[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1177 Introduced in Senate (IS)]

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 long-term care 
                   insurance, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Confidence in 
Long-Term Care Insurance Act of 2009''.
    (b) Table of Contents.--The table of contents of 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.
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.

TITLE I--NATIONAL MARKET SURVEY; MODEL DISCLOSURES AND DEFINITIONS; LTC 
                           INSURANCE COMPARE

SEC. 101. NAIC NATIONAL MARKET SURVEY.

    (a) In General.--The Secretary shall request the NAIC to conduct 
biennial reviews of the national and State-specific markets for long-
term care insurance policies and to submit biennial reports to the 
Secretary on the results of such reviews.
    (b) Content.--The Secretary shall request that the biennial reviews 
include, with respect to the period occurring since any prior review, 
analysis of the following:
            (1) Information on key market parameters, including the 
        number of carriers offering long-term care insurance, and the 
        scope of coverage offered under those policies (such as 
        policies offering nursing-home only benefits, policies offering 
        comprehensive coverage, and hybrid products in which long-term 
        care benefits are present).
            (2) The number of complaints received and resolved, 
        including benefit denials.
            (3) The number of policies that are cancelled (including 
        because of having lapsed or not being renewed) and reasons for 
        such cancellations.
            (4) The number of agents trained and the content of that 
        training, including a description of agent training standards, 
        the extent to which competency tests are included in such 
        standards, and the pass and fail rates associated with such 
        tests.
            (5) The number of policyholders exhausting benefits.
            (6) Premium rate increases sought by carriers and the range 
        of the amount of the increase sought.
            (7) Premium rate increases that were approved and the range 
        of the amount of increase.
            (8) The number of policyholders affected by any approved 
        premium rate increases.
            (9) Requests for exceptions to State reserving or capital 
        requirements.
    (c) Timing for Biennial Review and Report.--The Secretary shall 
request the NAIC to--
            (1) complete the initial market review under this section 
        not later than 2 years after the date of enactment of this Act;
            (2) submit a report to the Secretary on the results of the 
        initial review not later than December 31, 2011; and
            (3) complete each subsequent biennial review and submit 
        each subsequent biennial report not later than December 31 of 
        each second succeeding year.
    (d) Consultation Required.--The Secretary shall request the NAIC to 
consult with State insurance commissioners, appropriate Federal 
agencies, issuers of long-term care insurance, States with experience 
in long-term care insurance partnership plans, other States, 
representatives of consumer groups, consumers of long-term care 
insurance policies, and such other stakeholders as the Secretary or the 
NAIC determine appropriate, to conduct the market reviews requested 
under this section.
    (e) Definitions.--In this section and section 102:
            (1) Long-term care insurance policy.--The term ``long-term 
        care insurance policy''--
                    (A) means--
                            (i) a qualified long-term care insurance 
                        contract (as defined in section 7702B(b) of the 
                        Internal Revenue Code of 1986); and
                            (ii) a qualified long-term care insurance 
                        contract that covers an insured who is a 
                        resident of a State with a qualified State 
                        long-term care insurance partnership under 
                        clause (iii) of section 1917(b)(1)(C) of the 
                        Social Security Act (42 U.S.C. 1396p(b)(1)(C)) 
                        or a long-term care insurance policy offered in 
                        connection with a State plan amendment 
                        described in clause (iv) of such section; and
                    (B) includes any other insurance policy or rider 
                described in the definition of ``long-term care 
                insurance'' in section 4 of the model Act promulgated 
                by the National Association of Insurance Commissioners 
                (as adopted December 2006).
            (2) NAIC.--The term ``NAIC'' means the National Association 
        of Insurance Commissioners.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 102. MODEL DISCLOSURES AND DEFINITIONS.

    (a) In General.--The Secretary shall request the NAIC, in 
consultation with State health agencies as appropriate, to carry out 
the activities described in subsection (b).
    (b) Activities Described.--The activities described in this 
subsection are the following:
            (1) Develop model disclosures and definitions for marketing 
        of policies.--To develop model language for marketing of long-
        term care insurance policies (including, as appropriate, 
        language specific to qualified long-term care insurance 
        contracts, partnership long-term care insurance policies, and 
        such other contracts for coverage of long-term care services or 
        benefits as the NAIC determines appropriate), that includes the 
        following:
                    (A) Consistent definitions.--Consistent definitions 
                for coverage of the various types of services and 
                benefits provided under such policies, including 
                institutional services, residential services with 
                varying levels of assistance, such as assisted living, 
                home care services, adult day services, and other types 
                of home and community-based care (as appropriate to 
                describe the range of services and benefits offered 
                under such policies in various States).
                    (B) Consistent explanatory language.--Consistent 
                language for use by issuers of such policies, and for 
                agents selling such policies, in explaining the 
                services and benefits covered under the policies and 
                restrictions on the services and benefits.
                    (C) Inflation protection options.--A form that 
                describes different inflation level options offered for 
                long-term care insurance policies, including how 
                policies with various levels of inflation protection 
                compare in premium costs and benefits within 5-year 
                time increments from 5 years through 30 years post-
                purchase.
                    (D) Standardized methodology for calculating 
                inflation protection.--Standardized methodology for use 
                by issuers to use to calculate inflation protection 
                under such policies.
            (2) Enforce.--To develop recommendations for enforcement of 
        the model marketing disclosures and definitions, including 
        standardized language for States to adopt to prohibit carriers 
        from marketing policies within the State that do not meet the 
        model marketing disclosures and definitions or the rate 
        stability provisions under section 20 of the long-term care 
        insurance model Act promulgated by the National Association of 
        Insurance Commissioners (as adopted as of October 2000 and as 
        of December 2006) and any provisions of such section adopted 
        after December 2006.
    (c) Public Comment.--The Secretary shall request the NAIC to allow 
for public comment on the work of the NAIC in carrying out the 
activities described in subsection (b).

SEC. 103. LTC INSURANCE COMPARE.

    (a) In General.--Section 6021(d) of the Deficit Reduction Act of 
2005 (42 U.S.C. 1396p note) is amended--
            (1) in paragraph (2)--
                    (A) in subparagraph (A)--
                            (i) in clause (ii), by striking ``and'' at 
                        the end;
                            (ii) in clause (iii), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following:
                            ``(iv) establish an Internet directory of 
                        information regarding long-term care insurance, 
                        to be known as `LTC Insurance Compare', that 
                        shall include the following:
                                    ``(I) Comparison tools to assist 
                                consumers in evaluating long-term care 
                                insurance policies (as defined in 
                                subparagraph (D)) with different 
                                benefits and features.
                                    ``(II) State-specific information 
                                about the long-term care insurance 
                                policies marketed in a State, including 
                                the following:
                                            ``(aa) Whether a State has 
                                        promulgated rate stability 
                                        provisions for all issuers of 
                                        long-term care insurance 
                                        policies and how the rate 
                                        stability standards work.
                                            ``(bb) The rating history 
                                        for issuers selling long-term 
                                        care insurance policies in the 
                                        State for at least the most 
                                        recent preceding 5 years.
                                            ``(cc) The policy documents 
                                        for each such policy marketed 
                                        in the State.
                                    ``(III) Links to State information 
                                regarding long-term care under State 
                                Medicaid programs (which may be 
                                provided, as appropriate, through 
                                Internet linkages to the websites of 
                                State Medicaid programs) that includes 
                                the following:
                                            ``(aa) The medical 
                                        assistance provided under each 
                                        State's Medicaid program for 
                                        nursing facility services and 
                                        other long-term care services 
                                        (including any functional 
                                        criteria imposed for receipt of 
                                        such services, as reported in 
                                        accordance with section 
                                        1902(a)(28)(D) of the Social 
                                        Security Act) and any 
                                        differences from benefits and 
                                        services offered under long-
                                        term care insurance policies in 
                                        the State and the criteria for 
                                        triggering receipt of such 
                                        benefits and services.
                                            ``(bb) If the State has a 
                                        qualified State long-term care 
                                        insurance partnership under 
                                        section 1917(b)(1)(C)(iii) of 
                                        the Social Security Act, 
                                        information regarding how and 
                                        when an individual with a 
                                        partnership long-term care 
                                        insurance policy who is 
                                        receiving benefits under the 
                                        policy should apply for medical 
                                        assistance for nursing facility 
                                        services or other long-term 
                                        care services under the State 
                                        Medicaid program and 
                                        information regarding about how 
                                        Medicaid asset protection is 
                                        accumulated over time under 
                                        such policies.''; and
                    (B) by adding at the end the following:
                    ``(C) Current information.--The Secretary of Health 
                and Human Services shall ensure that, to the greatest 
                extent practicable, the information maintained in the 
                National Clearinghouse for Long-Term Care Information, 
                including the information required for LTC Insurance 
                Compare, is the most recent information available.
                    ``(D) Long-term care insurance policy defined.--In 
                subparagraph (A)(iv), the term `long-term care 
                insurance policy' means a qualified long-term care 
                insurance contract (as defined in section 7702B(b) of 
                the Internal Revenue Code of 1986), a qualified long-
                term care insurance contract that covers an insured who 
                is a resident of a State with a qualified State long-
                term care insurance partnership under clause (iii) of 
                section 1917(b)(1)(C) of the Social Security Act (42 
                U.S.C. 1396p(b)(1)(C)) or a long-term care insurance 
                policy offered in connection with a State plan 
                amendment described in clause (iv) of such section, and 
                includes any other insurance policy or rider described 
                in the definition of `long-term care insurance' in 
                section 4 of the model Act promulgated by the National 
                Association of Insurance Commissioners (as adopted 
                December 2006).'';
            (2) by redesignating paragraph (3) as paragraph (4);
            (3) in paragraph (4) (as so redesignated), by inserting ``, 
        and $5,000,000 for each of fiscal years 2011 through 2013'' 
        after ``2010''; and
            (4) by inserting after paragraph (2) the following:
            ``(3) Consultation on ltc insurance compare.--The Secretary 
        of Health and Human Services shall consult with the National 
        Association of Insurance Commissioners and the entities and 
        stakeholders specified in section 101(d) of the Confidence in 
        Long-Term Care Insurance Act of 2009 in designing and 
        implementing the LTC Insurance Compare required under paragraph 
        (2)(A)(iv).''.
    (b) Medicaid State Plan Requirement To Submit Nursing Facility 
Services Functional Criteria Data.--Section 1902(a)(28) of the Social 
Security Act (42 U.S.C. 1396a(a)(28)) is amended--
            (1) in subparagraph (C), by striking ``and'' after the 
        semicolon;
            (2) in subparagraph (D)(iii), by adding ``and'' after the 
        semicolon; and
            (3) by inserting after subparagraph (D)(iii), the following 
        new subparagraph:
                    ``(E) for the annual submission of data relating to 
                functional criteria for the receipt of nursing facility 
                services under the plan (in such form and manner as the 
                Secretary shall specify);''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section take effect on the date of 
        enactment of this Act.
            (2) Extension of effective date for state law amendment.--
        In the case of a State plan under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.) which the Secretary of 
        Health and Human Services determines requires State legislation 
        or State regulation in order for the plan to meet the 
        additional requirements imposed by the amendments made by 
        subsection (b), 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 requirements 
        before the first day of the first calendar quarter beginning 
        after the close of the first regular session of the State 
        legislature that begins after the date of 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 the 
        session is considered to be a separate regular session of the 
        State legislature.

 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.

    (a) In General.--Section 7702B(g)(1) of the Internal Revenue Code 
of 1986 (relating to consumer protection provisions) is amended--
            (1) in subparagraph (A), by inserting ``(but only to the 
        extent such requirements do not conflict with requirements 
        applicable under subparagraph (B)),'' after ``paragraph (2)'',
            (2) by redesignating subparagraphs (B) and (C) as 
        subparagraphs (C) and (D), respectively, and
            (3) by inserting after subparagraph (A), the following new 
        subparagraph:
                    ``(B) the requirements of the model regulation and 
                model Act described in section 1917(b)(5) of the Social 
                Security Act,''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to contracts issued after the date of enactment of this Act.

SEC. 202. STREAMLINED PROCESS FOR APPLYING NEW OR UPDATED MODEL 
              PROVISIONS.

