[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6300 Introduced in House (IH)]

112th CONGRESS
  2d Session
                                H. R. 6300

 To provide adequate technical assistance and other support to States 
    for long-term care partnership programs, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 2, 2012

Mr. Boustany (for himself, Mr. Gingrey of Georgia, Mrs. Blackburn, Mr. 
Tiberi, and Mr. Westmoreland) introduced the following bill; which was 
 referred to the Committee on Energy and Commerce, and in addition to 
   the Committee on Ways and Means, 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 provide adequate technical assistance and other support to States 
    for long-term care partnership programs, 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.

    This Act may be cited as the ``Medicaid Long-Term Care Reform Act 
of 2012''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) As Congress works to limit future debt and deficits, 
        our Nation cannot afford to overlook Medicaid's long-term care 
        financing crisis.
            (2) The Congressional Research Service reports Medicaid 
        long-term care spending has grown at an average annual rate of 
        6.5 percent since 1995.
            (3) The National Association of State Budget Officers 
        reports that Medicaid spending has already exceeded most 
        components of State budgets, including K-12 education programs.
            (4) According to the Congressional Budget Office, Federal 
        Medicaid spending on long-term care will grow from $73 billion 
        in 2012 to $1.148 trillion in 2021.
            (5) The Department of Health and Human Services has 
        reported that--
                    (A) approximately 70 percent of individuals who are 
                over the age of 65 will need some kind of long-term 
                care services; and
                    (B) at some point more than 40 percent of such 
                individuals will require nursing home care.
            (6) In 2005, the Government Accountability Office projected 
        that by 2040 the number of individuals who are 85 years of age 
        or older, which it finds is the age group most likely to 
        require long-term care services, is projected to increase more 
        than 250 percent from 4,300,000 individuals in 2000 to 
        15,400,000 individuals in 2040.
            (7) The Alzheimer's Association reports more than 
        13,500,000 seniors could develop this disease by 2050.
            (8) Annual industry surveys indicate the median annual rate 
        for a private nursing home room in the United States reached 
        $81,030 in 2012.
            (9) Encouraging middle-income individuals in the United 
        States to anticipate and plan for their future long-term care 
        needs will help them achieve greater health and financial 
        security, as well as greater independence, choice, and control 
        over the services they need in the setting of their choice.
            (10) Advance planning by family members will help to 
        protect caregivers' health, financial security, and quality of 
        life.
            (11) In 2005, the Department of Health and Human Services 
        warned that the retirement plans of many Americans are at risk 
        simply because those Americans do not understand who pays for 
        long-term care and therefore have not planned for the 
        possibility of needing to finance such care.
            (12) Only about 1 in 10 Americans over the age of 55 has 
        enrolled in private long-term care coverage.
            (13) The Government Accountability Office reports State 
        Medicaid programs have, by default, become the major form of 
        insurance for long-term care services.
            (14) A 2011 hearing before the Committee on Oversight and 
        Government Reform of the House of Representatives revealed that 
        someone with up to $750,000 in home equity may qualify as poor 
        under Federal Medicaid rules. Witnesses at the hearing said 
        Federal law also disregards the entire value of other financial 
        resources when determining an individual's eligibility for 
        Medicaid.
            (15) In 2005, the National Governors Association concluded 
        new efforts need to focus on how to encourage personal 
        responsibility and discourage reliance on Medicaid for coverage 
        of long-term care services.
            (16) Professional actuaries have stressed the Federal 
        Government's financial interest in reducing future Medicaid 
        spending by improving affordable long-term care options for 
        middle-income individuals in the United States. Such 
        individuals represent approximately 83 percent of households 
        suited for purchase of long-term care coverage, with an average 
        preretirement household income of $75,000 and average assets of 
        approximately $100,000.
            (17) Section 6021 of the Deficit Reduction Act of 2005 
        (Public Law 109-171) expanded the State Long-Term Care 
        Partnership Program with the goal of--
                    (A) reducing future Medicaid spending on long-term 
                care services; and
                    (B) improving choices by encouraging middle-income 
                individuals in the United States who might otherwise 
                rely upon Medicaid to purchase comprehensive, front-
                end, private, long-term care insurance coverage through 
                the Partnership.
            (18) To encourage Americans to purchase coverage described 
        in paragraph (17)(B), the State Long-Term Care Partnership 
        Program provides protection from Medicaid estate recovery if 
        policyholders use their private coverage and still need 
        Medicaid to provide coverage for long-term care services.
            (19) According to the four States operating a State Long-
        Term Care Partnership Program since the 1990s, only a small 
        percentage of Partnership policyholders using benefits have 
        exhausted their policies and relied on Medicaid, ranging from 
        2.4 percent of such policyholders in California to 7.4 percent 
        in New York.
            (20) More than 40 States have established Long-Term Care 
        Partnership policies since Congress expanded the State Long-
        Term Care Partnership Program in 2005.
            (21) Some States, including Connecticut, have worked to 
        increase the likelihood of Medicaid savings under the State 
        Long-Term Care Partnership Program by developing measures of 
        cost effectiveness for long-term care insurance policies.
            (22) Section 6021(c) of the Deficit Reduction Act of 2005 
        require the Secretary of Health and Human Services to report 
        annually to Congress on the impact of the State Long-Term Care 
        Partnership Program on Federal and State Medicaid expenditures.
            (23) The Secretary of Health and Human Services has failed 
        to comply with this mandatory reporting requirement since the 
        enactment of the Deficit Reduction Act of 2005.
            (24) The Department of Health and Human Services no longer 
        provides technical assistance or facilitates discussions of 
        best practices for improving long-term care savings under the 
        Medicaid program among States participating in the State Long-
        Term Care Partnership Program.
            (25) The Department of Health and Human Services has made 
        no attempts to--
                    (A) track the sale of long-term care insurance 
                policies to middle-income purchasers (who might 
                otherwise rely upon Medicaid to finance long-term care 
                services) under the State Long-Term Care Partnership 
                Program; or
                    (B) to facilitate discussion among States and large 
                employers about best practices for expanding long-term 
                care insurance coverage among middle-income purchasers.
            (26) The Department of Health and Human Services does not 
        consistently measure the results of its taxpayer-funded efforts 
        to increase Americans' long-term care awareness and has no 
        current plans to coordinate with State Governors to raise such 
        awareness.
            (27) Budget experts, including one former Director of the 
        Congressional Budget Office, have warned that the insurance 
        program established by the CLASS Act would increase the deficit 
        over the long term, instead of significantly reducing spending 
        on long-term care under the Medicaid program. Credible long-
        term care reform proposals must address Medicaid's long-term 
        care financing problems without increasing Federal deficits.

