II 

111TH CONGRESS 

1ST SESSION S. 1177 

To improve consumer protections for purchasers of long-term care insurance, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 3, 2009 

Mr. KOHL (for himself and Mr. WYDEN) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To improve consumer protections for purchasers of longterm care insurance, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Confidence in Long-Term Care Insurance Act of 2009’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—NATIONAL MARKET SURVEY; MODEL DISCLOSURES AND 

DEFINITIONS; LTC INSURANCE COMPARE 

Sec. 101. NAIC national market survey. 

Sec. 102. Model disclosures and definitions. 


smartinez on PROD1PC64 with BILLS
2 

•S 1177 IS

Sec. 103. LTC Insurance Compare. 

TITLE II—IMPROVED STATE CONSUMER PROTECTIONS FOR 

QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS AND 

MEDICAID PARTNERSHIP POLICIES 

Sec. 201. Application of Medicaid partnership required model provisions to all 

tax-qualified long-term care insurance contracts. 

Sec. 202. Streamlined process for applying new or updated model provisions. 

TITLE III—IMPROVED CONSUMER PROTECTIONS FOR MEDICAID 

PARTNERSHIP POLICIES 

Sec. 301. Biennial reports on impact of Medicaid long-term care insurance 

partnerships. 

Sec. 302. Additional consumer protections for Medicaid partnerships. 

Sec. 303. Report to Congress regarding need for minimum annual compound 

inflation protection. 

1 TITLE I—NATIONAL MARKET 

2 SURVEY; MODEL DISCLO3 SURES AND DEFINITIONS; 

4 LTC INSURANCE COMPARE 

5 SEC. 101. NAIC NATIONAL MARKET SURVEY. 

6 (a) IN GENERAL.—The Secretary shall request the 

7 NAIC to conduct biennial reviews of the national and 

8 State-specific markets for long-term care insurance poli9 cies and to submit biennial reports to the Secretary on 

10 the results of such reviews. 

11 (b) CONTENT.—The Secretary shall request that the 

12 biennial reviews include, with respect to the period occur13 ring since any prior review, analysis of the following: 

14 (1) Information on key market parameters, in15 cluding the number of carriers offering long-term 

16 care insurance, and the scope of coverage offered 

17 under those policies (such as policies offering nursVerDate Nov 24 2008 02:29 Jun 04, 2009 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1177.IS S1177

smartinez on PROD1PC64 with BILLS
3 

•S 1177 IS

1 ing-home only benefits, policies offering comprehen2 sive coverage, and hybrid products in which long3 term care benefits are present). 

4 (2) The number of complaints received and re5 solved, including benefit denials. 

6 (3) The number of policies that are cancelled 

7 (including because of having lapsed or not being re8 newed) and reasons for such cancellations. 

9 (4) The number of agents trained and the con10 tent of that training, including a description of 

11 agent training standards, the extent to which com12 petency tests are included in such standards, and 

13 the pass and fail rates associated with such tests. 

14 (5) The number of policyholders exhausting 

15 benefits. 

16 (6) Premium rate increases sought by carriers 

17 and the range of the amount of the increase sought. 

18 (7) Premium rate increases that were approved 

19 and the range of the amount of increase. 

20 (8) The number of policyholders affected by any 

21 approved premium rate increases. 

22 (9) Requests for exceptions to State reserving 

23 or capital requirements. 

24 (c) TIMING FOR BIENNIAL REVIEW AND REPORT.— 

25 The Secretary shall request the NAIC to— 


smartinez on PROD1PC64 with BILLS
4 

•S 1177 IS

1 (1) complete the initial market review under 

2 this section not later than 2 years after the date of 

3 enactment of this Act; 

4 (2) submit a report to the Secretary on the re5 sults of the initial review not later than December 

6 31, 2011; and 

7 (3) complete each subsequent biennial review 

8 and submit each subsequent biennial report not later 

9 than December 31 of each second succeeding year. 

10 (d) CONSULTATION REQUIRED.—The Secretary shall 

11 request the NAIC to consult with State insurance commis12 sioners, appropriate Federal agencies, issuers of long-term 

13 care insurance, States with experience in long-term care 

14 insurance partnership plans, other States, representatives 

15 of consumer groups, consumers of long-term care insur16 ance policies, and such other stakeholders as the Secretary 

17 or the NAIC determine appropriate, to conduct the market 

18 reviews requested under this section. 

19 (e) DEFINITIONS.—In this section and section 102: 

20 (1) LONG-TERM CARE INSURANCE POLICY.— 

21 The term ‘‘long-term care insurance policy’’— 

22 (A) means— 

23 (i) a qualified long-term care insur24 ance contract (as defined in section 


smartinez on PROD1PC64 with BILLS
5 

•S 1177 IS

1 7702B(b) of the Internal Revenue Code of 

2 1986); and 

3 (ii) a qualified long-term care insur4 ance contract that covers an insured who is 

5 a resident of a State with a qualified State 

6 long-term care insurance partnership 

7 under clause (iii) of section 1917(b)(1)(C) 

8 of the Social Security Act (42 U.S.C. 

9 1396p(b)(1)(C)) or a long-term care insur10 ance policy offered in connection with a 

11 State plan amendment described in clause 

12 (iv) of such section; and 

13 (B) includes any other insurance policy or 

14 rider described in the definition of ‘‘long-term 

15 care insurance’’ in section 4 of the model Act 

16 promulgated by the National Association of In17 surance Commissioners (as adopted December 

18 2006). 

19 (2) NAIC.—The term ‘‘NAIC’’ means the Na20 tional Association of Insurance Commissioners. 

21 (3) SECRETARY.—The term ‘‘Secretary’’ means 

22 the Secretary of Health and Human Services. 

23 SEC. 102. MODEL DISCLOSURES AND DEFINITIONS. 

24 (a) IN GENERAL.—The Secretary shall request the 

25 NAIC, in consultation with State health agencies as apVerDate Nov 24 2008 02:29 Jun 04, 2009 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1177.IS S1177

smartinez on PROD1PC64 with BILLS
6 

•S 1177 IS

1 propriate, to carry out the activities described in sub2 section (b). 

3 (b) ACTIVITIES DESCRIBED.—The activities de4 scribed in this subsection are the following: 

5 (1) DEVELOP MODEL DISCLOSURES AND DEFI6 NITIONS FOR MARKETING OF POLICIES.—To develop 

7 model language for marketing of long-term care in8 surance policies (including, as appropriate, language 

9 specific to qualified long-term care insurance con10 tracts, partnership long-term care insurance policies, 

11 and such other contracts for coverage of long-term 

12 care services or benefits as the NAIC determines ap13 propriate), that includes the following: 

14 (A) CONSISTENT DEFINITIONS.—Con15 sistent definitions for coverage of the various 

16 types of services and benefits provided under 

17 such policies, including institutional services, 

18 residential services with varying levels of assist19 ance, such as assisted living, home care serv20 ices, adult day services, and other types of 

21 home and community-based care (as appro22 priate to describe the range of services and ben23 efits offered under such policies in various 

24 States). 


smartinez on PROD1PC64 with BILLS
7 

•S 1177 IS

1 (B) CONSISTENT EXPLANATORY LAN2 GUAGE.—Consistent language for use by issuers 

3 of such policies, and for agents selling such 

4 policies, in explaining the services and benefits 

5 covered under the policies and restrictions on 

6 the services and benefits. 

7 (C) INFLATION PROTECTION OPTIONS.—A 

8 form that describes different inflation level op9 tions offered for long-term care insurance poli10 cies, including how policies with various levels 

11 of inflation protection compare in premium 

12 costs and benefits within 5-year time incre13 ments from 5 years through 30 years post-pur14 chase. 

15 (D) STANDARDIZED METHODOLOGY FOR

16 CALCULATING INFLATION PROTECTION.— 

17 Standardized methodology for use by issuers to 

18 use to calculate inflation protection under such 

19 policies. 

20 (2) ENFORCE.—To develop recommendations 

21 for enforcement of the model marketing disclosures 

22 and definitions, including standardized language for 

23 States to adopt to prohibit carriers from marketing 

24 policies within the State that do not meet the model 

25 marketing disclosures and definitions or the rate 


smartinez on PROD1PC64 with BILLS
8 

•S 1177 IS

1 stability provisions under section 20 of the long-term 

2 care insurance model Act promulgated by the Na3 tional Association of Insurance Commissioners (as 

4 adopted as of October 2000 and as of December 

5 2006) and any provisions of such section adopted 

6 after December 2006. 

7 (c) PUBLIC COMMENT.—The Secretary shall request 

8 the NAIC to allow for public comment on the work of the 

9 NAIC in carrying out the activities described in subsection 

10 (b). 

11 SEC. 103. LTC INSURANCE COMPARE. 

12 (a) IN GENERAL.—Section 6021(d) of the Deficit Re13 duction Act of 2005 (42 U.S.C. 1396p note) is amended— 

14 (1) in paragraph (2)— 

15 (A) in subparagraph (A)— 

16 (i) in clause (ii), by striking ‘‘and’’ at 

17 the end; 

18 (ii) in clause (iii), by striking the pe19 riod at the end and inserting ‘‘; and’’; and 

20 (iii) by adding at the end the fol21 lowing: 

22 ‘‘(iv) establish an Internet directory of 

23 information regarding long-term care in24 surance, to be known as ‘LTC Insurance 

25 Compare’, that shall include the following: 


smartinez on PROD1PC64 with BILLS
9 

•S 1177 IS

1 ‘‘(I) Comparison tools to assist 

2 consumers in evaluating long-term 

3 care insurance policies (as defined in 

4 subparagraph (D)) with different ben5 efits and features. 

6 ‘‘(II) State-specific information 

7 about the long-term care insurance 

8 policies marketed in a State, including 

9 the following: 

10 ‘‘(aa) Whether a State has 

11 promulgated rate stability provi12 sions for all issuers of long-term 

13 care insurance policies and how 

14 the rate stability standards work. 

