Amended in Assembly August 1, 2016

Amended in Assembly June 14, 2016

Amended in Senate April 26, 2016

Amended in Senate March 29, 2016

Senate BillNo. 1384


Introduced by Senator Liu

February 19, 2016


An act tobegin insert amend Section 10232.1 of, and to add Section 10232.81 to, the Insurance Code, and toend insert amend Sections 22002, 22003, 22004, 22005, 22005.1,begin delete 22005.2,end delete 22006, 22009, and 22010 of,begin delete and to add Sections 22005.3 and 22011 to,end deletebegin insert to amend, repeal, and add Section 22005.2 of, to add Section 22005.3 to, and to add and repeal Section 22011 of,end insert the Welfare and Institutions Code, relating to long-term care.

LEGISLATIVE COUNSEL’S DIGEST

SB 1384, as amended, Liu. California Partnership for Long-Term Care Program.

Existing law establishes the California Partnership for Long-Term Care Program administered by the State Department of Health Care Services. The purpose of the program is to link private long-term care insurance and health care service plan contracts that cover long-term care with the In-Home Supportive Services program and Medi-Cal and to provide Medi-Cal benefits to certain individuals who have income and resources above the eligibility levels for receipt of medical assistance, but who have purchased certified private long-term care insurance policies. Existing law provides criteria for certification of a long-term care insurance policy, including a requirement that it provide protection against loss of benefits due to inflation.begin insert Existing law requires each organization issuing certified policies to contribute a specified amount to a fund to be used for common educational and marketing expenses, as specified.end insert

This bill would require the department to adopt regulations requiring that a long-term care insurance policy or health care service plan contract that includes long-term care services include nursing and residential care facility coverage only, home care and community-based care coverage only, or comprehensive coverage. The bill would also require that a health care service plan contract or long-term care insurance policy, as a condition of certification, include specified protections against loss of benefits due to inflation. The bill wouldbegin delete alsoend deletebegin insert also, until January 1, 2019,end insert require the formation of an executive and legislative task force to provide advice and assistance in implementing reforms to the California Partnership for Long-Term Care Program and to consider other means to assist consumers in paying for long-term care services and supports, as specified. The task force would be composed of representatives of various state agencies and departments, including the State Department of Health Care Services, the State Department of Social Services, and the California Department of Aging.begin insert The bill would, until January 1, 2019, authorize the department to use moneys in the fund described above to administer the task force, implement recommendations made by the task force, and facilitate review of policy forms for certification by the program and the Department of Insurance.end insert

begin insert

Existing law requires long-term care insurance policies or certificates to provide certain coverage and to make certain disclosures, as specified.

end insert
begin insert

This bill would require an insurance policy, certificate, or rider that is offered under the California Partnership for Long-Term Care Program to be called a home and community-based services policy and to prominently display that it is for home and community-based services only, as specified. The bill would require those policies, certificates, or riders to provide specified coverage.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 10232.1 of the end insertbegin insertInsurance Codeend insertbegin insert is amended
2to read:end insert

P3    1

10232.1.  

(a) Every policy that is intended to be a qualified
2long-term care insurance contract as provided by Public Law
3104-191 shall be identified as such by prominently displaying and
4printing on page one of the policy form and the outline of coverage
5and in the application the following words: “This contract for
6long-term care insurance is intended to be a federally qualified
7long-term care insurance contract and may qualify you for federal
8and state tax benefits.” Every policy that is not intended to be a
9qualified long-term care insurance contract as provided by Public
10Law 104-191 shall be identified as such by prominently displaying
11and printing on page one of the policy form and the outline of
12coverage and in the application the following words: “This contract
13for long-term care insurance is not intended to be a federally
14qualified long-term care insurance contract.”

15(b) Any policy or certificate in which benefits are limited to the
16provision of institutional care shall be called a “nursing facility
17and residential care facility only” policy or certificate and the
18words “Nursing Facility and Residential Care Facility Only” shall
19be prominently displayed on page one of the form and the outline
20of coverage. The commissioner may approve alternative wording
21if it is more descriptive of the benefits.

