SEC. 302. 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 period of coverage (of not less than
1 year and of not more than 6 years) for long-
term care services specified in the contract.
‘‘(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.
TITLE 
IV—STATE 
PROGRAMS
FOR HOME AND COMMUNITY-
BASED SERVICES FOR INDI-
VIDUALS WITH DISABILITIES
SEC. 401. STATE PROGRAMS FOR HOME AND COMMUNITY-
BASED SERVICES FOR INDIVIDUALS WITH
DISABILITIES.
(a) IN GENERAL.—Each State that has a plan for
the home and community-based services to individuals
with disabilities submitted to and approved by the Sec-
retary under section 402(b) is entitled to payment in ac-
cordance with section 408.
(b) NO INDIVIDUAL ENTITLEMENT ESTABLISHED.—
Nothing in this title shall be construed to create an entitle-
ment for individuals or a requirement that a State with
such an approved plan expend the entire amount of funds
to which it is entitled in any year.
SEC. 402. STATE PLANS.
(a) PLAN REQUIREMENTS.—In order to be approved
under subsection (b), a State plan for home and commu-
nity-based services for individuals with disabilities must
meet the following requirements:
(1) ELIGIBILITY.—
(A) IN
GENERAL.—Within the amounts
provided by the State (and under section 408)
for such plan, the plan shall provide that serv-
ices under the plan will be available to individ-
uals with disabilities (as defined in section
403(a)) in the State who meet the income
standard described in subparagraph (E).
(B) INITIAL SCREENING.—The plan shall
provide a process for the initial screening of in-
dividuals who appear to have some reasonable
likelihood of being an individual with disabil-
ities.
(C) RESTRICTIONS.—The plan may not
limit the eligibility of individuals with disabil-
ities based on—
(i) income (except as provided in sub-
paragraph (E)),
(ii) age,
(iii) geography,
(iv) nature, severity, or category of
disability,
(v) residential setting (other than an
institutional setting), or
(vi) other grounds specified by the
Secretary.
(D) MAINTENANCE OF EFFORT.—The plan
must provide assurances that, in the case of an
individual receiving medical assistance for home
and community-based services under the State
medicaid plan as of the date of the enactment
of this Act, the State will continue to make
available (either under this plan, under the
State medicaid plan, or otherwise) to such indi-
vidual an appropriate level of assistance for
home and community-based services, taking
into account the level of assistance provided as
of such date and the individual’s need for home
and community-based services.
(E) INCOME
LIMITATION.—No individual
shall be provided services under the plan unless