    (a) Secretarial Review.--
            (1) Tax-qualified policies.--
                    (A) 2000 and 2006 model provisions.--Not later than 
                3 months after the date of enactment of this Act, the 
                Secretary of the Treasury, in consultation with the 
                Secretary of Health and Human Services, shall review 
                the model provisions specified in subsection (c)(1) for 
                purposes of determining whether updating any such 
                provisions for a provision specified in section 
                7702B(g)(2) of the Internal Revenue Code of 1986, or 
                the inclusion of any such provisions in such section, 
                for purposes of an insurance contract qualifying for 
                treatment as a qualified long-term care insurance 
                contract under such Code, would improve consumer 
                protections for insured individuals under such 
                contracts.
                    (B) Subsequent model provisions.--Not later than 3 
                months after model provisions described in paragraph 
                (2) or (3) of subsection (c) are adopted by the 
                National Association of Insurance Commissioners, the 
                Secretary of the Treasury, in consultation with the 
                Secretary of Health and Human Services, shall review 
                the model provisions to determine whether the 
                application of such provisions to an insurance contract 
                for purposes of qualifying for treatment as a qualified 
                long-term care insurance contract under section 
                7702B(g)(2) of the Internal Revenue Code of 1986, would 
                improve consumer protections for insured individuals 
                under such contracts.
            (2) Medicaid partnership policies.--
                    (A) Subsequent model provisions.--Not later than 3 
                months after model provisions described in paragraph 
                (2) or (3) of subsection (c) are adopted by the 
                National Association of Insurance Commissioners, the 
                Secretary of Health and Human Services, in consultation 
                with the Secretary of the Treasury, shall review the 
                model provisions to determine whether the application 
                of such provisions to an insurance contract for 
                purposes of satisfying the requirements for 
                participation in a qualified State long-term care 
                insurance partnership under section 1917(b)(1)(C)(iii) 
                of such Act (42 U.S.C. 1396p(b)(1)(C)(iii)) would 
                improve consumer protections for insured individuals 
                under such contracts.
                    (B) Review of other partnership requirements.--The 
                Secretary of Health and Human Services, in consultation 
                with the Secretary of the Treasury, shall review 
                clauses (iii) and (iv) of section 1917(b)(1)(C) for 
                purposes of determining whether the requirements 
                specified in such clauses should be modified to provide 
                improved consumer protections or, as appropriate, to 
                resolve any conflicts with the application of the 2006 
                model provisions under paragraph (5) of section 1917(b) 
                (as amended by section 302(a)) or with the application 
                of any model provisions that the Secretary determines 
                should apply to an insurance contract as a result of a 
                review required under subparagraph (A).
    (b) Expedited Rulemaking.--
            (1) Tax-qualified policies.--Subject to paragraph (3), if 
        the Secretary of the Treasury determines that any model 
        provisions reviewed under subsection (a)(1) should apply for 
        purposes of an insurance contract qualifying for treatment as a 
        qualified long-term care insurance contract under the Internal 
        Revenue Code of 1986, the Secretary, shall promulgate an 
        interim final rule applying such provisions for such purposes 
        not later than 3 months after making such determination.
            (2) Medicaid partnership policies.--Subject to paragraph 
        (3), if the Secretary of Health and Human Services determines 
        that any model provisions or requirements reviewed under 
        subsection (a)(2) should apply for purposes of an insurance 
        contract satisfying the requirements for participation in a 
        qualified State long-term care insurance partnership under 
        section 1917(b)(1)(C)(iii) of such Act (42 U.S.C. 
        1396p(b)(1)(C)(iii)), the Secretary, shall promulgate an 
        interim final rule applying such provisions for such purposes 
        not later than 3 months after making such determination.
            (3) Consultation required.--The Secretary of the Treasury 
        and the Secretary of Health and Human Services, respectively, 
        shall consult with the National Association of Insurance 
        Commissioners and the entities and stakeholders specified in 
        section 101(d) regarding the extent to which it is appropriate 
        to apply the model provisions described in paragraph (1) or (2) 
        (as applicable) to insurance contracts described in such 
        paragraphs through promulgation of an interim final rule. If, 
        after such consultation--
                    (A) the Secretary of the Treasury determines it 
                would be appropriate to promulgate an interim final 
                rule, the Secretary of the Treasury shall use notice 
                and comment rulemaking to promulgate a rule applying 
                such provisions to insurance contracts described in 
                paragraph (1); and
                    (B) the Secretary of Health and Human Services 
                determines it would be appropriate to promulgate an 
                interim final rule, the Secretary of Health and Human 
                Services shall use notice and comment rulemaking to 
                promulgate a rule applying such provisions to insurance 
                contracts described in paragraph (2).
            (4) Rule of construction relating to application of 
        congressional review act.--Nothing in paragraphs (1), (2), or 
        (3) shall be construed as affecting the application of the 
        sections 801 through 808 of title 5, United States Code 
        (commonly known as the ``Congressional Review Act'') to any 
        interim final rule issued in accordance with such paragraphs.
            (5) Technical amendment eliminating prior review standard 
        made obsolete.--Section 1917(b)(5) of the Social Security Act 
        (42 U.S.C. 1396p(b)(5)) is amended by striking subparagraph 
        (C).
    (c) Model Provisions.--In this section, the term ``model 
provisions'' means--
            (1) each provision of 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 and as 
        of December 2006);
            (2) each provision of the model language relating to 
        marketing disclosures and definitions developed under section 
        102(b)(1); and
            (3) each provision of any long-term care insurance model 
        regulation, or the long-term care insurance model Act, 
        respectively, promulgated by the National Association of 
        Insurance Commissioners and adopted after December 2006.

