I
103D CONGRESS
1ST SESSION
H. R. 2317
To amend the Internal Revenue Code of 1986 with respect to the treatment
of long-term care insurance policies, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 27, 1993
Mrs. JOHNSON of Connecticut introduced the following bill; which was referred
jointly to the Committees on Ways and Means and Energy and Commerce
A BILL
To amend the Internal Revenue Code of 1986 with respect
to the treatment of long-term care insurance policies,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) IN GENERAL.—This Act may be cited as the
‘‘Long-Term Care Insurance Incentive Act of 1993’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Section 1. Short title; table of contents.
TITLE I—TAX TREATMENT OF LONG-TERM CARE INSURANCE
Sec. 101. Treatment of long-term care insurance or plans.
Sec. 102. Exclusion for benefits provided under long-term care insurance; inclu-
sion of employer-provided coverage.
Sec. 103. Credit for qualified long-term care premiums.
Sec. 104. Qualified long-term services treated as medical care.
Sec. 105. Certain exchanges of life insurance contracts for long-term care in-
surance contracts not taxable.
Sec. 106. Exclusion from gross income for amounts withdrawn from individual
retirement plans or 401(k) plans for long-term care insurance.
Sec. 107. Tax treatment of accelerated death benefits under life insurance con-
tracts.
Sec. 108. Tax treatment of companies issuing qualified accelerated death bene-
fit riders.
Sec. 109. Effective date.
TITLE II—REFUNDABLE TAX CREDIT FOR CERTAIN CUSTODIAL
CARE
Sec. 201. Refundable credit for custodial care of certain dependents in tax-
payer’s home.
TITLE III—PROTECTION OF ASSETS UNDER MEDICAID THROUGH
USE OF QUALIFIED LONG-TERM CARE INSURANCE
Sec. 301. Protection of assets through use of qualified long-term care insur-
ance.
TITLE I—TAX TREATMENT OF
LONG-TERM CARE INSURANCE
SEC. 101. TREATMENT OF LONG-TERM CARE INSURANCE
OR PLANS.
(a) GENERAL RULE.—Subpart E of part I of sub-
chapter L of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after section 818 the follow-
ing new section:
‘‘SEC. 818A. TREATMENT OF LONG-TERM CARE INSURANCE
OR PLANS.
‘‘(a) GENERAL RULE.—For purposes of this part, a
long-term care insurance contract shall be treated as an
accident or health insurance contract.
‘‘(b) LONG-TERM CARE INSURANCE CONTRACT.—
‘‘(1) IN GENERAL.—For purposes of this part,
the term ‘long-term care insurance contract’ means
any insurance contract issued if—
‘‘(A) the only insurance protection pro-
vided under such contract is coverage of quali-
fied long-term care services and benefits inci-
dental to such coverage,
‘‘(B) the maximum benefit under the pol-
icy for expenses incurred for any day does not
exceed $200,
‘‘(C) such contract does not cover expenses
incurred for services or items to the extent that
such expenses are reimbursable under title
XVIII of the Social Security Act or would be so
reimbursable but for the application of a de-
ductible or coinsurance amount,
‘‘(D) such contract is guaranteed renew-
able,
‘‘(E) such contract does not have any cash
surrender value, and
‘‘(F) all refunds of premiums, and all pol-
icyholder dividends or similar amounts, under
such contract are to be applied as a reduction
in future premiums or to increase future bene-
fits.
‘‘(i) which is licensed under State law,
or
‘‘(ii) which is a certified facility for
purposes of title XVIII or XIX of the So-
cial Security Act, or
‘‘(B) an individual’s home if a licensed
health care practitioner certifies that without
home care the individual would have to be cared
for in a facility described in subparagraph (A).
‘‘(4) MAINTENANCE OR PERSONAL CARE SERV-
ICES.—The term ‘maintenance or personal care serv-
ices’ means any care the primary purpose of which
is to provide needed assistance with any of the ac-
tivities of daily living described in paragraph (2)(B).
‘‘(5) 
LICENSED
HEALTH
CARE
PRACTI-
TIONER.—The term ‘licensed health care practi-
tioner’ means any physician (as defined in section
1861(r) of the Social Security Act) and any reg-
istered professional nurse, licensed social worker, or
other individual who meets such requirements as
may be prescribed by the Secretary.
‘‘(d) CONTINUATION COVERAGE EXCISE TAX NOT
TO APPLY.—This section shall not apply in determining
whether section 4980B (relating to failure to satisfy con-
tinuation coverage requirements of group health plans) ap-
plies.
