I
106TH CONGRESS
1ST SESSION
H. R. 161
To amend title XIX of the Social Security Act to restrict imposition of
Medicaid liens and Medicaid estate recovery for long-term care services
in the case of certain individuals who have received benefits under long-
term care insurance policies for at least 3 years, and to amend the
Internal Revenue Code of 1986 to allow the carryover of reimbursement
maximums for flexible spending arrangements, to allow the reimburse-
ment of long-term care insurance premiums by FSA’s, and to repeal
the inclusion in income of long-term care coverage provided through
FSA’s.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 6, 1999
Mr. HILL of Montana (for himself, Mr. PAUL, Mr. GIBBONS, Mr. HUTCH-
INSON, Mrs. CHENOWETH, and Mr. BLUNT) introduced the following bill;
which was referred to the Committee on Ways and Means, and in addi-
tion to the Committee on Commerce, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To amend title XIX of the Social Security Act to restrict
imposition of Medicaid liens and Medicaid estate recovery
for long-term care services in the case of certain individ-
uals who have received benefits under long-term care
insurance policies for at least 3 years, and to amend
the Internal Revenue Code of 1986 to allow the carryover
of reimbursement maximums for flexible spending ar-
rangements, to allow the reimbursement of long-term
care insurance premiums by FSA’s, and to repeal the
inclusion in income of long-term care coverage provided
through FSA’s.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. RESTRICTING MEDICAID LIENS AND MEDICAID
ESTATE RECOVERY FOR LONG-TERM CARE
SERVICES IN THE CASE OF CERTAIN INDIVID-
UALS 
WHO 
HAVE 
RECEIVED 
BENEFITS
UNDER LONG-TERM CARE INSURANCE POLI-
CIES FOR AT LEAST 3 YEARS.
(a) LIMITATION ON LIENS.—Subsection (a) of sec-
tion 1917 of the Social Security Act (42 U.S.C. 1396p)
is amended by adding at the end the following new para-
graph:
‘‘(4) No lien may be imposed under paragraph (1)(B)
on an individual’s home on account of medical assistance
paid with respect to the provision of long-term care serv-
ices (including nursing facility services and home health
care services) if the individual (as of the date of provision
of such services) had received benefits under a qualified
long-term care insurance contract (as defined in section
7702B(b)(1) of the Internal Revenue Code of 1986) for
at least 3 years during the 5-year period ending on such
date.’’.
(b) LIMITATION ON ESTATE RECOVERY.—Subsection
(b) of such section is amended—
(1) in paragraph (1)(C)(i), by inserting ‘‘and
except as provided in paragraph (5)’’ after ‘‘except
as proivded in such clause’’, and
(2) by adding at the end the following new
paragraph:
‘‘(5) A State shall not seek adjustment or recovery
of any medical assistance correctly paid on behalf of an
individual under the State plan under this subsection in
the case of medical assistance for which a lien may not
be imposed under subsection (a)(4).’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to adjustments or recoveries initi-
ated on or after the date of the enactment of this Act.
SEC. 2. TREATMENT OF CARRYOVERS AND LONG-TERM
CARE INSURANCE UNDER FLEXIBLE SPEND-
ING ARRANGEMENTS.
(a) ALLOWANCE OF CARRYOVERS, PERMITTED REIM-
BURSEMENT
OF LONG-TERM CARE INSURANCE PRE-
MIUMS
(AND HEALTH INSURANCE PREMIUMS DURING
UNEMPLOYMENT), AND REPEAL OF INCOME INCLUSION
FOR LONG-TERM CARE INSURANCE.—Subsection (c) of
section 106 of the Internal Revenue Code of 1986 (relat-
ing to inclusion of long-term care benefits provided
through flexible spending arrangements) is amended to
read as follows: