BILL NUMBER: SB 738 CHAPTERED 10/10/99 CHAPTER 802 FILED WITH SECRETARY OF STATE OCTOBER 10, 1999 APPROVED BY GOVERNOR OCTOBER 7, 1999 PASSED THE SENATE SEPTEMBER 10, 1999 PASSED THE ASSEMBLY SEPTEMBER 9, 1999 AMENDED IN ASSEMBLY SEPTEMBER 7, 1999 AMENDED IN ASSEMBLY AUGUST 30, 1999 AMENDED IN ASSEMBLY AUGUST 16, 1999 AMENDED IN ASSEMBLY JULY 7, 1999 AMENDED IN ASSEMBLY JUNE 28, 1999 AMENDED IN SENATE APRIL 19, 1999 INTRODUCED BY Committee on Insurance (Senators Speier (Chair), Escutia, Figueroa, Johnson, Lewis, and Sher) FEBRUARY 24, 1999 An act to amend Sections 22000, 22001, 22002, 22003, 22004, 22006, 22007, 22008, 22008.5, and 22009 of, to amend and renumber Section 22013 of, to add Section 22005.1 to, to repeal Sections 22010 and 22011 of, and to repeal and add Section 22005 of, the Welfare and Institutions Code, relating to health care coverage. LEGISLATIVE COUNSEL'S DIGEST SB 738, Committee on Insurance. Long-term care program. Existing law establishes the California Partnership for Long-Term Care Pilot Program. 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 and subsequently exhausted the benefits of these private policies. The State Department of Health Services is required to serve as the lead agency in administering the pilot program and to certify long-term care policies and health care service plan contracts under the pilot program. Existing law requires that the resource protection provided by the pilot program be effective only for long-term care policies and health care service plans delivered, issued for delivery, or renewed during an enrollment period of July 1, 1993, to June 30, 2000, inclusive, or before the termination of the pilot program, whichever is sooner. Existing law also requires that an executive and legislative advisory task force be formed to provide advice and assistance in designing and implementing the pilot program. This bill would extend the pilot program to long-term care policies and health care service plans delivered, issued for delivery, or renewed after July 1, 1993, to January 1, 2005, inclusive. The bill would eliminate the requirement that the State Department of Health Services be the lead agency for the program and would eliminate the advisory task force. The bill would provide, in addition to the existing requirement that the State Department of Health Services certify long-term care policies and health care service plan contracts under the program, that policies issued by organizations subject to the Insurance Code be approved by the Department of Insurance, and would revise the criteria for certification and approval. This bill would also repeal a requirement that the Director of Health Services report to the Legislature annually regarding the program. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 22000 of the Welfare and Institutions Code is amended to read: 22000. The California Partnership for Long-Term Care Program is hereby established. SEC. 2. Section 22001 of the Welfare and Institutions Code is amended to read: 22001. 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 (Article 7 (commencing with Section 12300) of Chapter 3 of Part 3 of Division 9) and Medi-Cal, and to provide specified in-home supportive services benefits and specified Medi-Cal benefits to the purchasers of approved and certified insurance policies and health care service plan contracts who qualify under the special provisions of this division. SEC. 3. Section 22002 of the Welfare and Institutions Code is amended to read: 22002. The State Department of Health Services shall seek any federal waivers and approvals necessary to accomplish the purposes of this division. SEC. 4. Section 22003 of the Welfare and Institutions Code is amended to read: 22003. (a) Individuals who participate in the program and have resources above the eligibility levels for receipt of medical assistance under Title XIX of the Social Security Act (Subchapter XIX (commencing with Section 1396) of Chapter 7 of Title 42 of the United States Code) shall be eligible to receive those in-home supportive services benefits specified by the State Department of Social Services, and those Medi-Cal benefits specified by the State Department of Health Services, for which they would otherwise be eligible, if, prior to becoming eligible for benefits, they have purchased a long-term care insurance policy or a health care service plan contract covering long-term care that has been certified by the State Department of Health Services pursuant to this division. (b) Individuals may purchase approved and certified long-term care insurance policies or health care service plan contracts which cover long-term care services in amounts equal to the resources they wish to protect, so long as the amount of insurance purchased exceeds the minimum level set by the State Department of Health Services pursuant to Section 22009. (c) The resource protection provided by this division shall be effective only for long-term care policies, and health care service plan contracts that cover long-term care services, when the policy or contract is delivered, issued