‘‘(e) INFLATION ADJUSTMENT
OF $200 BENEFIT
LIMIT.—
‘‘(1) IN GENERAL.—In the case of a calendar
year after 1994, the $200 amount contained in sub-
section (b)(1)(B) shall be increased for such cal-
endar year by the medical care cost adjustment for
such calendar year. If any increase determined
under the preceding sentence is not a multiple of
$10, such increase shall be rounded to the nearest
multiple of $10.
‘‘(2) MEDICAL CARE COST ADJUSTMENT.—For
purposes of paragraph (1), the medical care cost ad-
justment for any calendar year is the percentage (if
any) by which—
‘‘(A) the medical care component of the
Consumer Price Index (as defined in section
1(f)(5)) for August of the preceding calendar
year, exceeds
‘‘(B) such component for August of 1993.’’
(b) CLERICAL AMENDMENT.—The table of sections
for such subpart E is amended by inserting after the item
relating to section 818 the following new item:
‘‘Sec. 818A. Treatment of long-term care insurance or plans.’’
SEC. 102. EXCLUSION FOR BENEFITS PROVIDED UNDER
LONG-TERM CARE INSURANCE; INCLUSION
OF EMPLOYER-PROVIDED COVERAGE.
(a) IN GENERAL.—Subsection (a) of section 104 of
the Internal Revenue Code of 1986 (relating to compensa-
tion for injuries or sickness) is amended by striking ‘‘and’’
at the end of paragraph (4), by striking the period at the
end of paragraph (5) and inserting ‘‘, and’’, and by insert-
ing after paragraph (4) the following new paragraph:
‘‘(6) benefits under a long-term care insurance
contract (as defined in section 818A(b)).’’
(b) INCLUSION
OF
EMPLOYER-PROVIDED
COV-
ERAGE.—Section 106 of such Code (relating to contribu-
tions by employer to accident and health plans) is amend-
ed by adding at the end thereof the following sentence:
‘‘The preceding sentence shall not apply to any plan pro-
viding coverage for long-term care services.’’
SEC. 103. CREDIT FOR QUALIFIED LONG-TERM CARE PRE-
MIUMS.
(a) GENERAL RULE.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to refundable credits) is amended by redes-
ignating section 35 as section 36 and by inserting after
section 34 the following new section:
‘‘SEC. 35. LONG-TERM CARE INSURANCE CREDIT.
‘‘(a) GENERAL RULE.—In the case of an individual,
there shall be allowed as a credit against the tax imposed
by this subtitle for the taxable year an amount equal to
the applicable percentage of the eligible long-term care
premiums paid during such taxable year for such individ-
ual or the spouse of such individual.
‘‘(b) APPLICABLE PERCENTAGE.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘applicable percentage’ means 31 per-
cent reduced (but not below zero) by 1 percentage
point for each $1,000 (or fraction thereof) by which
the taxpayer’s adjusted gross income for the taxable
year exceeds the base amount.
‘‘(2) BASE
AMOUNT.—For purposes of para-
graph (1), the term ‘base amount’ means—
‘‘(A) except as otherwise provided in this
paragraph, $25,000,
‘‘(B) $40,000 in the case of joint return,
and
‘‘(C) zero in the case of a taxpayer who—
‘‘(i) is married at the close of the tax-
able year (within the meaning of section
7703) but does not file a joint return for
such taxable year, and
‘‘(ii) does not live apart from his or
her spouse at all times during the taxable
year.
‘‘(c) ELIGIBLE LONG-TERM CARE PREMIUMS.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘eligible long-term care premiums’
means the amount paid during a taxable year for
any long-term care insurance contract (as defined in
section 818A) covering an individual, to the extent
such amount does not exceed the limitation deter-
mined under the following table:
‘‘In the case of an individual
with an attained age before the
The limitation
close of the taxable year of:
is:
40 or less ...........................................................................
$200
More than 40 but not more than 50 ................................
375
More than 50 but not more than 60 ................................
750
More than 60 but not more than 70 ................................
1,600
More than 70 ....................................................................
2,000.
‘‘(2) INDEXING.—
‘‘(A) IN
GENERAL.—In the case of any
taxable year beginning in a calendar year after
1993, each dollar amount contained in para-
graph (1) shall be increased by the medical care
cost adjustment of such amount for such cal-
endar year. If any increase determined under
the preceding sentence is not a multiple of $10,
such increase shall be rounded to the nearest
multiple of $10.
