[Congressional Record Volume 151, Number 106 (Friday, July 29, 2005)]
[Senate]
[Pages S9520-S9523]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Mr. Bayh, and Mrs. Clinton):
  S. 1602. A bill to amend title XIX of the Social Security Act require 
States to disregard benefits paid under long-term care insurance for 
purposes of determining medicaid eligibility, to expand long-term care 
insurance partnerships between States and insurers, to amend the 
Internal Revenue Code of 1986 to allow individuals a deduction for 
qualified long-term care insurance premiums, the use of such insurance 
under cafeteria plans and flexible spending arrangements, and a credit 
for individuals with long-term care needs, to establish home and 
community based services as an optional medicaid benefit, and for other 
purposes; to the Committee on Finance.
  Mr. GRASSLEY. Mr. President, I am pleased to join my colleagues 
Senator Bayh and Senator Clinton in introducing the Improving Long-term 
Care Choices Act. This legislation sets forth a series of proposals 
aimed at improving the accessibility of long-term care insurance and 
promoting awareness about the protection that long-term care insurance 
can offer. It also seeks to broaden the availability of the types of 
long-term care services such as home- and community-based care, which 
many folks prefer to institutional care.
  Before I begin my discussion of the merits of the legislation that I 
am introducing today, I want to take this opportunity to once again 
emphasize my commitment to enacting the Family Opportunity Act. I have 
worked to get the Family Opportunity Act enacted for many years now.
  I have been motivated to work so hard because I have been deeply 
moved by a number of stories from families, both from my State of Iowa 
and elsewhere, who have had to turn down promotions, or even put their 
child with a disability up for adoption in order to secure for these 
children the medical services they so desperately need.
  The Family Opportunity Act would provide a State option to allow 
families with disabled children to ``buy in'' to the Medicaid program; 
establish mental health parity in Medicaid Home and Community Based 
Waiver programs; establish Family to Family Health Information Centers 
and restore Medicaid eligibility for certain SSI beneficiaries.
  As part of the on-going negotiations relative to the FOA, many 
stakeholders have agreed that a modification of a feature of the 
President's New Freedom Initiative, a demonstration program known as 
``Money Follows the Person'' should be enacted along with the FOA. 
Money Follows the Person allows the Secretary to provide grants to 
states to increase the use of home and community based care and 
provides States a financial incentive for the first year to do so.
  I want stakeholders in the disability community as well as the many 
organizations who support the Family Opportunity Act to understand that 
the legislation I am introducing today compliments rather than 
supplants my efforts to enact FOA and Money Follows the Person. I 
believe that we should provide a wide array of options to the states to 
encourage them to identify and eliminate barriers to community living 
including access to consumer direction and respite care.
  Long-term care services can be prohibitively expensive. Just one year 
in a nursing home can cost well over $50,000. In many cases, 
individuals deplete their savings and resources paying for long-term 
and ultimately qualify for Medicaid coverage. Right now, Medicaid pays 
for the bulk of long-term care services in this country. In 2002 alone, 
we spent nearly $93 billion on long-term care services under Medicaid. 
With our aging population, one thing is clear: spending will only 
increase.

  When most people think about purchasing long-term care insurance, 
they think, ``that's something I can put off until tomorrow.'' We need 
to change the perception because the older you are when you first buy 
coverage, the more expensive the premiums are.
  Our legislation calls for the Secretary to educate folks about the 
protection that long-term care insurance can offer. We envision people 
having the opportunity to compare policies available in their States. 
Among other means, this could be accomplished

[[Page S9521]]