SEC. 3. SENSE OF CONGRESS.

    It is a sense of Congress that--
            (1) Congress should repeal the failed CLASS Act;
            (2) Federal and State governments should work to reduce the 
        number of middle-income individuals in the United States who 
        will rely on Medicaid to finance their long-term care needs 
        by--
                    (A) working to make private long-term care 
                insurance more reliable and affordable;
                    (B) building a broad coalition to coordinate a 
                national campaign to better educate middle-income 
                individuals in the United States on their eventual need 
                for long-term care services, coverage limitations under 
                Medicare and Medicaid, and the benefits of purchasing 
                private coverage and planning for retirement;
                    (C) making the long-term care insurance 
                partnerships established as a result of section 6021 of 
                the Deficit Reduction Act of 2005 (Public Law 109-171) 
                more effective by increasing enrollment among middle-
                income individuals in the United States in long-term 
                care insurance policies; and
                    (D) giving States flexibility to change eligibility 
                rules to protect Medicaid long-term care as a safety 
                net for poor Americans who need it most; and
            (3) the Secretary of Health and Human Services should 
        comply with the annual reporting requirements under section 
        6021(c) of the Deficit Reduction Act of 2005 (Public Law 109-
        171) (relating to long-term care insurance partnerships) and 
        promote discussion about the consequences that families and 
        States might encounter if nothing is done to change the 
        trajectory of projected State and Federal spending on long-term 
        care services under the Medicaid program under title XIX of the 
        Social Security Act (42 U.S.C. 1396 et seq.).