15 ‘‘(bb) The rating history for 

16 issuers selling long-term care in17 surance policies in the State for 

18 at least the most recent pre19 ceding 5 years. 

20 ‘‘(cc) The policy documents 

21 for each such policy marketed in 

22 the State. 

23 ‘‘(III) Links to State information 

24 regarding long-term care under State 

25 Medicaid programs (which may be 


smartinez on PROD1PC64 with BILLS
10 

•S 1177 IS

1 provided, as appropriate, through 

2 Internet linkages to the websites of 

3 State Medicaid programs) that in4 cludes the following: 

5 ‘‘(aa) The medical assistance 

6 provided under each State’s Med7 icaid program for nursing facility 

8 services and other long-term care 

9 services (including any functional 

10 criteria imposed for receipt of 

11 such services, as reported in ac12 cordance with section 

13 1902(a)(28)(D) of the Social Se14 curity Act) and any differences 

15 from benefits and services offered 

16 under long-term care insurance 

17 policies in the State and the cri18 teria for triggering receipt of 

19 such benefits and services. 

20 ‘‘(bb) If the State has a 

21 qualified State long-term care in22 surance partnership under sec23 tion 1917(b)(1)(C)(iii) of the So24 cial Security Act, information re25 garding how and when an indiVerDate Nov 24 2008 02:29 Jun 04, 2009 Jkt 079200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1177.IS S1177

smartinez on PROD1PC64 with BILLS
11 

•S 1177 IS

1 vidual with a partnership long2 term care insurance policy who is 

3 receiving benefits under the pol4 icy should apply for medical as5 sistance for nursing facility serv6 ices or other long-term care serv7 ices under the State Medicaid 

8 program and information regard9 ing about how Medicaid asset 

10 protection is accumulated over 

11 time under such policies.’’; and 

12 (B) by adding at the end the following: 

13 ‘‘(C) CURRENT INFORMATION.—The Sec14 retary of Health and Human Services shall en15 sure that, to the greatest extent practicable, the 

16 information maintained in the National Clear17 inghouse for Long-Term Care Information, in18 cluding the information required for LTC In19 surance Compare, is the most recent informa20 tion available. 

21 ‘‘(D) LONG-TERM CARE INSURANCE POL22 ICY DEFINED.—In subparagraph (A)(iv), the 

23 term ‘long-term care insurance policy’ means a 

24 qualified long-term care insurance contract (as 

25 defined in section 7702B(b) of the Internal 


smartinez on PROD1PC64 with BILLS
12 

•S 1177 IS

1 Revenue Code of 1986), a qualified long-term 

2 care insurance contract that covers an insured 

3 who is a resident of a State with a qualified 

4 State long-term care insurance partnership 

5 under clause (iii) of section 1917(b)(1)(C) of 

6 the Social Security Act (42 U.S.C. 

7 1396p(b)(1)(C)) or a long-term care insurance 

8 policy offered in connection with a State plan 

9 amendment described in clause (iv) of such sec10 tion, and includes any other insurance policy or 

11 rider described in the definition of ‘long-term 

12 care insurance’ in section 4 of the model Act 

13 promulgated by the National Association of In14 surance Commissioners (as adopted December 

15 2006).’’; 

16 (2) by redesignating paragraph (3) as para17 graph (4); 

18 (3) in paragraph (4) (as so redesignated), by 

19 inserting ‘‘, and $5,000,000 for each of fiscal years 

20 2011 through 2013’’ after ‘‘2010’’; and 

21 (4) by inserting after paragraph (2) the fol22 lowing: 

23 ‘‘(3) CONSULTATION ON LTC INSURANCE COM24 PARE.—The Secretary of Health and Human Serv25 ices shall consult with the National Association of 


smartinez on PROD1PC64 with BILLS
13 

•S 1177 IS

1 Insurance Commissioners and the entities and stake2 holders specified in section 101(d) of the Confidence 

3 in Long-Term Care Insurance Act of 2009 in de4 signing and implementing the LTC Insurance Com5 pare required under paragraph (2)(A)(iv).’’. 

6 (b) MEDICAID STATE PLAN REQUIREMENT TO SUB7 MIT NURSING FACILITY SERVICES FUNCTIONAL CRI8 TERIA DATA.—Section 1902(a)(28) of the Social Security 

9 Act (42 U.S.C. 1396a(a)(28)) is amended— 

10 (1) in subparagraph (C), by striking ‘‘and’’ 

11 after the semicolon; 

12 (2) in subparagraph (D)(iii), by adding ‘‘and’’ 

13 after the semicolon; and 

14 (3) by inserting after subparagraph (D)(iii), the 

15 following new subparagraph: 

16 ‘‘(E) for the annual submission of data re17 lating to functional criteria for the receipt of 

18 nursing facility services under the plan (in such 

19 form and manner as the Secretary shall speci20 fy);’’. 