‘‘(B) 
MEDICAL
CARE
COST
ADJUST-
MENT.—For purposes of subparagraph (A), the
medical care cost adjustment for any calendar
year is the percentage (if any) by which—
‘‘(i) the medical care component of
the Consumer Price Index (as defined in
section 1(f)(5)) for August of the preced-
ing calendar year, exceeds
‘‘(ii) such component for August of
1991.
‘‘(d) COORDINATION WITH MEDICAL EXPENSE DE-
DUCTION.—Any amount allowed as a credit under this
section shall not be taken into account under section 213.’’
(b) CLERICAL AMENDMENT.—The table of sections
for subpart C of part IV of subchapter A of chapter 1
of such Code is amended by striking the item relating to
section 35 and inserting the following:
‘‘Sec. 35. Long-term care insurance credit.
‘‘Sec. 36. Overpayments of tax.’’
SEC. 104. QUALIFIED LONG-TERM SERVICES TREATED AS
MEDICAL CARE.
(a) GENERAL RULE.—Paragraph (1) of section
213(d) of the Internal Revenue Code of 1986 (defining
medical care) is amended by striking ‘‘or’’ at the end of
subparagraph (B), by redesignating subparagraph (C) as
subparagraph (D), and by inserting after subparagraph
(B) the following new subparagraph:
‘‘(C) for qualified long-term care services
(as defined in section 818A(c)), or’’.
(b) DEDUCTION FOR LONG-TERM CARE EXPENSES
FOR PARENT OR GRANDPARENT.—Section 213 of such
Code (relating to deduction for medical expenses) is
amended by adding at the end the following new sub-
section:
‘‘(g) SPECIAL RULE FOR CERTAIN LONG-TERM CARE
EXPENSES.—For purposes of subsection (a), the term ‘de-
pendent’ shall include any parent or grandparent of the
taxpayer for whom the taxpayer has expenses for long-
term care services described in section 818A(c), but only
to the extent of such expenses.’’
(c) TECHNICAL AMENDMENTS.—
(1) Subparagraph (D) of section 213(d)(1) of
such Code (as redesignated by subsection (a)) is
amended by striking ‘‘subparagraphs (A) and (B)’’
and inserting ‘‘subparagraphs (A), (B), and (C)’’.
(2) Paragraph (1) of section 213(d) of such
Code is amended by adding at the end thereof the
following new flush sentence:
‘‘In the case of a long-term care insurance contract
(as defined in section 818A), only eligible long-term
care premiums (as defined in section 35(c)) shall be
taken into account under subparagraph (D).’’
(3) Paragraph (6) of section 213(d) of such
Code is amended—
(A) by striking ‘‘subparagraphs (A) and
(B)’’ and inserting ‘‘subparagraphs (A), (B),
and (C)’’, and
(B) by striking ‘‘paragraph (1)(C)’’ in sub-
paragraph 
(A) 
and 
inserting 
‘‘paragraph
(1)(D)’’.
(4) Paragraph (7) of section 213(d) of such
Code is amended by striking ‘‘subparagraphs (A)
and (B)’’ and inserting ‘‘subparagraphs (A), (B),
and (C)’’.
SEC. 105. CERTAIN EXCHANGES OF LIFE INSURANCE CON-
TRACTS FOR LONG-TERM CARE INSURANCE
CONTRACTS NOT TAXABLE.
Subsection (a) of section 1035 of the Internal Reve-
nue Code of 1986 (relating to certain exchanges of insur-
ance contracts) is amended by striking the period at the
end of paragraph (3) and inserting ‘‘; or’’, and by adding
at the end thereof the following new paragraph:
‘‘(4) a contract of life insurance or an endow-
ment or annuity contract for a long-term care insur-
ance contract (as defined in section 818A).’’
SEC. 106. EXCLUSION FROM GROSS INCOME FOR AMOUNTS
WITHDRAWN 
FROM 
INDIVIDUAL 
RETIRE-
MENT PLANS OR 401(k) PLANS FOR LONG-
TERM CARE INSURANCE.
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
items specifically excluded from gross income) is amended
by redesignating section 137 as section 138 and by insert-
ing after section 136 the following new section:
‘‘SEC. 137. DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT
ACCOUNTS AND SECTION 401(k) PLANS FOR
LONG-TERM CARE INSURANCE.
