[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6405 Introduced in House (IH)]







109th CONGRESS
  2d Session
                                H. R. 6405

                       To improve long-term care.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            December 6, 2006

  Mrs. Wilson of New Mexico introduced the following bill; which was 
  referred to the Committee on Ways and Means, and in addition to the 
   Committee on Energy and Commerce, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL



                       To improve long-term care.

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

                     TITLE I--SHORT TITLE; FINDINGS

SECTION 101. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Long-Term Care 
Improvement Act of 2006''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

                     TITLE I--SHORT TITLE; FINDINGS

Sec. 101. Short title; table of contents.
Sec. 102. Findings.
                   TITLE II--LONG-TERM CARE FINANCING

Sec. 201. Long-term care awareness.
Sec. 202. Long-term care financing commission.
Sec. 203. Considerations in MedPAC recommendations on payment for 
                            skilled nursing facilities.
                  TITLE III--LONG-TERM CARE INSURANCE

Sec. 301. Treatment of premiums on qualified long-term care insurance 
                            contracts.
Sec. 302. Additional consumer protections for long-term care insurance.
                   TITLE IV--MISCELLANEOUS PROVISIONS

Sec. 401. Elimination of limitation on eligibility for supplemental 
                            security income benefits for persons living 
                            in publicly operated community residences, 
                            based on the number of residents served by 
                            the facility.

SEC. 102. FINDINGS.

    The Congress finds the following:
            (1) The United States needs a national strategy for long-
        term care.
            (2) Seventy-seven million baby-boomers will retire by 2030.
            (3) Long-term care is an ever-increasing proportion of 
        Medicaid spending.
            (4) Encouraging planning, saving, and personal 
        responsibility will strengthen the Medicaid program for other 
        eligible populations.
            (5) Thirty-two percent of Medicaid spending is on long-term 
        care and that number is expected to increase over the next 20 
        years as baby-boomers begin to retire.
            (6) Four-fifths of projected increases in Medicaid 
        expenditures are estimated to come from the aged and disabled, 
        who primarily have chronic diseases and are in need of long-
        term care services.
            (7) The United States as a whole must get more private 
        dollars into the long-term care system, or else be saddled by 
        skyrocketing costs to the government that risk the collapse of 
        Medicaid.

                   TITLE II--LONG-TERM CARE FINANCING

SEC. 201. LONG-TERM CARE AWARENESS.

    (a) ``Own Your Own Future'' Long-Term Care Awareness Campaign.--It 
is the sense of the Congress that--
            (1) the ``Own Your Own Future'' long-term care awareness 
        campaign established jointly in January 2005, and implemented 
        in 8 states in 2006, by Office of the Assistant Secretary for 
        Planning and Evaluation, the Administration on Aging, and the 
        Centers for Medicare & Medicaid Services (CMS), working closely 
        with the National Governors Association (NGA) and the National 
        Council of State Legislators, should be expanded and 
        implemented in all the States, and
            (2) as part of such campaign, the Administration on Aging 
        should distribute, upon request, the document entitled ``Long-
        Term Care Planning Kit'', originally published by the 
        Department Health and Human Services as publication CMS-11026 
        (December 2002) and as updated from time to time.
    (b) ``Day for a National Conversation on Long-Term Care''.--
            (1) Designation and promotion.--From among the holidays 
        when families normally gather together, the Secretary of Health 
        and Human Services shall designate 1 particular day each year 
        as the ``Day for a National Conversation on Long-Term Care'' 
        and shall provide public announcements and activities to 
        encourage and facilitate the opportunities for families to 
        discuss aging and retirement preparation with family members 
        who are older individuals.
            (2) Authorization of appropriations.--There is authorized 
        to be appropriated $2,000,000 fore each of 5 fiscal years to 
        carry out this subsection.

SEC. 202. LONG-TERM CARE FINANCING COMMISSION.

    (a) Establishment.--There is hereby established a commission to be 
known as the ``Long-Term Care Financing Commission'' (in this section 
referred to as the ``Commission'').
    (b) Composition.--The Commission shall be composed of 10 members 
appointed by the Comptroller General of the United States.
    (c) Duties.--
            (1) Analyses.--The Commission shall conduct analyses of the 
        financing of long-term care, including the financing of nursing 
        facilities. Such analyses shall include an analysis of each of 
        the following:
                    (A) The adequacy of Medicaid program financing of 
                the long term care system.
                    (B) Medicare's cross-subsidization of long-term 
                care for Medicaid patients.
                    (C) Total industry margins in long-term care.
                    (D) Long-term demographic challenges.
                    (E) The impact of current trends, including 
                staffing shortages and litigation costs, on long-term 
                care spending.
                    (F) Different approaches to refinements in the per 
                diem RUG payment amounts and related payment 
                methodologies under section 1888(e) of the Social 
                Security Act (42 U.S.C. 1395yy(e)) .
            (2) Report.--The Commission shall submit to Congress an 
        annual report on its analyses. Each such report shall include 
        recommendations for such changes in financing of long-term care 
        as the Commission deems appropriate.
    (d) Terms, Compensation, Chairman, Meetings, Staff, and Powers.--
The provisions of subsections (c)(3), (c)(4), (c)(5), (c)(6), (d), and 
(e) of section 1805 of the Social Security Act (42 U.S.C. 1395b-6) 
(relating to provisions for the Medicare Payment Advisory Commission) 
shall apply to the Commission in the same manner as they apply to the 
Medicare Payment Advisory Commission.