21 (c) EFFECTIVE DATE.— 

22 (1) IN GENERAL.—Except as provided in para23 graph (2), the amendments made by this section 

24 take effect on the date of enactment of this Act. 


smartinez on PROD1PC64 with BILLS
14 

•S 1177 IS

1 (2) EXTENSION OF EFFECTIVE DATE FOR

2 STATE LAW AMENDMENT.—In the case of a State 

3 plan under title XIX of the Social Security Act (42 

4 U.S.C. 1396 et seq.) which the Secretary of Health 

5 and Human Services determines requires State legis6 lation or State regulation in order for the plan to 

7 meet the additional requirements imposed by the 

8 amendments made by subsection (b), the State plan 

9 shall not be regarded as failing to comply with the 

10 requirements of such title solely on the basis of its 

11 failure to meet these additional requirements before 

12 the first day of the first calendar quarter beginning 

13 after the close of the first regular session of the 

14 State legislature that begins after the date of enact15 ment of this Act. For purposes of the previous sen16 tence, in the case of a State that has a 2-year legis17 lative session, each year of the session is considered 

18 to be a separate regular session of the State legisla19 ture. 


smartinez on PROD1PC64 with BILLS
15 

•S 1177 IS

1 TITLE II—IMPROVED STATE 

2 CONSUMER PROTECTIONS 

3 FOR QUALIFIED LONG-TERM 

4 CARE INSURANCE CON5 TRACTS AND MEDICAID PART6 NERSHIP POLICIES 

7 SEC. 201. APPLICATION OF MEDICAID PARTNERSHIP RE8 QUIRED MODEL PROVISIONS TO ALL TAX9 QUALIFIED LONG-TERM CARE INSURANCE 

10 CONTRACTS. 

11 (a) IN GENERAL.—Section 7702B(g)(1) of the Inter12 nal Revenue Code of 1986 (relating to consumer protec13 tion provisions) is amended— 

14 (1) in subparagraph (A), by inserting ‘‘(but 

15 only to the extent such requirements do not conflict 

16 with requirements applicable under subparagraph 

17 (B)),’’ after ‘‘paragraph (2)’’, 

18 (2) by redesignating subparagraphs (B) and 

19 (C) as subparagraphs (C) and (D), respectively, and 

20 (3) by inserting after subparagraph (A), the fol21 lowing new subparagraph: 

22 ‘‘(B) the requirements of the model regula23 tion and model Act described in section 

24 1917(b)(5) of the Social Security Act,’’. 


smartinez on PROD1PC64 with BILLS
16 

•S 1177 IS

1 (b) EFFECTIVE DATE.—The amendments made by 

2 subsection (a) shall apply to contracts issued after the 

3 date of enactment of this Act. 

4 SEC. 202. STREAMLINED PROCESS FOR APPLYING NEW OR 

5 UPDATED MODEL PROVISIONS. 

6 (a) SECRETARIAL REVIEW.— 

7 (1) TAX-QUALIFIED POLICIES.— 

8 (A) 2000 AND 2006 MODEL PROVISIONS.— 

9 Not later than 3 months after the date of en10 actment of this Act, the Secretary of the Treas11 ury, in consultation with the Secretary of 

12 Health and Human Services, shall review the 

13 model provisions specified in subsection (c)(1) 

14 for purposes of determining whether updating 

15 any such provisions for a provision specified in 

16 section 7702B(g)(2) of the Internal Revenue 

17 Code of 1986, or the inclusion of any such pro18 visions in such section, for purposes of an in19 surance contract qualifying for treatment as a 

20 qualified long-term care insurance contract 

21 under such Code, would improve consumer pro22 tections for insured individuals under such con23 tracts. 

24 (B) SUBSEQUENT MODEL PROVISIONS.— 

25 Not later than 3 months after model provisions 


smartinez on PROD1PC64 with BILLS
17 

•S 1177 IS

1 described in paragraph (2) or (3) of subsection 

2 (c) are adopted by the National Association of 

3 Insurance Commissioners, the Secretary of the 

4 Treasury, in consultation with the Secretary of 

5 Health and Human Services, shall review the 

6 model provisions to determine whether the ap7 plication of such provisions to an insurance con8 tract for purposes of qualifying for treatment as 

9 a qualified long-term care insurance contract 

10 under section 7702B(g)(2) of the Internal Rev11 enue Code of 1986, would improve consumer 

12 protections for insured individuals under such 

13 contracts. 

14 (2) MEDICAID PARTNERSHIP POLICIES.— 

15 (A) SUBSEQUENT MODEL PROVISIONS.— 

16 Not later than 3 months after model provisions 

17 described in paragraph (2) or (3) of subsection 

18 (c) are adopted by the National Association of 

19 Insurance Commissioners, the Secretary of 

20 Health and Human Services, in consultation 

21 with the Secretary of the Treasury, shall review 

22 the model provisions to determine whether the 

23 application of such provisions to an insurance 

24 contract for purposes of satisfying the require25 ments for participation in a qualified State 


smartinez on PROD1PC64 with BILLS
18 

•S 1177 IS

1 long-term care insurance partnership under sec2 tion 1917(b)(1)(C)(iii) of such Act (42 U.S.C. 

3 1396p(b)(1)(C)(iii)) would improve consumer 

4 protections for insured individuals under such 

5 contracts. 