through an internet website for example.
  Making people aware of long-term care insurance won't go very far 
though, unless we make some other changes to enhance the value and 
protection that long-term care insurance can bring. Our bill takes 
several steps in this regard.
  First, the legislation would require that States disregard benefits 
paid under a long-term care insurance policy when determining 
eligibility for Medicaid. Second, it incorporates a series of consumer 
protections recommended by the National Association of Insurance 
Commissioner, NAIC, into the definition of `qualified long-term care 
services.' Individuals who purchase a policy that have these consumer 
protections will be eligible for an above the line tax deduction and a 
tax credit for out-of-pocket expenses made by caregivers. Third, the 
bill would expand the long-term care partnership program, which 
currently operates as a demonstration in four states. The long-term 
care partnerships combine private long-term care insurance with 
Medicaid coverage once individuals exhaust their insurance benefits. 
Several States would like to pursue their own long-term care 
partnerships and this legislation will enable them to do that.
  The Improving Long-term Care Choices Act also builds on the 
President's New Freedom Initiative by taking further steps toward 
removing the ``institutional bias'' in Medicaid, giving States the 
option of providing home- and community-based services as part of their 
State Medicaid Plan.
  In doing so, the bill gives States the flexibility to design long-
term care benefits that will reduce the reliance on costly 
institutional settings and meet the needs of elderly and disabled 
individuals who overwhelmingly wish to remain in their homes and 
communities.
  In his New Freedom Initiative announced shortly after taking office, 
President George W. Bush outlined a plan to tear down barriers 
preventing people with disabilities from fully participating in 
American society.
  The President also endorses the idea of shifting Medicaid's delivery 
system towards one that promotes cost-effective, community-based care 
instead of one weighted so heavily towards institutional settings.
  This legislation also challenges us to think beyond funding and 
program silos and directs the Secretary to address administrative 
barriers that impede the integration of acute and long-term care 
services. The Secretary also must develop recommendations for statutory 
changes that will make it easier for States to offer better coordinated 
acute and long-term care services.
  The Improving Long-Term Care Choices Act is consistent with our 
ideals about families, individual choices in health care and financial 
responsibility. This bill aims high. But it is sorely evident that we 
need to think creatively and comprehensively, even boldly, if we hope 
to make the type of inroads in promoting the availability of good long-
term care insurance policies and in rebalancing the institutional bias 
in long-term care services that no longer reflects the needs and 
preferences of many stakeholders.
  The Improving Long-Term Care Choices Act is a good bill. The American 
Network of Community Options and Resources, the Arc & United Cerebral 
Palsy Disability Policy Collaboration, and the National Disability 
Rights Network, the United Spinal Association, and the Association of 
University Centers on Disabilities support the bill. I urge my 
colleagues to do the same.
  I ask unanimous consent that a section-by-section summary of the 
legislation and letters of support be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             Improving Long-Term Care Choices Act--Summary