   TITLE III--IMPROVED CONSUMER PROTECTIONS FOR MEDICAID PARTNERSHIP 
                                POLICIES

SEC. 301. BIENNIAL REPORTS ON IMPACT OF MEDICAID LONG-TERM CARE 
              INSURANCE PARTNERSHIPS.

    Section 6021(c) of the Deficit Reduction Act of 2005 (42 U.S.C. 
1396p note) is amended to read as follows:
    ``(c) Biennial Reports.--
            ``(1) In general.--Not later than January 1, 2010, and 
        biennially thereafter, the Secretary of Health and Human 
        Services (in this subsection referred to as the `Secretary') 
        shall issue a report to States and Congress on the long-term 
        care insurance partnerships established in accordance with 
        section 1917(b)(1)(C)(ii) of the Social Security Act (42 U.S.C. 
        1396p(b)(1)(C)(ii)). Each report shall include (with respect to 
        the period the report addresses) the following information, 
        nationally and on a State-specific basis:
                    ``(A) Analyses of the extent to which such 
                partnerships improve access of individuals to 
                affordable long-term care services and benefits and the 
                impact of such partnerships on Federal and State 
                expenditures on long-term care under the Medicare and 
                Medicaid programs.
                    ``(B) Analyses of the impact of such partnerships 
                on consumer decisionmaking with respect to purchasing, 
                accessing, and retaining coverage under long-term care 
                insurance policies (as defined in subsection 
                (d)(2)(D)), including a description of the benefits and 
                services offered under such policies, the average 
                premiums for coverage under such policies, the number 
                of policies sold and at what ages, the number of 
                policies retained and for how long, the number of 
                policies for which coverage was exhausted, and the 
                number of insured individuals who were determined 
                eligible for medical assistance under the State 
                Medicaid program.
            ``(2) Data.--The reports by issuers of partnership long-
        term care insurance policies required under section 
        1917(b)(1)(C)(iii)(VI) of the Social Security Act shall include 
        such data as the Secretary shall specify in order to conduct 
        the analyses required under paragraph (1).
            ``(3) Public availability.--The Secretary shall make each 
        report issued under this subsection publicly available through 
        the LTC Insurance Compare website required under subsection 
        (d).
            ``(4) Rule of construction.--Nothing in this section shall 
        be construed as requiring the Secretary to conduct an 
        independent review of each long-term care insurance policy 
        offered under or in connection with such a partnership.
            ``(5) Appropriation.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated to the Secretary 
        to carry out this subsection, $1,000,000 for the period of 
        fiscal years 2010 through 2012.''.

SEC. 302. ADDITIONAL CONSUMER PROTECTIONS FOR MEDICAID PARTNERSHIPS.