22(c) Any policy or certificate in which benefits are limited to the
23provision of home care services, including community-based
24services, shall be called a “home care only” policy or certificate
25and the words “Home Care Only” shall be prominently displayed
26on page one of the form and the outline of coverage. The
27commissioner may approve alternative wording if it is more
28descriptive of the benefits.

begin insert

29
(d) Any policy, certificate, or rider in which benefits are limited
30to the provision of all care settings, except nursing facility care,
31and that is offered under the California Partnership for Long-Term
32Care Program established by Section 22000 of the Welfare and
33Institutions Code shall be called a home and community-based
34services policy, certificate, or rider and the words “Home and
35Community-Based Services Only” shall be prominently displayed
36on the first page of the form and the outline of coverage. The
37commissioner may approve an alternative version of those words
38if the alternative version is more descriptive of the benefits
39provided.

end insert
begin delete

40(d)

end delete

P4    1begin insert(e)end insert Only those policies or certificates providing benefits for both
2institutional care and home care may be called “comprehensive
3long-term care” insurance.

4begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 10232.81 is added to the end insertbegin insertInsurance Codeend insertbegin insert, to
5read:end insert

begin insert
6

begin insert10232.81.end insert  

(a) Every long-term care policy, certificate, or rider
7that purports to provide benefits of home and community-based
8services under the California Partnership for Long-Term Care
9Program established by Section 22000 of the Welfare and
10Institutions Code shall provide at least the following:

11
(1) Residential care facility.

12
(2) Assisted living facility.

13
(3) Home health care.

14
(4) Adult day care.

15
(5) Personal care.

16
(6) Homemaker services.

17
(7) Hospice services.

18
(8) Respite care.

19
(b) For purposes of this section, policy definitions of the benefits
20described in subdivision (a) may be no more restrictive than the
21following:

22
(1) “Residential care facility” means a facility that is licensed
23as a residential care facility for the elderly or a residential care
24facility as defined in the Health and Safety Code. Outside
25California, an eligible provider is a facility that meets licensure
26standards applicable to the facility, if any, and is engaged primarily
27in providing ongoing care and related services sufficient to support
28needs resulting from impairment in activities of daily living or
29impairment in cognitive ability and which also provides care and
30services on a 24-hour basis, has a trained and ready-to-respond
31employee on duty in the facility at all times to provide care and
32services, provides three meals per day and accommodates special
33dietary needs, has agreements to ensure that residents receive the
34medical care services of a physician or nurse in case of emergency,
35and has appropriate methods and procedures to provide necessary
36assistance to residents in the management of prescribed
37medications.

38
(2) “Assisted living facility” means a facility licensed as an
39assisted living facility as defined in the Health and Safety Code.
40Outside California, an eligible provider is a facility that meets
P5    1licensure standards applicable to the facility, if any, and is engaged
2primarily in providing food and shelter and providing personal
3care services, or in administering medication by a person licensed
4or otherwise authorized to administer the medication.

end insert
5

begin deleteSECTION 1.end delete
6
begin insertSEC. 3.end insert  

Section 22002 of the Welfare and Institutions Code is
7amended to read:

8

22002.  

The State Department of Health Care Services shall
9seek any federal waivers and approvals necessary to accomplish
10the purposes of this division.

11

begin deleteSEC. 2.end delete
12
begin insertSEC. 4.end insert  

Section 22003 of the Welfare and Institutions Code is
13amended to read:

14

22003.  

(a) Individuals who participate in the program and
15have resources above the eligibility levels for receipt of medical
16assistance under Title XIX of the Social Security Act (Subchapter
17XIX (commencing with Section 1396) of Chapter 7 of Title 42 of
18the United States Code) shall be eligible to receive those in-home
19supportive services benefits specified by the State Department of
20Social Services, and those Medi-Cal benefits specified by the State
21Department of Health Care Services, for which they would
22otherwise be eligible, if, prior to becoming eligible for benefits,
23they have purchased a long-term care insurance policy or a health
24care service plan contract covering long-term care that has been
25certified by the State Department of Health Care Services pursuant
26to this division.

27(b) Individuals may purchase approved and certified long-term
28care insurance policies or health care service plan contracts which
29cover long-term care services in amounts equal to the resources
30they wish to protect, so long as the amount of insurance purchased
31exceeds the minimum level set by the State Department of Health
32Care Services pursuant to Section 22009.