SEC. 4. TECHNICAL ASSISTANCE AND BEST PRACTICES.

    (a) Long-Term Care Partnerships.--The Secretary of Health and Human 
Services shall provide to States--
            (1) technical assistance on the implementation and 
        administration of qualified State long-term care insurance 
        partnerships (as such term is defined in section 
        1917(b)(1)(C)(iii) of the Social Security Act (42 U.S.C. 
        1396p(b)(1)(C)(iii))); and
            (2) information on best practices for qualified State long-
        term care insurance partnerships, for the purpose of reducing 
        future State and Federal expenditures on long-term care 
        services under the Medicaid program under title XIX of the 
        Social Security Act (42 U.S.C. 1396 et seq.).
    (b) Estate Recovery Requirements.--The Secretary of Health and 
Human Services shall--
            (1) provide technical assistance to States on requirements 
        related to the mandate to seek recoveries from estates under 
        section 1917(b)(1) of the Social Security Act (42 U.S.C. 
        1396p(b)(1)); and
            (2) hold an annual event to assist States in evaluating 
        methods of implementing such requirements and exchanging best 
        practices information on such methods of implementation.

SEC. 5. NATIONAL CLEARINGHOUSE FOR LONG-TERM CARE INFORMATION.

    (a) National Clearinghouse for Long-Term Care Information Public-
Private Initiative.--Section 6021(d) of the Deficit Reduction Act of 
2005 is amended--
            (1) by redesignating paragraph (3) as paragraph (5); and
            (2) by inserting after paragraph (2) the following:
            ``(3) Coordination of consumer education through public-
        private initiative.--The Secretary of Health and Human 
        Services, acting through the National Clearinghouse for Long-
        Term Care Information, shall establish a public-private 
        initiative to coordinate among the Clearinghouse, State 
        governments, and relevant nongovernmental entities for the 
        purpose of--
                    ``(A) increasing the number of targeted middle-
                income individuals in the United States (as defined by 
                the Secretary) who receive consumer education on--
                            ``(i) the availability and limitations of 
                        coverage for long-term care under the Medicaid 
                        and Medicare programs;
                            ``(ii) the availability of long-term care 
                        insurance and other private market options for 
                        purchasing long-term care coverage and 
                        services; and
                            ``(iii) best practices for individuals and 
                        families who seek to prepare for their long-
                        term care needs (including best practices for 
                        financial planning related to planning for the 
                        cost of such care);
                    ``(B) enhancing the quality of information that 
                targeted consumers receive under clauses (i) through 
                (iii) of subparagraph (A); and
                    ``(C) improving the accessibility of such 
                information for consumers who seek out such 
                information.''.
    (b) Expansion of Clearinghouse Duties To Include Medicare 
Limitations.--Subparagraph (A) of section 6021(d)(2) of the Deficit 
Reduction Act of 2005 is amended--
            (1) by redesignating clauses (ii), (iii), and (iv) as 
        clauses (iii), (iv), and (v), respectively; and
            (2) by inserting after clause (i) the following:
                            ``(ii) educate consumers with respect to 
                        the availability and limitations of coverage 
                        for long-term care under the Medicare 
                        program;''.
    (c) Annual Reports to Congress.--Section 6021(d) of the Deficit 
Reduction Act of 2005 is further amended by inserting after paragraph 
(3), as added by subsection (a), the following:
            ``(4) Annual reports.--
                    ``(A) In general.--Beginning not later than 1 year 
                after the date of the enactment of the Medicaid Long-
                Term Care Reform Act of 2012, the Secretary of Health 
                and Human Services shall submit to the Congress an 
                annual report on the activities of the National 
                Clearinghouse for Long-Term Care Information.
                    ``(B) Contents.--The report under subparagraph (A) 
                shall include an analysis of the extent to which--
                            ``(i) the National Clearinghouse for Long-
                        Term Care Information has engaged 
                        nongovernmental entities in the public-private 
                        initiative described in paragraph (3);
                            ``(ii) such initiative has increased the 
                        awareness of targeted consumers about issues 
                        related to accessing and financing long-term 
                        care; and
                            ``(iii) such initiative has caused 
                        consumers to take measurable actions to plan 
                        for accessing and financing such care.''.