SEC. 203. CONSIDERATIONS IN MEDPAC RECOMMENDATIONS ON PAYMENT FOR 
              SKILLED NURSING FACILITIES.

    In making recommendations regarding payment rates for skilled 
nursing facilities, the Medicare Payment Advisory Commission 
(established under section 1805 of the Social Security Act, (42 U.S.C. 
1395b-6)) shall consider--
            (1) the operating margins of such facilities from all 
        government payers and the adequacy of all government funding; 
        and
            (2) the quality improvement efforts by such facilities.

                  TITLE III--LONG-TERM CARE INSURANCE

SEC. 301. TREATMENT OF PREMIUMS ON QUALIFIED LONG-TERM CARE INSURANCE 
              CONTRACTS.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to additional itemized 
deductions) is amended by redesignating section 224 as section 225 and 
by inserting after section 223 the following new section:

``SEC. 224. PREMIUMS ON QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a deduction an amount equal to the applicable percentage of 
the amount of eligible long-term care premiums (as defined in section 
213(d)(10)) paid during the taxable year for coverage for the taxpayer 
and the taxpayer's spouse and dependents under a qualified long-term 
care insurance contract (as defined in section 7702B(b)).
    ``(b) Applicable Percentage.--For purposes of subsection (a), the 
applicable percentage shall be determined in accordance with the 
following table:


 
                                                                 The
                                                              applicable
      ``For taxable years beginning in calendar year--        percentage
                                                                 is--
 
2006, 2007, or 2008........................................           25
2009.......................................................           35
2010.......................................................           65
2011 or thereafter.........................................         100.

    ``(c) Coordination With Other Deductions.--Any amount paid by a 
taxpayer for any qualified long-term care insurance contract to which 
subsection (a) applies shall not be taken into account in computing the 
amount allowable to the taxpayer as a deduction under section 162(l) or 
213(a).''.
    (b) Long-Term Care Insurance Permitted To Be Offered Under 
Cafeteria Plans and Flexible Spending Arrangements.--
            (1) Cafeteria plans.--The last sentence of section 125(f) 
        of such Code (defining qualified benefits) is amended by 
        inserting before the period at the end ``; except that such 
        term shall include the payment of premiums for any qualified 
        long-term care insurance contract (as defined in section 7702B) 
        to the extent the amount of such payment does not exceed the 
        eligible long-term care premiums (as defined in section 
        213(d)(10)) for such contract''.
            (2) Flexible spending arrangements.--Section 106 of such 
        Code (relating to contributions by an employer to accident and 
        health plans) is amended by striking subsection (c) and 
        redesignating subsection (d) as subsection (c).
    (c) Conforming Amendments.--
            (1) Section 62(a) of such Code is amended by inserting 
        before the last sentence at the end the following new 
        paragraph:
            ``(21) Premiums on qualified long-term care insurance 
        contracts.--The deduction allowed by section 224.''.
            (2) Sections 223(b)(4)(B), 223(d)(4)(C), 223(f)(3)(B), 
        3231(e)(11), 3306(b)(18), 3401(a)(22), 4973(g)(1), and 
        4973(g)(2)(B)(i) of such Code are each amended by striking 
        ``section 106(d)'' and inserting ``section 106(c)''.
            (3) Section 6041 of such Code is amended--
                    (A) in subsection (f)(1) by striking ``(as defined 
                in section 106(c)(2))'', and
                    (B) by adding at the end the following new 
                subsection:
    ``(h) Flexible Spending Arrangement Defined.--For purposes of this 
section, a flexible spending arrangement is a benefit program which 
provides employees with coverage under which--
            ``(1) specified incurred expenses may be reimbursed 
        (subject to reimbursement maximums and other reasonable 
        conditions), and
            ``(2) the maximum amount of reimbursement which is 
        reasonably available to a participant for such coverage is less 
        than 500 percent of the value of such coverage.
In the case of an insured plan, the maximum amount reasonably available 
shall be determined on the basis of the underlying coverage.''.
            (4) The table of sections for part VII of subchapter B of 
        chapter 1 of such Code is amended by striking the last item and 
        inserting the following new items:

``Sec. 224. Premiums on qualified long-term care insurance contracts.
``Sec. 225. Cross reference.''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 2005.
            (2) Cafeteria plans and flexible spending arrangements.--
        The amendments made by subsection (b) shall apply to taxable 
        years beginning after December 31, 2007.

SEC. 302. ADDITIONAL CONSUMER PROTECTIONS FOR LONG-TERM CARE INSURANCE.