33(c) The resource protection provided by this division shall be
34effective only for long-term care policies, and health care service
35plan contracts that cover long-term care services, when the policy
36or contract is delivered, issued for delivery, or renewed on July 1,
371993, and thereafter.

38

begin deleteSEC. 3.end delete
39
begin insertSEC. 5.end insert  

Section 22004 of the Welfare and Institutions Code is
40amended to read:

P6    1

22004.  

Notwithstanding other provisions of law, the resources,
2to the extent described in subdivision (c), of an individual who
3purchases an approved and certified long-term care insurance
4policy or health care service plan contract which covers long-term
5care services shall not be considered by:

6(a) The State Department of Health Care Services in
7determining:

8(1) Medi-Cal eligibility.

9(2) The amount of any Medi-Cal payment.

10(3) The amount of any subsequent recovery by the state of
11payments made for medical services.

12(b) The State Department of Social Services in determining:

13(1) Eligibility for in-home supportive services provided pursuant
14to Article 7 (commencing with Section 12300) of Chapter 3 of
15Division 9.

16(2) The amount of any payment for in-home supportive services.

17(c) The resources not to be considered as provided by this
18section shall be equal to, or in some proportion set by the State
19Department of Health Care Services or State Department of Social
20Services that is less than equal to, the amount of long-term care
21insurance payments or benefits made as described in Section 22006.

22

begin deleteSEC. 4.end delete
23
begin insertSEC. 6.end insert  

Section 22005 of the Welfare and Institutions Code is
24amended to read:

25

22005.  

The State Department of Health Care Services shall
26only certify a long-term care insurance policy or a health care
27service plan contract that meets the Medi-Cal asset protection
28requirements.

29

begin deleteSEC. 5.end delete
30
begin insertSEC. 7.end insert  

Section 22005.1 of the Welfare and Institutions Code
31 is amended to read:

32

22005.1.  

(a) The State Department of Health Care Services
33shall only certify a long-term care insurance policy that
34substantially meets the requirements of Chapter 2.6 (commencing
35with Section 10230) of Part 2 of Division 2 of the Insurance Code,
36except the requirements of Sections 10232.1, 10232.2, 10232.8,
3710232.9, and 10232.92 of the Insurance Code, and that provides
38all of the items specified in subdivision (b). The State Department
39of Health Care Services shall only certify a health care service
40plan contract that has been approved by the Department of
P7    1Managed Health Care pursuant to Chapter 2.2 (commencing with
2Section 1340) of Division 2 of the Health and Safety Code as
3providing substantially equivalent coverage to that required by
4Chapter 2.6 (commencing with Section 10230) of Part 2 of Division
52 of the Insurance Code, and that provides all of the items specified
6in subdivision (b). Policies issued by organizations subject to the
7Insurance Code and regulated by the Department of Insurance
8shall also be approved by the Department of Insurance.

9(b) Only policies and contracts that provide all of the following
10items shall be certified by the department:

11(1) Individual assessment and case management by a
12coordinating entity designated and approved by the department.

13(2) Levels and durations of benefits that meet minimum
14standards set by the State Department of Health Care Services
15pursuant to Section 22009.

16(3) Protection against loss of benefits due to inflation. An
17applicant shall be offered, at the time of purchase, the following
18options:

19(A) One option that provides, at a minimum, protection against
20an inflation rate of 5 percent or more, up to an age specified by
21the program.

22(B) At least one lower cost option.

23(4) A periodic record issued to the insured including an
24explanation of insurance payments or benefits paid that count
25toward Medi-Cal asset protection under this division.

26(5) Compliance with any other requirements imposed by
27regulations adopted by the State Department of Health Care
28 Services or the State Department of Social Services and consistent
29with the purposes of this division.