6 (B) REVIEW OF OTHER PARTNERSHIP RE7 QUIREMENTS.—The Secretary of Health and 

8 Human Services, in consultation with the Sec9 retary of the Treasury, shall review clauses (iii) 

10 and (iv) of section 1917(b)(1)(C) for purposes 

11 of determining whether the requirements speci12 fied in such clauses should be modified to pro13 vide improved consumer protections or, as ap14 propriate, to resolve any conflicts with the ap15 plication of the 2006 model provisions under 

16 paragraph (5) of section 1917(b) (as amended 

17 by section 302(a)) or with the application of 

18 any model provisions that the Secretary deter19 mines should apply to an insurance contract as 

20 a result of a review required under subpara21 graph (A). 

22 (b) EXPEDITED RULEMAKING.— 

23 (1) TAX-QUALIFIED POLICIES.—Subject to 

24 paragraph (3), if the Secretary of the Treasury de25 termines that any model provisions reviewed under 


smartinez on PROD1PC64 with BILLS
19 

•S 1177 IS

1 subsection (a)(1) should apply for purposes of an in2 surance contract qualifying for treatment as a quali3 fied long-term care insurance contract under the In4 ternal Revenue Code of 1986, the Secretary, shall 

5 promulgate an interim final rule applying such pro6 visions for such purposes not later than 3 months 

7 after making such determination. 

8 (2) MEDICAID PARTNERSHIP POLICIES.—Sub9 ject to paragraph (3), if the Secretary of Health and 

10 Human Services determines that any model provi11 sions or requirements reviewed under subsection 

12 (a)(2) should apply for purposes of an insurance 

13 contract satisfying the requirements for participation 

14 in a qualified State long-term care insurance part15 nership under section 1917(b)(1)(C)(iii) of such Act 

16 (42 U.S.C. 1396p(b)(1)(C)(iii)), the Secretary, shall 

17 promulgate an interim final rule applying such pro18 visions for such purposes not later than 3 months 

19 after making such determination. 

20 (3) CONSULTATION REQUIRED.—The Secretary 

21 of the Treasury and the Secretary of Health and 

22 Human Services, respectively, shall consult with the 

23 National Association of Insurance Commissioners 

24 and the entities and stakeholders specified in section 

25 101(d) regarding the extent to which it is approVerDate Nov 24 2008 02:29 Jun 04, 2009 Jkt 079200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S1177.IS S1177

smartinez on PROD1PC64 with BILLS
20 

•S 1177 IS

1 priate to apply the model provisions described in 

2 paragraph (1) or (2) (as applicable) to insurance 

3 contracts described in such paragraphs through pro4 mulgation of an interim final rule. If, after such 

5 consultation— 

6 (A) the Secretary of the Treasury deter7 mines it would be appropriate to promulgate an 

8 interim final rule, the Secretary of the Treasury 

9 shall use notice and comment rulemaking to 

10 promulgate a rule applying such provisions to 

11 insurance contracts described in paragraph (1); 

12 and 

13 (B) the Secretary of Health and Human 

14 Services determines it would be appropriate to 

15 promulgate an interim final rule, the Secretary 

16 of Health and Human Services shall use notice 

17 and comment rulemaking to promulgate a rule 

18 applying such provisions to insurance contracts 

19 described in paragraph (2). 

20 (4) RULE OF CONSTRUCTION RELATING TO AP21 PLICATION OF CONGRESSIONAL REVIEW ACT.—Noth22 ing in paragraphs (1), (2), or (3) shall be construed 

23 as affecting the application of the sections 801 

24 through 808 of title 5, United States Code (com25 monly known as the ‘‘Congressional Review Act’’) to 


smartinez on PROD1PC64 with BILLS
21 

•S 1177 IS

1 any interim final rule issued in accordance with such 

2 paragraphs. 

3 (5) TECHNICAL AMENDMENT ELIMINATING

4 PRIOR REVIEW STANDARD MADE OBSOLETE.—Sec5 tion 1917(b)(5) of the Social Security Act (42 

6 U.S.C. 1396p(b)(5)) is amended by striking sub7 paragraph (C). 

8 (c) MODEL PROVISIONS.—In this section, the term 

9 ‘‘model provisions’’ means— 

10 (1) each provision of the long-term care insur11 ance model regulation, and the long-term care insur12 ance model Act, respectively, promulgated by the 

13 National Association of Insurance Commissioners 

14 (as adopted as of October 2000 and as of December 

15 2006); 

16 (2) each provision of the model language relat17 ing to marketing disclosures and definitions devel18 oped under section 102(b)(1); and 

19 (3) each provision of any long-term care insur20 ance model regulation, or the long-term care insur21 ance model Act, respectively, promulgated by the 

22 National Association of Insurance Commissioners 

23 and adopted after December 2006. 


smartinez on PROD1PC64 with BILLS
22 

•S 1177 IS

1 TITLE III—IMPROVED CON2 SUMER PROTECTIONS FOR 

3 MEDICAID PARTNERSHIP 

4 POLICIES 

5 SEC. 301. BIENNIAL REPORTS ON IMPACT OF MEDICAID 

6 LONG-TERM CARE INSURANCE PARTNER7 SHIPS. 

8 Section 6021(c) of the Deficit Reduction Act of 2005 

9 (42 U.S.C. 1396p note) is amended to read as follows: 