    (a) Additional Protections Applicable to Long-Term Care 
Insurance.--Subparagraphs (A) and (B) of section 7702B(g)(2) of the 
Internal Revenue Code of 1986 (relating to requirements of model 
regulation and Act) are amended to read as follows:
                    ``(A) In general.--The requirements of this 
                paragraph are met with respect to any contract if such 
                contract meets--
                            ``(i) Model regulation.--The following 
                        requirements of the model regulation:
                                    ``(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 11 (relating to 
                                prohibitions against post-claims 
                                underwriting).
                                    ``(IX) Section 12 (relating to 
                                minimum standards).
                                    ``(X) Section 13 (relating to 
                                requirement to offer inflation 
                                protection).
                                    ``(XI) Section 25 (relating to 
                                prohibition against preexisting 
                                conditions and probationary periods in 
                                replacement policies or certificates).
                            ``(ii) Model act.--The following 
                        requirements of the model Act:
                                    ``(I) Section 6C (relating to 
                                preexisting conditions).
                                    ``(II) Section 6D (relating to 
                                prior hospitalization).
                    ``(B) Definitions.--For purposes of this 
                paragraph--
                            ``(i) Model provisions.--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) Coordination.--Any provision of the 
                        model regulation or model Act listed under 
                        clause (i) or (ii) of subparagraph (A) shall be 
                        treated as including any other provision of 
                        such regulation or Act necessary to implement 
                        the provision.
                            ``(iii) Determination.--For purposes of 
                        this section and section 4980C, the 
                        determination of whether any requirement of a 
                        model regulation or the model Act has been met 
                        shall be made by the Secretary.''.
    (b) Excise Tax.--Paragraph (1) of section 4980C(c) of the Internal 
Revenue Code of 1986 (relating to requirements of model provisions) is 
amended to read as follows:
            ``(1) Requirements of model provisions.--
                    ``(A) Model regulation.--The following requirements 
                of the model regulation must be met:
                            ``(i) Section 9 (relating to required 
                        disclosure of rating practices to consumer).
                            ``(ii) Section 14 (relating to application 
                        forms and replacement coverage).
                            ``(iii) Section 15 (relating to reporting 
                        requirements).
                            ``(iv) Section 22 (relating to filing 
                        requirements for marketing).
                            ``(v) Section 23 (relating to standards for 
                        marketing), including inaccurate completion of 
                        medical histories, other than paragraphs (1), 
                        (6), and (9) of section 23C.
                            ``(vi) Section 24 (relating to 
                        suitability).
                            ``(vii) Section 29 (relating to standard 
                        format outline of coverage).
                            ``(viii) Section 30 (relating to 
                        requirement to deliver shopper's guide).
                The requirements referred to in clause (vi) shall not 
                include those portions of the personal worksheet 
                described in Appendix B relating to consumer protection 
                requirements not imposed by section 4980C or 7702B.
                    ``(B) Model act.--The following requirements of the 
                model Act must be met:
                            ``(i) Section 6F (relating to right to 
                        return).
                            ``(ii) Section 6G (relating to outline of 
                        coverage).
                            ``(iii) Section 6H (relating to 
                        requirements for certificates under group 
                        plans).
                            ``(iv) Section 6J (relating to policy 
                        summary).
                            ``(v) Section 6K (relating to monthly 
                        reports on accelerated death benefits).
                            ``(vi) Section 7 (relating to 
                        incontestability period).
                    ``(C) Definitions.--For purposes of this paragraph, 
                the terms `model regulation' and `model Act' have the 
                meanings given such terms by section 7702B(g)(2)(B).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to policies issued more than 1 year after the date of the 
enactment of this Act.

                   TITLE IV--MISCELLANEOUS PROVISIONS

SEC. 401. ELIMINATION OF LIMITATION ON ELIGIBILITY FOR SUPPLEMENTAL 
              SECURITY INCOME BENEFITS FOR PERSONS LIVING IN PUBLICLY 
              OPERATED COMMUNITY RESIDENCES, BASED ON THE NUMBER OF 
              RESIDENTS SERVED BY THE FACILITY.

    (a) In General.--Section 1611 of the Social Security Act (42 U.S.C. 
1382) is amended--
            (1) in subsection (e)(1), by striking subparagraph (C) and 
        redesignating subparagraphs (D) through (J) as subparagraphs 
        (C) through (I), respectively; and
            (2) in subparagraph (A), by striking ``(E), and (G)'' and 
        inserting ``and (F)'';
            (3) in subparagraph (B)--
                    (A) by striking ``(G)'' and inserting ``(F)''; and
                    (B) by striking ``(E)'' and inserting ``(D)'';
            (4) in subparagraph (E) (as so redesignated), by striking 
        ``(E)'' and inserting ``(D)'';
            (5) in subparagraph (F) (as so redesignated), by striking 
        ``(H) or (J)'' and inserting ``(G) or (I)'';
            (6) in subparagraph (G) (as so redesignated), by striking 
        ``(G)'' and inserting ``(F)''; and
            (7) in subparagraph (I) (as so redesignated), by striking 
        ``(G)(i)'' and inserting ``(F)(i)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to benefits payable for calendar months beginning after the date 
of the enactment of this Act.
                                 <all>