for delivery, or renewed on or after July 1, 1993, to January 1, 2005, inclusive. SEC. 5. Section 22004 of the Welfare and Institutions Code is amended to read: 22004. Notwithstanding other provisions of law, the resources, to the extent described in subdivision (c), of an individual who purchases an approved and certified long-term care insurance policy or health care service plan contract which covers long-term care services shall not be considered by: (a) The State Department of Health Services in determining: (1) Medi-Cal eligibility. (2) The amount of any Medi-Cal payment. (3) The amount of any subsequent recovery by the state of payments made for medical services. (b) The State Department of Social Services in determining: (1) Eligibility for in-home supportive services provided pursuant to Article 7 (commencing with Section 12300) of Chapter 3 of Division 9. (2) The amount of any payment for in-home supportive services. (c) The resources not to be considered as provided by this section shall be equal to, or in some proportion set by the State Department of Health Services or State Department of Social Services that is less than equal to, the amount of long-term care insurance payments or benefits made as described in Section 22006. SEC. 6. Section 22005 of the Welfare and Institutions Code is repealed. SEC. 7. Section 22005 is added to the Welfare and Institutions Code, to read: 22005. The State Department of Health Services shall only certify a long-term care insurance policy or a health care service plan contract that meets the Medi-Cal asset protection requirements. SEC. 8. Section 22005.1 is added to the Welfare and Institutions Code, to read: 22005.1. (a) The State Department of Health Services shall only certify a long-term care insurance policy that substantially meets the requirements of Chapter 2.6 (commencing with Section 10230) of Part 2 of Division 2 of the Insurance Code, except the requirements of Sections 10232.1, 10232.2, 10232.25, 10232.8, 10232.9, and 10232.92 of the Insurance Code, and that provides all of the items specified in subdivision (b). The State Department of Health Services shall only certify a health care service plan contract that has been approved by the Department of Corporations pursuant to Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code as providing substantially equivalent coverage to that required by Chapter 2.6 (commencing with Section 10230) of Part 2 of Division 2 of the Insurance Code, and that provides all of the items specified in subdivision (b). Policies issued by organizations subject to the Insurance Code and regulated by the Department of Insurance shall also be approved by the Department of Insurance. (b) Only policies and contracts that provide all of the following items shall be certified by the department: (1) Individual assessment and case management by a coordinating entity designated and approved by the department. (2) Levels and durations of benefits that meet minimum standards set by the State Department of Health Services pursuant to Section 22009. (3) Protection against loss of benefits due to inflation. (4) A periodic record issued to the insured including an explanation of insurance payments or benefits paid that count toward Medi-Cal asset protection under this division. (5) Compliance with any other requirements imposed by regulations adopted by the State Department of Health Services or the State Department of Social Services and consistent with the purposes of this division. SEC. 9. Section 22006 of the Welfare and Institutions Code is amended to read: 22006. The State Department of Health Services, in determining eligibility for Medi-Cal, and the State Department of Social Services, in determining eligibility for in-home supportive services, shall exclude resources up to, or equal to, the amount of insurance payments or benefits paid by approved and certified long-term care insurance policies or health care service plan contracts which cover long-term care services to the extent that the benefits paid are for all of the following: (a) In-home supportive services benefits specified in regulations adopted by the State Department of Social Services pursuant to Section 22009, or those services that Medi-Cal approves or benefits that Medi-Cal provides as specified in regulations adopted by the State Department of Health Services pursuant to Section 22009. (b) Services delivered to insured individuals in a community setting as part of an individual assessment and case management program provided by coordinating entities designated and approved by the State Department of Health Services. (c) Services the insured individual receives after meeting the disability criteria for eligibility for long-term care benefits established by the State Department of Health Services. SEC. 10. Section 22007 of the Welfare and Institutions Code is amended to read: 22007. The program shall be designed so that the estimated aggregate state expenditures for long-term care services for individuals participating in the program do not exceed the aggregate expenditures that