‘‘(a) GENERAL RULE.—The amount includible in the
gross income of an individual for the taxable year by rea-
son of qualified distributions during such taxable year
shall not exceed the excess of—
‘‘(1) the amount which would (but for this sec-
tion) be so includible by reason of such distributions,
over
‘‘(2) the aggregate premiums paid by such indi-
vidual during such taxable year for any long-term
care insurance contract (as defined in section 818A)
for the benefit of such individual or the spouse of
such individual.
‘‘(b) QUALIFIED DISTRIBUTION.—For purposes of
this section, the term ‘qualified distribution’ means any
distribution to an individual from an individual retirement
account or a section 401(k) plan if such individual has
attained age 591⁄2 on or before the date of the distribution
(and, in the case of a distribution used to pay premiums
for the benefit of the spouse of such individual, such
spouse has attained age 591⁄2 on or before the date of the
distribution).
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) INDIVIDUAL RETIREMENT ACCOUNT.—The
term ‘individual retirement account’ has the mean-
ing given such term by section 408(a).
‘‘(2) SECTION 401(k) PLAN.—The term ‘section
401(k) plan’ means any employer plan which meets
the requirements of section 401(a) and which in-
cludes a qualified cash or deferred arrangement (as
defined in section 401(k)).
‘‘(d) SPECIAL RULES FOR SECTION 401(k) PLANS.—
‘‘(1) WITHDRAWALS
CANNOT
EXCEED
ELEC-
TIVE CONTRIBUTIONS UNDER QUALIFIED CASH OR
DEFERRED ARRANGEMENT.—This section shall not
apply to any distribution from a section 401(k) plan
to the extent the aggregate amount of such distribu-
tions for the use described in subsection (a) exceeds
the aggregate employer contributions made pursuant
to the employee’s election under section 401(k)(2).
‘‘(2) WITHDRAWALS NOT TO CAUSE DISQUALI-
FICATION.—A plan shall not be treated as failing to
satisfy the requirements of section 401, and an ar-
rangement shall not be treated as failing to be a
qualified cash or deferred arrangement (as defined
in section 401(k)(2)), merely because under the plan
or arrangement distributions are permitted which
are excludable from gross income by reason of this
section.’’
(b) CONFORMING AMENDMENTS.—
(1) Section 401(k) of such Code is amended by
adding at the end the following new paragraph:
‘‘(11) CROSS REFERENCE.—
‘‘For provision permitting tax-free withdrawals
for payment of long-term care premiums, see section
137.’’
(2) Section 408(d) of such Code is amended by
adding at the end the following new paragraph:
‘‘(8) CROSS REFERENCE.—
‘‘For provision permitting tax-free withdrawals
from individual retirement accounts for payment of
long-term care premiums, see section 137.’’
(3) The table of sections for such part III is
amended by striking the last item and inserting the
following new items:
‘‘Sec. 137. Distributions from individual retirement accounts and
section 401(k) plans for long-term care insurance.
‘‘Sec. 138. Cross references to other Acts.’’
SEC. 107. TAX TREATMENT OF ACCELERATED DEATH BENE-
FITS UNDER LIFE INSURANCE CONTRACTS.
Section 101 of the Internal Revenue Code of 1986
(relating to certain death benefits) is amended by adding
at the end thereof the following new subsection:
‘‘(g) TREATMENT
OF
CERTAIN
ACCELERATED
DEATH BENEFITS.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, any amount paid or advanced to an individual
under a life insurance contract on the life of an in-
sured—
‘‘(A) who is a terminally ill individual, or
‘‘(B) who is a chronically ill individual (as
defined in section 818A(c)(2)) who is confined
to a qualified facility (as defined in section
818A(c)(3)(A)),
shall be treated as an amount paid by reason of the
death of such insured.
‘‘(2) TERMINALLY ILL INDIVIDUAL.—For pur-
poses of this subsection, the term ‘terminally ill indi-
vidual’ means an individual who has been certified
by a physician as having an illness or physical condi-
tion which can reasonably be expected to result in
death in 12 months or less.
‘‘(3) PHYSICIAN.—For purposes of this sub-
section, the term ‘physician’ has the meaning given
to such term by section 213(d)(4).’’
SEC. 108. TAX TREATMENT OF COMPANIES ISSUING QUALI-
FIED ACCELERATED DEATH BENEFIT RID-
ERS.