    (a) Application of 2006 Model Provisions.--
            (1) Updating of 2000 requirements.--
                    (A) In general.--Section 1917(b)(5)(B)(i) of the 
                Social Security Act (42 U.S.C. 1396p(b)(5)(B)(i)) is 
                amended by striking ``October 2000'' and inserting 
                ``December 2006''.
                    (B) Conforming amendments.--
                            (i) Subclause (XVII) of such section is 
                        amended by striking ``section 26'' and 
                        inserting ``section 28''.
                            (ii) Subclause (XVIII) of such section is 
                        amended by striking ``section 29'' and 
                        inserting ``section 31''.
                            (iii) Subclause (XIX) of such section is 
                        amended by striking ``section 30'' and 
                        inserting ``section 32''.
            (2) Application to grandfathered partnerships.--Section 
        1917(b)(1)(C)(iv) of such Act (42 U.S.C. 1396p(b)(1)(C)(iv)) is 
        amended by inserting ``, and the State satisfies the 
        requirements of paragraph (5)'' after ``2005''.
    (b) Application of Producer Training Model Act Requirements.--
Section 1917(b)(1)(C) of such Act (42 U.S.C. 1396p(b)(1)(C)) is 
amended--
            (1) in clause (iii)(V), by inserting ``and satisfies the 
        producer training requirements specified in section 9 of the 
        model Act specified in paragraph (5)'' after ``coverage of 
        long-term care''; and
            (2) in clause (iv), as amended by subsection (a)(2), by 
        inserting ``clause (iii)(V) and'' before ``paragraph (5)''.
    (c) Application of Additional Requirements for All Partnerships.--
Section 1917(b) of the Social Security Act (42 U.S.C. 1396p(b)) is 
amended--
            (1) in paragraph (1)(C)--
                    (A) in clause (iii)--
                            (i) by inserting after subclause (VII) the 
                        following new subclause:
                            ``(VIII) The State satisfies the 
                        requirements of paragraph (6).''; and
                            (ii) in the flush sentence at the end, by 
                        striking ``paragraph (5)'' and inserting 
                        ``paragraphs (5) and (6)''; and
                    (B) in clause (iv), as amended by subsections 
                (a)(2) and (b)(2), by striking ``paragraph (5)'' and 
                inserting ``paragraphs (5) and (6)''; and
            (2) by adding at the end the following new paragraph:
    ``(6) For purposes of clauses (iii)(VIII) and (iv) of paragraph 
(1)(C), the requirements of this paragraph are the following:
            ``(A) The State requires issuers of long-term care 
        insurance policies to--
                    ``(i) use marketing materials approved by the State 
                for purposes of the partnership verbatim in all sales 
                and marketing activities conducted or supported by the 
                issuers in the State with respect to any long-term care 
                insurance policies marketed by the issuer in the State;
                    ``(ii) provide such materials to all agents selling 
                long-term care insurance policies in the State;
                    ``(iii) ensure that agent training and education 
                courses conducted or supported by the issuers 
                incorporate such materials; and
                    ``(iv) make such materials available to any 
                consumer upon request, and to make such materials 
                available to all prospective purchasers of a policy 
                offered under a qualified State long-term care 
                insurance partnership before submission of an 
                application for coverage under that policy.
            ``(B) The State requires issuers of long-term care 
        insurance policies to require agents to use the inflation 
        protection comparison form developed by the National 
        Association of Insurance Commissioners in accordance with 
        section 102(b)(1)(C) of the Confidence in Long-Term Care 
        Insurance Act of 2009 when selling the policies in the State.
            ``(C) The State requires issuers of long-term care 
        insurance policies sold in the State to comply with the 
        provisions of section 8 of the model Act specified in paragraph 
        (5) relating to contingent nonforfeiture benefits.
            ``(D) The State enacts legislation, not later than January 
        1, 2012, that establishes rate stability standards for all 
        issuers of long-term care insurance policies sold in the State 
        that are no less stringent than the premium rate schedule 
        increase standards specified in section 20 of the model 
        regulation specified in paragraph (5).
            ``(E) The State develops, updates whenever changes are made 
        under the State plan that relate to eligibility for medical 
        assistance for nursing facility services or other long-term 
        care services or the amount, duration, or scope of such 
        assistance, and provides public, readily accessible materials 
        that describe in clear, simple language the terms of such 
        eligibility, the benefits and services provided as such 
        assistance, and rules relating to adjustment or recovery from 
        the estate of an individual who receives such assistance under 
        the State plan. Such materials shall include a clear disclosure 
        that medical assistance is not guaranteed to partnership 
        policyholders who exhaust benefits under a partnership policy, 
        and that Federal changes to the program under this title or 
        State changes to the State plan may affect an individual's 
        eligibility for, or receipt of, such assistance.
            ``(F) The State--
                    ``(i) through the State Medicaid agency under 
                section 1902(a)(5) and in consultation with the State 
                insurance department, develops written materials 
                explaining how the benefits and rules of long-term care 
                policies offered by issuers participating in the 
                partnership interact with the benefits and rules under 
                the State plan under this title;
