act (42 U.S.C.
1396d(u)(2)(B)) is amended by adding at the end the following sentence:
`Such term excludes any child eligible for medical assistance only by
reason of section 1902(a)(10)(A)(ii)(XIX).'.
(d) Effective Date- The amendments made by this section
shall apply to medical assistance for items and services furnished on
or after January 1, 2007.
*
* *
* *
SEC. 6087. OPTIONAL CHOICE OF
SELF-DIRECTED PERSONAL ASSISTANCE SERVICES (CASH AND COUNSELING).
(a) Exemption From Certain Requirements- Section 1915
of the Social Security Act (42 U.S.C. 1396n), as amended by section
6086(a), is amended by adding at the end the following new subsection:
`(j)(1) A State may provide, as `medical assistance',
payment for part or all of the cost of self-directed personal
assistance services (other than room and board) under the plan which
are provided pursuant to a written plan of care to individuals with
respect to whom there has been a determination that, but for the
provision of such services, the individuals would require and receive
personal care services under the plan, or home and community-based
services provided pursuant to a waiver under subsection (c).
Self-directed personal assistance services may not be provided under
this subsection to individuals who reside in a home or property that is
owned, operated, or controlled by a provider of services, not related
by blood or marriage.
`(2) The Secretary shall not grant approval for a State
self-directed personal assistance services program under this section
unless the State provides assurances satisfactory to the Secretary of
the following:
`(A) Necessary safeguards have been taken to
protect the health and welfare of individuals provided services under
the program, and to assure financial accountability for funds expended
with respect to such services.
`(B) The State will provide, with respect to individuals who--
`(i) are entitled to medical assistance for
personal care services under the plan, or receive home and
community-based services under a waiver granted under subsection (c);
`(ii) may require self-directed personal assistance
services; and
`(iii) may be eligible for self-directed personal assistance
services,
an evaluation of the need for personal care under the plan, or
personal services under a waiver granted under subsection (c).
`(C) Such individuals who are determined to be
likely to require personal care under the plan, or home and
community-based services under a waiver granted under subsection (c)
are informed of the feasible alternatives, if available under the
State's self-directed personal assistance services program, at the
choice of such individuals, to the provision of personal care services
under the plan, or personal assistance services under a waiver granted
under subsection (c).
`(D) The State will provide for a support system
that ensures participants in the self-directed personal assistance
services program are appropriately assessed and counseled prior to
enrollment and are able to manage their budgets. Additional counseling
and management support may be provided at the request of the
participant.
`(E) The State will provide to the Secretary an
annual report on the number of individuals served and total
expenditures on their behalf in the aggregate. The State shall also
provide an evaluation of overall impact on the health and welfare of
participating individuals compared to non-participants every three
years.
`(3) A State may provide self-directed personal
assistance services under the State plan without regard to the
requirements of section 1902(a)(1) and may limit the population
eligible to receive these services and limit the number of persons
served without regard to section 1902(a)(10)(B).
`(4)(A) For purposes of this subsection, the term
`self-directed personal assistance services' means personal care and
related services, or home and community-based services otherwise
available under the plan under this title or subsection (c), that are
provided to an eligible participant under a self-directed personal
assistance services program under this section, under which
individuals, within an approved self-directed services plan and budget,
purchase personal assistance and related services, and permits
participants to hire, fire, supervise, and manage the individuals
providing such services.
`(B) At the election of the State--
`(i) a participant may choose to use any individual
capable of providing the assigned tasks including legally liable
relatives as paid providers of the services; and
`(ii) the individual may use the individual's
budget to acquire items that increase independence or substitute (such
as a microwave oven or an accessibility ramp) for human assistance, to
the extent that expenditures would otherwise be made for the human
assistance.
`(5) For purpose of this section, the term `approved
self-directed services plan and budget' means, with respect to a
participant, the establishment of a plan and budget for the provision
of self-directed personal assistance services, consistent with the
following requirements:
`(A) SELF-DIRECTION- The participant (or in the
case of a participant who is a minor child, the participant's parent or
guardian, or in the case of an incapacitated adult, another individual
recognized by State law to act on behalf of the participant) exercises
choice and control over the budget, planning, and purchase of
self-directed personal assistance services, including the amount,
duration, scope, provider, and location of service provision.
`(B) ASSESSMENT OF NEEDS- There is an assessment of
the needs, strengths, and preferences of the participants for such
services.
`(C) SERVICE PLAN- A plan for such services (and
supports for such services) for the participant has been developed and
approved by the State based on such assessment through a
person-centered process that--
`(i) builds upon the participant's capacity to
engage in activities that promote community life and that respects the
participant's preferences, choices, and abilities; and
`(ii) involves families, friends, and
professionals in the planning or delivery of services or supports as
desired or required by the participant.
`(D) SERVICE BUDGET- A budget for such services and
supports for the participant has been developed and approved by the
State based on such assessment and plan and on a methodology that uses
valid, reliable cost data, is open to public inspection, and includes a
calculation of the expected cost of such services if those services
were not self-directed. The budget may not restrict access to other
medically necessary care and services furnished under the plan and
approved by the State but not included in the budget.
`(E) APPLICATION OF QUALITY ASSURANCE AND RISK
MANAGEMENT- There are appropriate quality assurance and risk management
techniques used in establishing and implementing such plan and budget
that recognize the roles and responsibilities in obtaining services in
a self-directed manner and assure the appropriateness of such plan and
budget based upon the participant's resources and capabilities.
`(6) A State may employ a financial management entity
to make payments to providers, track costs, and make reports under the
program. Payment for the activities of the financial management entity
shall be at the administrative rate established in section 1903(a).'.
(b) Effective Date- The amendment made by subsection (a) shall
apply to services furnished on or after January 1, 2007.