(a) QUALIFIED ACCELERATED DEATH BENEFIT RID-
ERS TREATED AS LIFE INSURANCE.—Section 818 of the
Internal Revenue Code of 1986 (relating to other defini-
tions and special rules) is amended by adding at the end
thereof the following new subsection:
‘‘(g) QUALIFIED ACCELERATED DEATH BENEFIT
RIDERS TREATED AS LIFE INSURANCE.—For purposes of
this part—
‘‘(1) IN GENERAL.—Any reference to a life in-
surance contract shall be treated as including a ref-
erence to a qualified accelerated death benefit rider
on such contract.
‘‘(2) QUALIFIED ACCELERATED DEATH BENE-
FIT RIDERS.—For purposes of this subsection, the
term ‘qualified accelerated death benefit rider’
means any rider or addendum on, or other provision
of a life insurance contract which provides for pay-
ments to an individual on the life of an insured upon
such insured—
‘‘(A) becoming a terminally ill individual
(as defined in section 101(g)(2)), or
‘‘(B) becoming a chronically ill individual
(as defined in section 818A(c)(2)) who is con-
fined to a qualified facility (as defined in sec-
tion 818A(c)(3)(A)).’’
(b) DEFINITIONS OF LIFE INSURANCE AND MODI-
FIED ENDOWMENT CONTRACTS.—
(1) RIDER
TREATED
AS
QUALIFIED
ADDI-
TIONAL
BENEFIT.—Paragraph (5)(A) of section
7702(f) of such Code is amended by striking ‘‘or’’
at the end of clause (iv), by redesignating clause (v)
as clause (vi), and by inserting after clause (iv) the
following new clause:
‘‘(v) any qualified accelerated death
benefit 
rider 
(as 
defined 
in 
section
818(g)(2)) or any long-term care insurance
contract rider which reduces the death
benefit, or’’.
(2) TRANSITIONAL RULE.—For purposes of ap-
plying section 7702 or 7702A of the Internal Reve-
nue Code of 1986 to any contract (or determining
whether either such section applies to such con-
tract), the issuance of a rider or addendum on, or
other provision of, a life insurance contract permit-
ting the acceleration of death benefits (as described
in section 101(g) of such Code) or payments for
qualified long-term care services (as defined in sec-
tion 818A of such Code) shall not be treated as a
modification or material change of such contract.
SEC. 109. EFFECTIVE DATE.
The amendments made by this title shall apply to tax-
able years beginning after December 31, 1993.
TITLE 
II—REFUNDABLE 
TAX
CREDIT FOR CERTAIN CUSTO-
DIAL CARE
SEC. 201. REFUNDABLE CREDIT FOR CUSTODIAL CARE OF
CERTAIN 
DEPENDENTS 
IN 
TAXPAYER’S
HOME.
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to refundable credits), as amended by sec-
tion 103 of this Act, is amended by redesignating section
36 as section 37 and by inserting after section 35 the fol-
lowing new section:
‘‘SEC. 36. CREDIT FOR TAXPAYERS WITH CERTAIN PERSONS
REQUIRING 
CUSTODIAL 
CARE 
IN 
THEIR
HOUSEHOLDS.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual who maintains a household which includes as a
member one or more qualified persons, there shall be al-
lowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to $2,000 for each
such person.
‘‘(b) QUALIFIED PERSON DEFINED.—For purposes
of this section, the term ‘qualified person’ means any indi-
vidual—
‘‘(1) who is a dependent (as defined in section
152) or spouse of the taxpayer,
‘‘(2) who is a chronically ill individual (within
the meaning of section 818A(c)(2)), and
‘‘(3) who has as his principal place of abode for
more than half of the taxable year the home of the
taxpayer.
‘‘(c) SPECIAL RULES.—For purposes of this sec-
tion—
‘‘(1) MAINTAINING A HOUSEHOLD.—An individ-
ual shall be treated as maintaining a household for
any period if over half the cost of maintaining the
household for such period is furnished by such indi-
vidual (or, if such individual is married during such
period, by such individual and his spouse).
‘‘(2) MARRIED COUPLES MUST FILE JOINT RE-
TURN.—If the taxpayer is married at the close of
the taxable year, the credit under subsection (a)
shall be allowed only if the taxpayer and his spouse
file a joint return for the taxable year.
‘‘(3) MARITAL STATUS.—An individual legally
separated from his spouse under a decree of divorce
or separate maintenance shall not be considered as
married.