         TITLE I: LONG-TERM CARE INSURANCE CONSUMER PROTECTIONS

     Subtitle A
       Section 101: State Medicaid Plan requirements regarding 
           Medicaid eligibility determination, long-term care 
           insurance reciprocity, and consumer education
       Requires each state in its Medicaid plan to exclude 
     benefits, including assigned benefits, paid under a 
     qualified-long term care policy in determining income for 
     purposes of determining eligibility for medical assistance.
       Requires that states with a long-term care insurance 
     partnership program to meet requirements for reciprocity to 
     with other long-term care insurance partnership states. 
     Reciprocity rules to be developed as specified in section 
     103.
       Requires the Secretary to educate consumers on the 
     advisability of obtaining long-term care insurance that meets 
     federal standards and the potential interaction between 
     coverage under a policy and federal and state health 
     insurance programs.
       Section 102: Additional consumer protections for long-term 
           care insurance
       Establishes additional consumer protections with respect to 
     long-term care insurance policies based on the October 2000 
     National Association of Insurance Commissioners (NAIC) model 
     regulations including non-cancellability, prohibitions on 
     limitations and exclusions, extension of benefits, 
     continuation of conversion coverage, discontinuance and 
     replacement, prohibitions on post-claim underwriting, 
     inflation protection, and prohibitions on pre-existing 
     condition and probationary periods in replacement policies or 
     certificates.
       Issuers of long-term care insurance policies must also 
     comply with NAIC model provisions related to disclosure of 
     rating practices, application forms and replacement coverage, 
     reporting, filing requirements for marketing, suitability, 
     standard format outline of coverage, and delivery of 
     shopper's guide.
       Issuers must comply with model act policies related to 
     right to return, outline of coverage, certificates under 
     group plans, monthly reports on accelerated death benefits, 
     and incontestability period.
       Applies to policies issued more than 1 year after 
     enactment.
       Section 103: Expansion of State Long-term Care Partnerships
       Permits the expansion of long-term care partnership 
     insurance policies to all states.
       Requires all new partnership policies to be ``qualified 
     long-term care insurance policies'' defined as a policy that: 
     (1) disregards any assets or resources in the amount equal 
     payments made under the policy; (2) requires the holder, upon 
     the policy's effective date, to reside in the state or a 
     state with a qualified long-term care partnership; (3) 
     includes the consumer protections specified in 7702B of the 
     tax code as amended by Section 102 (additional consumer 
     protections); (4) requires compound inflation protection; and 
     (5) requires that any agent selling such policies receive 
     training and demonstrate knowledge of such policies,
       Medicaid asset protection would apply in an equal amount to 
     the insurance benefit paid under the policy, referred to as a 
     dollar-for-dollar model. [The four states (NY, IN, CT, and 
     CA) that currently offer long-tenn care partnership policies 
     that are not dollar-for-dollar may continue to offer those 
     policies.]
       Directs the Secretary to set standards for reciprocity in 
     conjunction with states, insurers, NAIC, and other groups as 
     deemed necessary by the Secretary not later than 12 months 
     after enactment to provide for the portability of long-term 
     care partnership policies from one partnership state to 
     another partnership state.
       Establishes minimum uniform reporting requirements.
       Section 104: National Clearinghouse for Long-term Care 
           Information
       Provides for: (1) development of a national clearinghouse 
     on long-term care information to educate consumers on the 
     importance of purchasing long-term care insurance, and, where 
     appropriate, to assist consumers in comparing long-term care 
     insurance policies offered in their states, including 
     information on benefits, pricing (including historic 
     increases in premiums) as well as other options for financing 
     long-term care and (2) establishment of a website to 
     facilitate comparison of long-term care policies.
       Authorizes such sums a necessary for the clearinghouse in 
     fiscal year 2006 and each year thereafter.
     Subtitle B
       Section 121: Treatment of premiums on qualified long-term 
           care insurance contracts
       Provides individuals an above-the-line tax deduction for 
     the cost of their qualified LTC insurance policy (as defined 
     by HIPAA, section 7702B(b)). Phases in applicable percentage 
     of the deduction based on the number of years of continuous 
     coverage under a qualified LTC policy.
       Section 122: Credit for taxpayers with long-term care needs
       Provides applicable individuals with LTC needs or their 
     eligible caregivers a $3000 tax credit to help cover LTC 
     expenses. An applicable individual is one who has been 
     certified by a physician as needing help with at least 3 
     activities of daily living, such as eating, bathing, 
     dressing. LTC tax credit would be phased-in over 4 years as 
     follows: $1000 in 2005, $1500 in 2006, $2000 in 2007, $2500 
     in 2008, and $3000 in 2009 or thereafter. The credit phases 
     out by $100 for each $1000 (or fraction thereof) by which the 
     taxpayer's modified adjusted gross income exceeds the 
     threshold amount set at $150,000 for a joint return and 
     $75,000 for an individual return.

[[Page S9522]]

       Section 123: Treatment of exchanges of long-term care 
           insurance contracts
       Includes a waiver of limitations, allowing individuals to 
     make claims if there are changes to law.


 TITLE II: MEDICAID HOME AND COMMUNITY-BASED SERVICES OPTIONAL BENEFIT

       Section 201: Medicaid Home and Community-Based Services 
           Optional Benefit
       Provides states with a new option to offer home and 
     community-based services to Medicaid-eligible individuals 
     without obtaining a federal waiver. Under this option states 
     may include one or more home and community-based services 
     currently available under existing waiver authority. States 
     would also be permitted to allow individuals to choose to 
     self-direct services. Under this option, states must 
     establish a more stringent eligibility standard for placement 
     of individuals in institutions, than for placement in a home 
     and community-based setting. States would be permitted to 
     offer a limited benefit consisting of home and community-
     based services only, to certain populations not otherwise 
     eligible for Medicaid, but not to exceed individuals whose 
     income exceeds 300% of SSI income and resource standards. At 
     states option, provides presumptive eligibility for aged, 
     blind and disabled for home and community-based services. If 
     enrollment under the state plan exceeds state projections, 
     the state would be permitted to change eligibility standards 
     to limit enrollment for new applicants, while grandfathering 
     those individuals already receiving services.