SEC. 6. EVALUATION OF POLICY OPTIONS AND REPORT.

    (a) Study and Evaluation of Methods and Policies To Reduce 
Dependence on Medicaid Long-Term Care Financing.--
            (1) In general.--The Secretary of Health and Human Services 
        shall--
                    (A) evaluate methods to expand long-term care 
                insurance coverage for middle-income individuals in the 
                United States through the State Long-Term Care 
                Partnership Program under section 6021 of the Deficit 
                Reduction Act of 2005 (Public Law 109-171), for the 
                purpose of improving retirement security and long-term 
                care options for such individuals;
                    (B)(i) solicit ideas from the stakeholders listed 
                in subsection (c) on policy options that could reduce 
                projected State and Federal long-term care expenditures 
                under the Medicaid program; and
                    (ii) subject to paragraphs (2) and (3), evaluate 
                the policy options collected under clause (i), as well 
                as other appropriate options to reduce such 
                expenditures, including the option of providing a block 
                grant to States of Medicaid funds for long-term care 
                services; and
                    (C) conduct a study evaluating the effectiveness of 
                Federal laws relating to--
                            (i) treatment of assets for purposes of 
                        determining eligibility for Medicaid long-term 
                        care services;
                            (ii) estate recovery under the Medicaid 
                        program;
                            (iii) the look-back period for transfers of 
                        assets for purposes of Medicaid eligibility 
                        under section 1917(c) of the Social Security 
                        Act (42 U.S.C. 1396p(c)), including the 
                        hardship waiver process under such section and 
                        section 6011 of the Deficit Reduction Act of 
                        2005; and
                            (iv) section 1917(f) of the Social Security 
                        Act (42 U.S.C. 1396p(f)), relating to the 
                        disqualification of individuals with 
                        substantial home equity for long-term care 
                        assistance under Medicaid.
            (2) Inclusion of estimates.--The evaluation under paragraph 
        (1)(B)(ii) shall include estimates of the impact of such policy 
        options on Federal and State spending under Medicaid over a 25-
        year period.
            (3) Limitation.--The Secretary may not evaluate any policy 
        option under paragraph (1)(B)(ii) if such policy option--
                    (A) requires mandatory enrollment of individuals in 
                a program or insurance product;
                    (B) requires employers to automatically enroll 
                individuals in a program or insurance product, without 
                such individuals prior affirmative consent; or
                    (C) requires that premiums collected for a long-
                term care program or insurance product be deposited in 
                government securities or a Federal trust fund, such as 
                the CLASS Independence Fund established by section 3206 
                of the Public Health Service Act.
    (b) Report.--Not later than January 1, 2014, the Secretary of 
Health and Human Services shall submit to Congress a report 
containing--
            (1) recommendations for State governments and the Federal 
        Government on methods described under subsection (a)(1)(A);
            (2) a list of the policy options considered under 
        subsection (a)(1)(B)(ii) (including the estimates on Federal 
        and State spending made with respect to each such option under 
        such subsection) and recommendations on which such options 
        would be most effective at reducing projected State and Federal 
        long-term care expenditures under the Medicaid program while 
        providing an adequate safety net for low-income individuals; 
        and
            (3) the results of the study under subsection (a)(1)(C), 
        and any recommendations for improving such Federal laws.
    (c) Consultation.--In conducting the activities under subsection 
(a) and developing the report required under subsection (b), the 
Secretary shall consult with each of the following stakeholders:
            (1) The American Academy of Actuaries.
            (2) The Governors of each of the 50 States.
            (3) The National Association of Insurance Commissioners.
            (4) America's Health Insurance Plans.
            (5) The American Council of Life Insurers.
            (6) The United States Chamber of Commerce.
            (7) The Alzheimer's Association.
            (8) The AARP.
            (9) The National Association of Health Underwriters.
            (10) The National Association of Independent Financial 
        Advisors.
            (11) The Center for Long-Term Care Reform.
            (12) Experts on the Federal budget, including experts 
        currently or formerly employed by the Congressional Budget 
        Office or the Office of Management and Budget.
            (13) Experts from relevant non-profit organizations and 
        foundations, including the Brookings Institution, the Urban 
        Institute, the Ethics and Public Policy Center, The 
        Commonwealth Fund, the Heritage Foundation, the Cato Institute, 
        and the American Enterprise Institute.
            (14) Any other appropriate stakeholders, as determined by 
        the Secretary.