would be made for these services under the Medi-Cal program in effect prior to the implementation of this program. SEC. 11. Section 22008 of the Welfare and Institutions Code is amended to read: 22008. Advice and counseling may be provided by the Health Insurance Counseling and Advocacy program within the California Department of Aging to individuals interested in purchasing long-term care insurance or health care service plan contracts that cover long-term care services approved and certified pursuant to this division. SEC. 12. Section 22008.5 of the Welfare and Institutions Code is amended to read: 22008.5. Individuals who participate in the program shall remain eligible for those in-home supportive services benefits and those Medi-Cal benefits for which they are eligible under the program for the life of the purchaser of the policy or contract, as long as the purchaser maintains his or her insurance policy or health care service plan contract in force, or otherwise qualifies for continued benefits in accordance with regulations promulgated by the departments. SEC. 13. Section 22009 of the Welfare and Institutions Code is amended to read: 22009. (a) The State Department of Health Services shall adopt regulations to implement this division, including, but not limited to, regulations which establish: (1) The population and age groups that are eligible to participate in the program. (2) The minimum level of long-term care insurance or long-term care coverage included in health care service plan contracts that must be purchased to meet the requirement of subdivision (b) of Section 22003. (3) The amount and types of services that a long-term care insurance policy or health care service plan contract which includes long-term care services must cover to meet the requirements of this division. (4) Which coordinating entities are designated and approved to deliver individual assessment and case management services to individuals in a community setting, as required by subdivision (b) of Section 22006. (5) The disability criteria for eligibility for long-term care benefits as required by subdivision (c) of Section 22006. (6) The specific eligibility requirements for receipt of the Medi-Cal benefits provided for by the program, and those Medi-Cal benefits for which participants in the program shall be eligible. (b) The State Department of Social Services shall also adopt regulations to implement this division, including, but not limited to, regulations that establish: (1) The specific eligibility requirements for in-home supportive services benefits. (2) Those in-home supportive services benefits for which participants in the program shall be eligible. (c) The State Department of Health Services and the State Department of Social Services shall also jointly adopt regulations that provide for the following: (1) Continuation of benefits beyond the termination of the program pursuant to Section 22008.5. (2) The protection of a participant's resources pursuant to Section 22004, and the ratio of resources to long-term care benefit payments as described in subdivision (c) of Section 22004. (d) The departments shall adopt emergency regulations pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code to implement this division. The adoption of regulations pursuant to this section in order to implement this division shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health, or safety. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, emergency regulations adopted pursuant to this section shall not be subject to the review and approval of the Office of Administrative Law. The regulations shall become effective immediately upon filing with the Secretary of State. The regulations shall not remain in effect more than 120 days unless the adopting agency complies with all of the provisions of Chapter 3.5 (commencing with Section 11340) as required by subdivision (c) of Section 11346.1 of the Government Code. SEC. 14. Section 22010 of the Welfare and Institutions Code is repealed. SEC. 15. Section 22011 of the Welfare and Institutions Code is repealed. SEC. 16. Section 22013 of the Welfare and Institutions Code is amended and renumbered to read: 22010. (a) In implementing this division, the State Department of Health Services may contract, on a bid or nonbid basis, with any qualified individual, organization, or entity for services needed to implement the project, and may negotiate contracts, on a nonbid basis, with long-term care insurers, health care service plans, or both, for the provision of coverage for long-term care services that will meet the certification requirements set forth in Section 22005.1 and the other requirements of this division. (b) In order to achieve maximum cost savings, the Legislature declares that an expedited process for issuing contracts pursuant to this division is necessary. Therefore, contracts entered into on a nonbid basis pursuant to this section shall be exempt from the requirements of Chapter 1 (commencing with Section 10100) and Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of the Public Contract Code.