30

begin deleteSEC. 6.end delete
31
begin insertSEC. 8.end insert  

Section 22005.2 of the Welfare and Institutions Code
32 is amended to read:

33

22005.2.  

begin insert(a)end insertbegin insertend insert Each organization issuing policies certified by
34the State Department of Health Care Services under this division
35shall each year contribute to a fund to be used for common
36educational and marketing expenses for reaching the target
37population designated by the California Partnership for Long-Term
38Care Program. The amount of each participating issuer’s required
39annual contribution shall be determined by the department and
40shall not be less than twenty thousand dollars ($20,000).

begin insert

P8    1
(b) The fund may also be used to administer the task force
2established by Section 22011, implement recommendations made
3by the task force, and facilitate review of policy forms for
4certification by the program and approval by the Department of
5Insurance. Use of these funds shall be consistent with the purpose
6of the program as established by Section 22011.

end insert
begin insert

7
(c) This section shall remain in effect only until January 1, 2019,
8and as of that date is repealed, unless a later enacted statute, that
9is enacted before January 1, 2019, deletes or extends that date.

end insert
10begin insert

begin insertSEC. 9.end insert  

end insert

begin insertSection 22005.2 is added to the end insertbegin insertWelfare and Institutions
11Code
end insert
begin insert, to read:end insert

begin insert
12

begin insert22005.2.end insert  

(a) Each organization issuing policies certified by
13the State Department of Health Care Services under this division
14shall each year contribute to a fund to be used for common
15educational and marketing expenses for reaching the target
16population designated by the California Partnership for Long-Term
17Care Program. The amount of each participating issuer’s required
18annual contribution shall be determined by the department and
19shall not be less than twenty thousand dollars ($20,000).

20
(b) This section shall become operative on January 1, 2019.

end insert
21

begin deleteSEC. 7.end delete
22
begin insertSEC. 10.end insert  

Section 22005.3 is added to the Welfare and
23Institutions Code
, to read:

24

22005.3.  

The insurer or producer shall, at the time of
25application, provide to the individual a graph that illustrates the
26difference in premium rates and policy benefits payable in
27accordance with the inflation protection provisions described in
28Section 22005.1.

29

begin deleteSEC. 8.end delete
30
begin insertSEC. 11.end insert  

Section 22006 of the Welfare and Institutions Code
31 is amended to read:

32

22006.  

The State Department of Health Care Services, in
33determining eligibility for Medi-Cal, and the State Department of
34Social Services, in determining eligibility for in-home supportive
35services, shall exclude resources up to, or equal to, the amount of
36insurance payments or benefits paid by approved and certified
37long-term care insurance policies or health care service plan
38contracts which cover long-term care services to the extent that
39the benefits paid are for all of the following:

P9    1(a) In-home supportive services benefits specified in regulations
2adopted by the State Department of Social Services pursuant to
3Section 22009, or those services that Medi-Cal approves or benefits
4that Medi-Cal provides as specified in regulations adopted by the
5State Department of Health Care Services pursuant to Section
622009.

7(b) Services delivered to insured individuals at home or in a
8community setting as part of an individual assessment and case
9management program provided by coordinating entities designated
10and approved by the State Department of Health Care Services.

11(c) Services the insured individual receives after meeting the
12disability criteria for eligibility for long-term care benefits
13established by the State Department of Health Care Services.

14

begin deleteSEC. 9.end delete
15
begin insertSEC. 12.end insert  

Section 22009 of the Welfare and Institutions Code
16 is amended to read:

17

22009.  

(a) The State Department of Health Care Services shall
18adopt regulations to implement this division, including, but not
19limited to, regulations that establish:

20(1) The population and age groups that are eligible to participate
21in the program.

22(2) The minimum level of long-term care insurance or long-term
23care coverage included in health care service plan contracts that
24must be purchased to meet the requirement of subdivision (b) of
25Section 22003.

26(3) (A) The amount and types of services that a long-term care
27insurance policy or health care service plan contract that includes
28long-term care services must cover to meet the requirements of
29this division. The types of policies or plans shall include nursing
30and residential care facility coverage only, home care and
31community-based care coverage only, and comprehensive
32coverage.

33(B) Policies that provide only home care benefits shall include
34coverage for electronic or other devices intended to assist in
35monitoring the health and safety of an insured.

36(4) Which coordinating entities are designated and approved to
37deliver individual assessment and case management services to
38individuals at home or in a community setting, as required by
39subdivision (b) of Section 22006.

P10   1(b) The State Department of Health Care Services shall also
2adopt regulations to implement this division, including, but not
3limited to, regulations that establish:

4(1) The disability criteria for eligibility for long-term care
5benefits as required by subdivision (c) of Section 22006.