10 ‘‘(c) BIENNIAL REPORTS.— 

11 ‘‘(1) IN GENERAL.—Not later than January 1, 

12 2010, and biennially thereafter, the Secretary of 

13 Health and Human Services (in this subsection re14 ferred to as the ‘Secretary’) shall issue a report to 

15 States and Congress on the long-term care insurance 

16 partnerships established in accordance with section 

17 1917(b)(1)(C)(ii) of the Social Security Act (42 

18 U.S.C. 1396p(b)(1)(C)(ii)). Each report shall in19 clude (with respect to the period the report address20 es) the following information, nationally and on a 

21 State-specific basis: 

22 ‘‘(A) Analyses of the extent to which such 

23 partnerships improve access of individuals to af24 fordable long-term care services and benefits 

25 and the impact of such partnerships on Federal 


smartinez on PROD1PC64 with BILLS
23 

•S 1177 IS

1 and State expenditures on long-term care under 

2 the Medicare and Medicaid programs. 

3 ‘‘(B) Analyses of the impact of such part4 nerships on consumer decisionmaking with re5 spect to purchasing, accessing, and retaining 

6 coverage under long-term care insurance poli7 cies (as defined in subsection (d)(2)(D)), in8 cluding a description of the benefits and serv9 ices offered under such policies, the average 

10 premiums for coverage under such policies, the 

11 number of policies sold and at what ages, the 

12 number of policies retained and for how long, 

13 the number of policies for which coverage was 

14 exhausted, and the number of insured individ15 uals who were determined eligible for medical 

16 assistance under the State Medicaid program. 

17 ‘‘(2) DATA.—The reports by issuers of partner18 ship long-term care insurance policies required under 

19 section 1917(b)(1)(C)(iii)(VI) of the Social Security 

20 Act shall include such data as the Secretary shall 

21 specify in order to conduct the analyses required 

22 under paragraph (1). 

23 ‘‘(3) PUBLIC AVAILABILITY.—The Secretary 

24 shall make each report issued under this subsection 


smartinez on PROD1PC64 with BILLS
24 

•S 1177 IS

1 publicly available through the LTC Insurance Com2 pare website required under subsection (d). 

3 ‘‘(4) RULE OF CONSTRUCTION.—Nothing in 

4 this section shall be construed as requiring the Sec5 retary to conduct an independent review of each 

6 long-term care insurance policy offered under or in 

7 connection with such a partnership. 

8 ‘‘(5) APPROPRIATION.—Out of any funds in the 

9 Treasury not otherwise appropriated, there is appro10 priated to the Secretary to carry out this subsection, 

11 $1,000,000 for the period of fiscal years 2010 

12 through 2012.’’. 

13 SEC. 302. ADDITIONAL CONSUMER PROTECTIONS FOR MED14 ICAID PARTNERSHIPS. 

15 (a) APPLICATION OF 2006 MODEL PROVISIONS.— 

16 (1) UPDATING OF 2000 REQUIREMENTS.— 

17 (A) IN GENERAL.—Section 

18 1917(b)(5)(B)(i) of the Social Security Act (42 

19 U.S.C. 1396p(b)(5)(B)(i)) is amended by strik20 ing ‘‘October 2000’’ and inserting ‘‘December 

21 2006’’. 

22 (B) CONFORMING AMENDMENTS.— 

23 (i) Subclause (XVII) of such section is 

24 amended by striking ‘‘section 26’’ and in25 serting ‘‘section 28’’. 


smartinez on PROD1PC64 with BILLS
25 

•S 1177 IS

1 (ii) Subclause (XVIII) of such section 

2 is amended by striking ‘‘section 29’’ and 

3 inserting ‘‘section 31’’. 

4 (iii) Subclause (XIX) of such section 

5 is amended by striking ‘‘section 30’’ and 

6 inserting ‘‘section 32’’. 

7 (2) APPLICATION TO GRANDFATHERED PART8 NERSHIPS.—Section 1917(b)(1)(C)(iv) of such Act 

9 (42 U.S.C. 1396p(b)(1)(C)(iv)) is amended by in10 serting ‘‘, and the State satisfies the requirements of 

11 paragraph (5)’’ after ‘‘2005’’. 

12 (b) APPLICATION OF PRODUCER TRAINING MODEL

13 ACT REQUIREMENTS.—Section 1917(b)(1)(C) of such Act 

14 (42 U.S.C. 1396p(b)(1)(C)) is amended— 

15 (1) in clause (iii)(V), by inserting ‘‘and satisfies 

16 the producer training requirements specified in sec17 tion 9 of the model Act specified in paragraph (5)’’ 

18 after ‘‘coverage of long-term care’’; and 

19 (2) in clause (iv), as amended by subsection 

20 (a)(2), by inserting ‘‘clause (iii)(V) and’’ before 

21 ‘‘paragraph (5)’’. 