‘‘(4) CERTAIN
MARRIED
INDIVIDUALS
LIVING
APART.—If—
‘‘(A) an individual who is married and who
files a separate return—
‘‘(i) maintains a household which in-
cludes as a member one or more qualified
persons, and
‘‘(ii) furnishes over half of the cost of
maintaining such household during such
taxable year, and
‘‘(B) during the last 6 months of such tax-
able year such individual’s spouse is not a mem-
ber of such household,
such individual shall not be considered as married.
‘‘(d) REGULATIONS.—The Secretary shall prescribe
such regulations as may be necessary to carry out the pur-
poses of this section.’’
(b) CLERICAL AMENDMENT.—The table of sections
for subpart C of part IV of subchapter A of chapter 1
of such Code is amended by striking the item relating to
section 36 and inserting the following:
‘‘Sec. 36. Credit for taxpayers with certain persons requiring cus-
todial care in their households.
‘‘Sec. 37. Overpayments of tax.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1993.
TITLE III—PROTECTION OF AS-
SETS 
UNDER 
MEDICAID
THROUGH USE OF QUALIFIED
LONG-TERM 
CARE 
INSUR-
ANCE
SEC. 301. PROTECTION OF ASSETS THROUGH USE OF
QUALIFIED LONG-TERM CARE INSURANCE.
(a) IN GENERAL.—Title XIX of the Social Security
Act is amended by adding at the end the following new
section:
‘‘SPECIAL RULES FOR ASSET DISREGARD IN THE CASE OF
QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS
‘‘SEC. 1931. (a) IN GENERAL.—Each State plan
under this title, as a condition for the receipt of payment
under section 1903(a) with respect to long-term care serv-
ices (as defined in subsection (c)(1)), shall provide that
in determining the eligibility of an individual for medical
assistance under the plan with respect to such services
there shall be disregarded some or all of the individual’s
assets which are attributable (as determined under sub-
section (c)(2)) to coverage under a qualified long-term
care insurance contract (as defined in subsection (b)).
‘‘(b) QUALIFIED
LONG-TERM
CARE
INSURANCE
CONTRACT DEFINED.—In this section, the term ‘qualified
long-term care insurance contract’ means, with respect to
a State, a long-term care insurance contract (as defined
in section 818A(b) of the Internal Revenue Code of 1986)
which—
‘‘(1) provides such protection against the costs
of receiving long-term care services as the State may
require by law;
‘‘(2) provides that benefits under the contract
shall be paid without regard to eligibility for medical
assistance under this title; and
‘‘(3) meets such other requirements (such as re-
quirements relating to premiums, disclosure, mini-
mum benefits, rights of conversion, and standards
for claims processing) as the State may determine to
be appropriate.
‘‘(c) OTHER DEFINITIONS.—In this section:
‘‘(1) LONG-TERM CARE SERVICES.—The term
‘long-term care services’ means nursing facility serv-
ices, home health care services, and home and com-
munity-based services, and includes such other simi-
lar items and services described in section 1905(a)
as a State may specify.
‘‘(2) ATTRIBUTION RULES.—An individual’s as-
sets are considered to be ‘attributable’ to a qualified
long-term care insurance contract to the extent spec-
ified under the State plan. Such a plan shall provide
for at least one of the following:
‘‘(A) All assets are considered attributable
if the insurance contract provides coverage for
at least a specified period of coverage (of not
less than 3 years and of not more than 6 years)
for long-term care services.
‘‘(B) An amount of assets, up to the dollar
limitation on benefits for long-term care serv-
ices under the contract, is considered attrib-
utable to the contract.’’.
(b) 
CONFORMING
AMENDMENT.—Section
1902(a)(17)(A) of such Act (42 U.S.C. 1396a(a)(17)(A))
is amended by inserting ‘‘and section 1931’’ after ‘‘objec-
tives of this title’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply (except as provided under
paragraph (2)) to payments to States under title
XIX of the Social Security Act for calendar quarters
beginning on or after one year after the date of the
enactment of this Act, without regard to whether
regulations to implement such amendment are pro-
mulgated by such date.
(2) DELAY PERMITTED IF STATE LEGISLATION
REQUIRED.—In the case of a State plan for medical
assistance under title XIX of the Social Security Act
which the Secretary of Health and Human Services
determines requires State legislation (other than leg-
islation authorizing or appropriating funds) in order
for the plan to meet the additional requirements im-
posed by the amendments made by 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 require-
ments before the first day of the first calendar quar-
ter beginning after the close of the first regular ses-
sion 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 such session
shall be deemed to be a separate regular session of
the State legislature.
Æ
HR 2317 IH——2