6(2) The specific eligibility requirements for receipt of the
7Medi-Cal benefits provided for by the program, and those Medi-Cal
8benefits for which participants in the program shall be eligible.

9(c) The State Department of Social Services shall also adopt
10regulations to implement this division, including, but not limited
11to, regulations that establish:

12(1) The specific eligibility requirements for in-home supportive
13services benefits.

14(2) Those in-home supportive services benefits for which
15participants in the program shall be eligible.

16(d) The State Department of Health Care Services and the State
17Department of Social Services shall also jointly adopt regulations
18that provide for the following:

19(1) Continuation of benefits pursuant to Section 22008.5.

20(2) The protection of a participant’s resources pursuant to
21Section 22004, and the ratio of resources to long-term care benefit
22payments as described in subdivision (c) of Section 22004.

23(e) (1) The departments shall adopt emergency regulations
24pursuant to Chapter 3.5 (commencing with Section 11340) of Part
251 of Division 3 of Title 2 of the Government Code to implement
26this division. The adoption of regulations pursuant to this section
27in order to implement this division shall be deemed to be an
28emergency and necessary for the immediate preservation of the
29public peace, health, or safety.

30(2) Notwithstanding Chapter 3.5 (commencing with Section
3111340) of Part 1 of Division 3 of Title 2 of the Government Code,
32emergency regulations adopted pursuant to this section shall not
33be subject to the review and approval of the Office of
34Administrative Law. The regulations shall become effective
35immediately upon filing with the Secretary of State. The regulations
36shall not remain in effect more than 120 days unless the adopting
37 agency complies with all of the provisions of Chapter 3.5
38(commencing with Section 11340) as required by subdivision (c)
39of Section 11346.1 of the Government Code.

P11   1

begin deleteSEC. 10.end delete
2
begin insertSEC. 13.end insert  

Section 22010 of the Welfare and Institutions Code
3 is amended to read:

4

22010.  

(a) In implementing this division, the State Department
5of Health Care Services may contract, on a bid or nonbid basis,
6with any qualified individual, organization, or entity for services
7needed to implement the project, and may negotiate contracts, on
8a nonbid basis, with long-term care insurers, health care service
9plans, or both, for the provision of coverage for long-term care
10services that will meet the certification requirements set forth in
11Section 22005.1 and the other requirements of this division.

12(b) In order to achieve maximum cost savings, the Legislature
13declares that an expedited process for issuing contracts pursuant
14to this division is necessary. Therefore, contracts entered into on
15a nonbid basis pursuant to this section shall be exempt from the
16requirements of Chapter 1 (commencing with Section 10100) and
17Chapter 2 (commencing with Section 10290) of Part 2 of Division
182 of the Public Contract Code.

19

begin deleteSEC. 11.end delete
20
begin insertSEC. 14.end insert  

Section 22011 is added to the Welfare and Institutions
21Code
, to read:

22

22011.  

(a) An executive and legislative task force shall be
23formed to provide advice and assistance in implementing reforms
24to the California Partnership for Long-Term Care Program and to
25consider other means to assist consumers in paying for long-term
26care services and supports.

27(b) The task force formed pursuant to subdivision (a) shall be
28composed of representatives designated by each of the following:

29(1) The State Department of Health Care Services.

30(2) The State Department of Social Services.

31(3) The California Department of Aging.

32(4) The Department of Insurance.

33(5) The Department of Managed Health Care.

34(6) The Senate Committee on Rules.

35(7) The Speaker of the Assembly.

36(c) The task force shall consult with persons knowledgeable of
37and concerned with long-term care, including, but not limited to,
38the following:

39(1) begin deleteConsumers. end deletebegin insertConsumer representatives.end insert

40(2) begin deleteHealth end deletebegin insertLong-term end insertcare providers.

P12   1(3) Representatives of long-term care insurance companies and
2administrators of health care service plans which cover long-term
3care.

4(4) Private employers.

5(5) Academic specialists in long-term care and aging.

6(6) Representatives of the Public Employees’ Retirement System
7and the State Teachers’ Retirement System.

begin insert

8
(d) This section shall remain in effect only until January 1, 2019,
9and as of that date is repealed, unless a later enacted statute, that
10is enacted before January 1, 2019, deletes or extends that date.

end insert


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