22 (c) APPLICATION OF ADDITIONAL REQUIREMENTS

23 FOR ALL PARTNERSHIPS.—Section 1917(b) of the Social 

24 Security Act (42 U.S.C. 1396p(b)) is amended— 

25 (1) in paragraph (1)(C)— 


smartinez on PROD1PC64 with BILLS
26 

•S 1177 IS

1 (A) in clause (iii)— 

2 (i) by inserting after subclause (VII) 

3 the following new subclause: 

4 ‘‘(VIII) The State satisfies the re5 quirements of paragraph (6).’’; and 

6 (ii) in the flush sentence at the end, 

7 by striking ‘‘paragraph (5)’’ and inserting 

8 ‘‘paragraphs (5) and (6)’’; and 

9 (B) in clause (iv), as amended by sub10 sections (a)(2) and (b)(2), by striking ‘‘para11 graph (5)’’ and inserting ‘‘paragraphs (5) and 

12 (6)’’; and 

13 (2) by adding at the end the following new 

14 paragraph: 

15 ‘‘(6) For purposes of clauses (iii)(VIII) and (iv) of 

16 paragraph (1)(C), the requirements of this paragraph are 

17 the following: 

18 ‘‘(A) The State requires issuers of long-term 

19 care insurance policies to— 

20 ‘‘(i) use marketing materials approved by 

21 the State for purposes of the partnership ver22 batim in all sales and marketing activities con23 ducted or supported by the issuers in the State 

24 with respect to any long-term care insurance 

25 policies marketed by the issuer in the State; 


smartinez on PROD1PC64 with BILLS
27 

•S 1177 IS

1 ‘‘(ii) provide such materials to all agents 

2 selling long-term care insurance policies in the 

3 State; 

4 ‘‘(iii) ensure that agent training and edu5 cation courses conducted or supported by the 

6 issuers incorporate such materials; and 

7 ‘‘(iv) make such materials available to any 

8 consumer upon request, and to make such ma9 terials available to all prospective purchasers of 

10 a policy offered under a qualified State long11 term care insurance partnership before submis12 sion of an application for coverage under that 

13 policy. 

14 ‘‘(B) The State requires issuers of long-term 

15 care insurance policies to require agents to use the 

16 inflation protection comparison form developed by 

17 the National Association of Insurance Commis18 sioners in accordance with section 102(b)(1)(C) of 

19 the Confidence in Long-Term Care Insurance Act of 

20 2009 when selling the policies in the State. 

21 ‘‘(C) The State requires issuers of long-term 

22 care insurance policies sold in the State to comply 

23 with the provisions of section 8 of the model Act 

24 specified in paragraph (5) relating to contingent 

25 nonforfeiture benefits. 


smartinez on PROD1PC64 with BILLS
28 

•S 1177 IS

1 ‘‘(D) The State enacts legislation, not later 

2 than January 1, 2012, that establishes rate stability 

3 standards for all issuers of long-term care insurance 

4 policies sold in the State that are no less stringent 

5 than the premium rate schedule increase standards 

6 specified in section 20 of the model regulation speci7 fied in paragraph (5). 

8 ‘‘(E) The State develops, updates whenever 

9 changes are made under the State plan that relate 

10 to eligibility for medical assistance for nursing facil11 ity services or other long-term care services or the 

12 amount, duration, or scope of such assistance, and 

13 provides public, readily accessible materials that de14 scribe in clear, simple language the terms of such 

15 eligibility, the benefits and services provided as such 

16 assistance, and rules relating to adjustment or re17 covery from the estate of an individual who receives 

18 such assistance under the State plan. Such materials 

19 shall include a clear disclosure that medical assist20 ance is not guaranteed to partnership policyholders 

21 who exhaust benefits under a partnership policy, and 

22 that Federal changes to the program under this title 

23 or State changes to the State plan may affect an in24 dividual’s eligibility for, or receipt of, such assist25 ance. 


smartinez on PROD1PC64 with BILLS
29 

•S 1177 IS

1 ‘‘(F) The State— 

2 ‘‘(i) through the State Medicaid agency 

3 under section 1902(a)(5) and in consultation 

4 with the State insurance department, develops 

5 written materials explaining how the benefits 

6 and rules of long-term care policies offered by 

7 issuers participating in the partnership interact 

8 with the benefits and rules under the State plan 

9 under this title; 

10 ‘‘(ii) requires agents to use such materials 

11 when selling or otherwise discussing how long12 term care policies offered by issuers partici13 pating in the partnership work with potential 

14 purchasers and to provide the materials to any 

15 such purchasers upon request; 

16 ‘‘(iii) informs holders of such policies of 

17 any changes in eligibility requirements under 

18 the State plan under this title and of any 

19 changes in estate recovery rules under the State 

20 plan as soon as practicable after such changes 

21 are made; and 

22 ‘‘(iv) agrees to honor the asset protections 

23 of any such policy that were provided under the 

24 policy when purchased, regardless of whether 


smartinez on PROD1PC64 with BILLS
30 

•S 1177 IS

1 the State subsequently terminates a partnership 

2 program under the State plan. 