  TITLE III: INTEGRATED ACUTE AND LONG-TERM CARE SERVICES FOR DUALLY 
                          ELIGIBLE INDIVIDUALS

       Section 301: Removal of barriers to integrated acute and 
           long-term care services for dually eligible individuals
       Directs the Secretary, in collaboration with directors of 
     State Medicaid programs, health care issuers, managed care 
     plans, and others to issue regulations removing 
     administrative barriers that impede the offering of 
     integrated acute, home and community-based, nursing facility, 
     and mental health services, and to the extent consistent with 
     the enrollee's coverage for such services under Part D, 
     prescription drugs. The Secretary also must submit 
     recommendations to address legislative barriers to offering 
     integrated services. The Medicare Payment Advisory Commission 
     (MedPAC) will comment on the Secretary's recommendations.
                                  ____

                                     American Network of Community


                                        Options and Resources,

                                    Alexandria, VA, July 29, 2005.
     Hon. Charles Grassley,
     Hon. Evan Bayh,
     U.S. Senate, Washington, DC.
       Dear Senators Grassley and Bayh: On behalf of the American 
     Network of Community Options and Resources (ANCOR)--the 
     national association representing more than 850 private 
     providers of supports and services to more than 380,000 
     people with significant disabilities--we extend our 
     appreciation and offer our support in the introduction today 
     of your ``Improving Long-Term Care Choices Act of 2005.''
       It is especially noteworthy that you introduced this bill 
     on the eve of Medicaid's 40th anniversary. Medicaid has 
     worked for millions of people with disabilities, improving 
     their lives over the past four decades. However, Medicaid can 
     and should do better on behalf of the 8 million individuals 
     with disabilities that depend daily upon this program for 
     their health services and long-term supports. This is a 
     propitious moment to send a message to the nation--people 
     with disabilities can count on Medicaid. It makes clear to 
     all that Congress intends to maintain its commitment for a 
     strong federal role in enhancing the lives of people with 
     disabilities.
       People with disabilities, their families, and providers 
     have for years called for the removal of Medicaid's 
     institutional bias. ANCOR provided testimony in. September of 
     2001 in conjunction with the President's New Freedom 
     Initiative that the Congress must change the structure of 
     Medicaid to include state plan home and community-based 
     services. Your bill builds upon the President's initiative, 
     the Supreme Court's Olmstead decision, and ANCOR's commitment 
     to community integration.
       In addition to helping millions of people of all ages who 
     depend upon Medicaid for long-term supports, your legislation 
     will assist millions of moderate-income Americans to address 
     their future long-term needs. By encouraging reliable long-
     term care insurance and tax incentives to defray costs for 
     long-term needs, your bill begins the important process to 
     adopt a national comprehensive long-term care policy. This 
     step is critical as the nation stands on the precipice of the 
     fast approaching ``sleeping giant''--the retirement of the 
     baby boom generation and shift in demographics. In this way, 
     the bill will help reduce the financial pressures on Medicaid 
     and our nation's reliance on it as the only public long-term 
     care program.
       ANCOR is pleased and proud to offer its support to you on 
     this momentous day and to pledge our help in making the 
     ``Improving Long-Term Care Choices Act of 2005'' a reality 
     this session. We are grateful for your leadership and ongoing 
     commitment to people with disabilities and those who provide 
     them with daily supports.
           Sincerely,
                                             Suellen R. Galbraith,
     Director for Government Relations.
                                  ____