                    ``(ii) requires agents to use such materials when 
                selling or otherwise discussing how long-term care 
                policies offered by issuers participating in the 
                partnership work with potential purchasers and to 
                provide the materials to any such purchasers upon 
                request;
                    ``(iii) informs holders of such policies of any 
                changes in eligibility requirements under the State 
                plan under this title and of any changes in estate 
                recovery rules under the State plan as soon as 
                practicable after such changes are made; and
                    ``(iv) agrees to honor the asset protections of any 
                such policy that were provided under the policy when 
                purchased, regardless of whether the State subsequently 
                terminates a partnership program under the State plan.
            ``(G) The State Medicaid agency under section 1902(a)(5) 
        and the State insurance department enter into a memorandum of 
        understanding to--
                    ``(i) inform consumers about changes in long-term 
                care policies offered by issuers participating in the 
                partnership, changes in the amount, duration, or scope 
                of medical assistance for nursing facility services or 
                other long-term care services offered under the State 
                plan, changes in consumer protections, and any other 
                issues such agency and department determine 
                appropriate; and
                    ``(ii) jointly maintain a nonpublic database of 
                partnership policyholders for purposes of facilitating 
                coordination in eligibility determinations for medical 
                assistance under the State plan and the provision of 
                benefits or other services under such policies and 
                medical assistance provided under the State plan that 
                includes--
                            ``(I) the number of policyholders applying 
                        for medical assistance under the State plan; 
                        and
                            ``(II) the number of policyholders deemed 
                        eligible (and, if applicable, ineligible) for 
                        such assistance.
            ``(H) The State does not apply any limit to the disregard, 
        for purposes of determining the eligibility of a partnership 
        policyholder for medical assistance under the State plan and 
        for purposes of exemption from the estate recovery requirements 
        under the plan, of benefits provided under a partnership 
        policy, including cash benefits provided for long-term care 
        services, and benefits provided under the policy after the 
        effective date of the policyholder's enrollment in the State 
        plan.
            ``(I) The State enters into agreements with other States 
        that have established qualified State long-term care insurance 
        partnerships under which such States agree to provide 
        reciprocity for policyholders under such partnerships.
            ``(J) The State provides guaranteed asset protection to all 
        individuals covered under a policy offered under a qualified 
        State long-term care insurance partnership who bought such a 
        policy in the State or in another State with such a partnership 
        and with which the State has a reciprocity agreement at the 
        time of purchase.
            ``(K) At the option of the State, notwithstanding any 
        limitation that would otherwise be imposed under subsection 
        (f), the State disregards any amount of the equity interest in 
        the home of an individual covered of policy offered under a 
        qualified State long-term care insurance partnership for 
        purposes of determining the individual's eligibility for 
        medical assistance with respect to nursing facility services or 
        other long-term care services.''.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section take effect on the date that is 
        1 year after the date of enactment of this Act.
            (2) Extension of effective date for state law amendment.--
        In the case of a State plan under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.) which the Secretary of 
        Health and Human Services determines requires State legislation 
        in order for the plan to meet the additional requirements 
        imposed 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 requirements before the first day of 
        the first calendar quarter beginning after the close of the 
        first regular session of the State legislature that begins 
        after the date of 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 the session is considered to 
        be a separate regular session of the State legislature.

SEC. 303. REPORT TO CONGRESS REGARDING NEED FOR MINIMUM ANNUAL COMPOUND 
              INFLATION PROTECTION.

    Not later than 18 months after the date of enactment of this Act, 
the Secretary of Health and Human Services (in this section referred to 
as the ``Secretary'') shall submit a report to Congress that includes 
the Secretary's recommendation regarding whether legislative or other 
administrative action should be taken to require all long-term care 
insurance policies sold after a date determined by the Secretary in 
connection with a qualified State long-term care insurance partnership 
under clause (iii) of section 1917(b)(1)(C) of the Social Security Act 
(42 U.S.C. 1396p(b)(1)(C)) or a long-term care insurance policy offered 
in connection with a State plan amendment described in clause (iv) of 
such section, provide, at a minimum, 5 percent annual compound 
inflation protection, and if so, whether such requirements should be 
imposed on a basis related to the age of the policyholder at the time 
of purchase. The Secretary shall include in the report information on 
the various levels of inflation protection available under such long-
term care insurance partnerships and the methodologies used by issuers 
of such policies to calculate and present various inflation protection 
options under such policies, including policies with a future purchase 
option feature.
                                 <all>