3 ‘‘(G) The State Medicaid agency under section 

4 1902(a)(5) and the State insurance department 

5 enter into a memorandum of understanding to— 

6 ‘‘(i) inform consumers about changes in 

7 long-term care policies offered by issuers par8 ticipating in the partnership, changes in the 

9 amount, duration, or scope of medical assist10 ance for nursing facility services or other long11 term care services offered under the State plan, 

12 changes in consumer protections, and any other 

13 issues such agency and department determine 

14 appropriate; and 

15 ‘‘(ii) jointly maintain a nonpublic database 

16 of partnership policyholders for purposes of fa17 cilitating coordination in eligibility determina18 tions for medical assistance under the State 

19 plan and the provision of benefits or other serv20 ices under such policies and medical assistance 

21 provided under the State plan that includes— 

22 ‘‘(I) the number of policyholders ap23 plying for medical assistance under the 

24 State plan; and 


smartinez on PROD1PC64 with BILLS
31 

•S 1177 IS

1 ‘‘(II) the number of policyholders 

2 deemed eligible (and, if applicable, ineli3 gible) for such assistance. 

4 ‘‘(H) The State does not apply any limit to the 

5 disregard, for purposes of determining the eligibility 

6 of a partnership policyholder for medical assistance 

7 under the State plan and for purposes of exemption 

8 from the estate recovery requirements under the 

9 plan, of benefits provided under a partnership policy, 

10 including cash benefits provided for long-term care 

11 services, and benefits provided under the policy after 

12 the effective date of the policyholder’s enrollment in 

13 the State plan. 

14 ‘‘(I) The State enters into agreements with 

15 other States that have established qualified State 

16 long-term care insurance partnerships under which 

17 such States agree to provide reciprocity for policy18 holders under such partnerships. 

19 ‘‘(J) The State provides guaranteed asset pro20 tection to all individuals covered under a policy of21 fered under a qualified State long-term care insur22 ance partnership who bought such a policy in the 

23 State or in another State with such a partnership 

24 and with which the State has a reciprocity agree25 ment at the time of purchase. 


smartinez on PROD1PC64 with BILLS
32 

•S 1177 IS

1 ‘‘(K) At the option of the State, notwith2 standing any limitation that would otherwise be im3 posed under subsection (f), the State disregards any 

4 amount of the equity interest in the home of an indi5 vidual covered of policy offered under a qualified 

6 State long-term care insurance partnership for pur7 poses of determining the individual’s eligibility for 

8 medical assistance with respect to nursing facility 

9 services or other long-term care services.’’. 

10 (d) EFFECTIVE DATE.— 

11 (1) IN GENERAL.—Except as provided in para12 graph (2), the amendments made by this section 

13 take effect on the date that is 1 year after the date 

14 of enactment of this Act. 

15 (2) EXTENSION OF EFFECTIVE DATE FOR

16 STATE LAW AMENDMENT.—In the case of a State 

17 plan under title XIX of the Social Security Act (42 

18 U.S.C. 1396 et seq.) which the Secretary of Health 

19 and Human Services determines requires State legis20 lation in order for the plan to meet the additional 

21 requirements imposed by the amendments made by 

22 this section, the State plan shall not be regarded as 

23 failing to comply with the requirements of such title 

24 solely on the basis of its failure to meet these addi25 tional requirements before the first day of the first 


smartinez on PROD1PC64 with BILLS
33 

•S 1177 IS

1 calendar quarter beginning after the close of the 

2 first regular session of the State legislature that be3 gins after the date of enactment of this Act. For 

4 purposes of the previous sentence, in the case of a 

5 State that has a 2-year legislative session, each year 

6 of the session is considered to be a separate regular 

7 session of the State legislature. 

8 SEC. 303. REPORT TO CONGRESS REGARDING NEED FOR 

9 MINIMUM ANNUAL COMPOUND INFLATION 

10 PROTECTION. 

11 Not later than 18 months after the date of enactment 

12 of this Act, the Secretary of Health and Human Services 

13 (in this section referred to as the ‘‘Secretary’’) shall sub14 mit a report to Congress that includes the Secretary’s rec15 ommendation regarding whether legislative or other ad16 ministrative action should be taken to require all long17 term care insurance policies sold after a date determined 

18 by the Secretary in connection with a qualified State long19 term care insurance partnership under clause (iii) of sec20 tion 1917(b)(1)(C) of the Social Security Act (42 U.S.C. 

21 1396p(b)(1)(C)) or a long-term care insurance policy of22 fered in connection with a State plan amendment de23 scribed in clause (iv) of such section, provide, at a min24 imum, 5 percent annual compound inflation protection, 

25 and if so, whether such requirements should be imposed 


smartinez on PROD1PC64 with BILLS
34 

•S 1177 IS

1 on a basis related to the age of the policyholder at the 

2 time of purchase. The Secretary shall include in the report 

3 information on the various levels of inflation protection 

4 available under such long-term care insurance partner5 ships and the methodologies used by issuers of such poli6 cies to calculate and present various inflation protection 

7 options under such policies, including policies with a fu8 ture purchase option feature. 

Æ 


smartinez on PROD1PC64 with BILLS