SEC. 7. CBO REPORT ON POLICY OPTIONS TO REDUCE RELIANCE ON MEDICAID FOR 
              LONG-TERM CARE SERVICES.

    (a) In General.--Not later than January 1, 2014, the Director of 
the Congressional Budget Office shall submit to the Committees on the 
Budget of the House of Representatives and the Senate a report 
containing the following:
            (1) Projection of number of middle-income people who will 
        rely on medicaid for long-term care services.--A projection of 
        the percentage of middle-income individuals in the United 
        States who will rely, partially or completely, on Medicaid to 
        finance their long-term care needs during the next 20 years and 
        the percentage who will rely solely on other resources, 
        including home equity, personal savings, or private long-term 
        care coverage to finance such care.
            (2) Estimate of cost of reliance on medicaid.--An estimate 
        of the cost of such reliance on the Medicaid program to State 
        and Federal governments.
            (3) Estimate of impact of specific policy options.--Subject 
        to subsection (b), an estimate of the change in the cost 
        estimated under paragraph (2) that would result from each of 
        the following policy options:
                    (A) Reduction in home equity exemption.--A 
                reduction in the home equity exemption under section 
                1917(f) of the Social Security Act (42 U.S.C. 1396p(f)) 
                from the amount permitted under such subsection to--
                            (i) $200,000; or
                            (ii) $50,000.
                    (B) Extension of look-back period.--Changing the 
                look-back period for the transfer of assets under 
                section 1917(c)(1) of such Act (42 U.S.C. 1396p(c)(1)) 
                to a period of 10 years.
                    (C) Encouraging state use of liens.--Federal 
                incentives for States to require the use of liens for 
                the purpose of estate recovery under the Medicaid 
                program.
                    (D) Tax incentives for insurance use.--Tax 
                incentives to assist middle-income individuals in the 
                United States with the purchase of long-term care 
                insurance, including by amending section 125 of the 
                Internal Revenue Code of 1986 to permit long-term care 
                insurance products to be included in employer cafeteria 
                plans.
                    (E) Incentives for states to increase purchases of 
                long-term care insurance.--Provide States operating 
                qualified State long-term care insurance partnerships 
                (as defined in section 1917(b)(1)(C)(iii) of such Act 
                (42 U.S.C. 1396p(b)(1)(C)(iii))) with incentives to 
                increase the number of middle-income individuals in the 
                United States who are enrolled in long-term care 
                insurance.
                    (F) Other policy options.--Any other policy options 
                that the Director determines would reduce Federal and 
                State spending on long-term care services under the 
                Medicaid program.
            (4) Estimate of impact of specific policy options on 
        savings under medicaid block grant.--An estimate, for each of 
        the policy options under paragraph (3), of the change in cost 
        estimate under paragraph (2), that would result if each such 
        policy option were adopted and funding for long-term care 
        services under Medicaid is provided to States through a block 
        grant.
    (b) Limitation.--The Director may not evaluate any policy option 
under subsection (a)(3) if such policy option--
            (1) requires mandatory enrollment of individuals in a 
        program or insurance product;
            (2) requires employers to automatically enroll individuals 
        in a program or insurance product, without such individuals 
        prior affirmative consent; or
            (3) requires that premiums collected for a long-term care 
        program or insurance product be deposited in government 
        securities or a Federal trust fund, such as the CLASS 
        Independence Fund established by section 3206 of the Public 
        Health Service Act.
                                 <all>