                              Disability Policy Collaboration,

                                    Washington, DC, July 29, 2005.
     Hon. Charles Grassley,
     Hon. Evan Bayh,
     U.S. Senate.
       Dear Chairman Grassley and Senator Bayh: The Arc of the 
     United States and United Cerebral Palsy strongly support your 
     introduction of the Improving Long-Term Care Choices Act. The 
     Arc is the national organization of and for people with 
     mental retardation and related developmental disabilities and 
     their families. United Cerebral Palsy is a nationwide network 
     of organizations providing advocacy and direct services to 
     people with disabilities and their families.
       The creation of a Medicaid home and community-based 
     services optional benefit is an important improvement in the 
     federal/state Medicaid program and one for which we have 
     advocated for many years. We believe that the addition of 
     this benefit as an option for states will make it easier for 
     states to serve people with severe disabilities where they 
     want to be served--in their own home communities, rather than 
     in institutions or other facilities. This will increase 
     opportunities for improved quality of life for many children 
     and adults with severe disabilities and their families.
       We applaud your efforts and are grateful for your 
     leadership in introducing this important legislation and 
     pledge to work with you to secure its passage and enactment.
           Sincerely,

                                                Paul Marchand,

                                                   Staff Director,
     Disability Policy Collaboration.
                                  ____

                                               National Disability


                                               Rights Network,

                                    Washington, DC, July 29, 2005.
     Hon. Charles Grassley,
     U.S. Senate,
     Washington, DC.
       Dear Senator Grassley: The National Disability Rights 
     Network (NDRN) is the nonprofit membership organization for 
     the federally mandated Protection and Advocacy (P&A) Systems 
     and the Client Assistance Programs (CAP) for individuals with 
     disabilities. Through training and technical assistance, 
     legal support, and legislative advocacy, NDRN works to create 
     a society in which children and adults with all types of 
     disabilities are afforded equality of opportunity and are 
     able to fully participate by exercising choice and self-
     determination.
       NDRN strongly supports your introduction of the Improving 
     Long Term Care Choices Act of 2005. One of the major goals of 
     the P&A/CAP network is for all individuals with disabilities 
     to live in their own communities--independently, with their 
     families, or with other individuals of their choice. Your 
     determination in bringing forward this bill--with the 
     critical component of establishing home and community-based 
     services and supports as a optional Medicaid benefit, instead 
     of only available through a waiver--is a major step in the 
     right direction.
       NDRN and the entire P&A/CAP network look forward to the day 
     when community-based supports and services for children and 
     adults with disabilities are the norm and institutional 
     services are non-existent or require a waiver.
       We believe that this bill also is very important because it 
     will shine a light on the need for a true long-term care 
     system in our nation. While long-term care insurance is not 
     the answer for everyone, it can be useful--if affordable and 
     if it covers people for a long enough span of time; The 
     availability of long-term care insurance also could help to 
     take the pressure off of the Medicaid program.
       Thank you again for your continuing recognition of the 
     needs of children and adults with disabilities and their 
     families. The disability community looks upon you as one of 
     its leading advocates in the U.S. Congress. NDRN is pleased 
     to offer any help it can in moving the Long-Term Care Choices 
     Act through this session of Congress. Please contact Dr. 
     Kathleen McGinley, 202-408-9514, K[email protected].
           Sincerely,

                                               Lynn Breedlove,

                                                        President,
     NDRN Board of Directors.
                                  ____



                                    United Spinal Association,

                                    Washington, DC, July 29, 2005.
     Hon. Charles Grassley,
     Hon. Evan Bayh,
     U.S. Senate,
     Washington, DC.
       Dear Senators Grassley and Bayh: United Spinal Association, 
     a national disability advocacy organization dedicated to 
     enhancing the quality of life for individuals with spinal 
     cord injury or spinal cord disease by assuring quality health 
     care, promoting research, and advocating for civil rights and 
     independence, thanks you for introducing the Improving Long 
     Term Care Choices Act of 2005. United Spinal applauds your 
     leadership in bringing forward such an important measure, 
     which will assist thousands of Americans with disabilities 
     become more fully integrated and participating members of 
     their communities.
       The Improving Long Term Care Choices Act would help states 
     rebalance their long term supports systems away from an 
     institutional bias by giving states the flexibility to

[[Page S9523]]

     offer community services and supports as a state plan option 
     under Medicaid. The proposal would also encourage individuals 
     to purchase private long-term care insurance, which could 
     help elevate some of the financial pressures off of state 
     Medicaid programs. In addition, this bill will help states in 
     their efforts to comply with the Supreme Court Olmstead 
     decision.
       People with disabilities should be able to live and work in 
     their communities, not segregated in large and costly 
     institutions. This system reform is long overdue. Thank you 
     again for your vision, courage and ongoing leadership to 
     create public policy that promotes independence, productivity 
     and integration of people with disabilities in their 
     communities. United Spinal would like to offer any assistance 
     you need in moving the Improving Long Term Care Choices Act 
     through this session of Congress. Please contact me at (202) 
     331-1002 for assistance.
           Sincerely,

                                        Kimberly Ruff-Wilbert,

                                                   Policy Analyst,
     United Spinal Association.
                                  ____

                                         Association of University


                                      Centers on Disabilities,

                                 Silver Spring, MD, July 29, 2005.
     Hon. Charles Grassley,
     Hon. Evan Bayh,
     U.S. Senate,
     Washington, DC.
       Dear Senators Grassley and Bayh: On behalf of the 
     Association of University Centers on Disabilities (AUCD), a 
     national network that provides education, training and 
     service in developmental disabilities, we want to thank you 
     for introducing the Improving Long Term Care Choices Act of 
     2005. The Association of University Centers on Disabilities 
     (AUCD) applauds your leadership in bringing forward such an 
     important measure, which will assist thousands of Americans 
     with disabilities to be more fully integrated and 
     participating members of their communities.
       The Improving Long Term Care Choices Act would help states 
     rebalance their long term supports systems away from an 
     institutional bias by giving states the flexibility to offer 
     community services and supports as a state plan option under 
     Medicaid. The proposal would also encourage individuals to 
     purchase private long-term care insurance which will help 
     take some of the financial pressure off the Medicaid program. 
     It will also help states in their efforts to comply with the 
     Supreme Court Olmstead decision.
       People with disabilities should be able to live and work in 
     the community with or close to family and friends, not 
     segregated in large and costly institutions. This system 
     reform is long overdue.
       Thank you again for your vision, courage and ongoing 
     leadership to create public policy that promotes 
     independence, productivity and integration of people with 
     disabilities in their communities. AUCD would like to offer 
     any assistance you need in moving the Improving Long Term 
     Care Choices Act through this session of Congress. Please 
     contact Kim Musheno at 301-588-8252 for assistance,
           Sincerely,

                                                 Robert Bacon,

                                                         Co-Chair,
                              AUCD Governmental Affairs Committee.

                                                 Lucille Zeph,

                                                         Co-Chair,
                              AUCD Governmental Affairs Committee.

  Mrs. CLINTON: Mr. President, I am proud to rise today to introduce 
the Improving Long-Term Care Choices Act with Senator Grassley and 
Senator Bayh. This legislation would take several important steps 
toward assisting Americans and their caregivers to meet their long-term 
care needs.
  Issues related to long-term care are of growing concern to many in 
New York and around the Nation. Individuals and families are struggling 
to afford costly care, obtain appropriate information regarding long-
term care insurance, and maintain dignity and choice regarding these 
important services. As I talk with seniors around the State of New York 
and throughout the country, what I hear most is that people want to 
stay in their homes with their loved ones for as long .as they can. 
However, too many individuals and families struggle to be able to 
afford quality home and community based care. In addition, families are 
unsure where to find the resources they need to purchase long-term care 
insurance.
  That is why I have joined with my colleagues to introduce this 
legislation. The Improving Long-Term Care Choices Act will assist 
individuals in meeting their long-term care needs, while reducing 
Medicaid costs.
  This bill will improve access to home and community based services 
through Medicaid that will help seniors remain in their homes and 
communities. It will also expand long-term care insurance consumer 
protections, provide tax deductions for the cost of long-term care 
insurance, and allow tax credits for individuals and their caregivers 
to help cover long-term care expenses not covered by insurance. 
Finally, this legislation would establish a national clearinghouse on 
long-term care information.
  This legislation takes some important steps to assist individuals and 
families in gathering the resources necessary to prepare for their 
long-term care needs and gain access to services in their preferred 
choice of setting.
  I look forward to continuing to work with Senators Grassley and Bayh 
and all of my colleagues to ensure that all Americans have access to 
the resources that help them access high quality long-term care.
                                 ______