S.Amdt. 2996

SA 2996. Mr. KOHL (for himself, Mr. Wyden, and Ms. Klobuchar)
submitted an amendment intended to be proposed

[[Page S12641]]

to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 1979, between lines 15 and 16, insert the
following:

Subtitle B--Long-Term Care Insurance

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

SEC. 8101. NAIC NATIONAL MARKET SURVEY.

(a) In General.--The Secretary shall request the NAIC to
conduct reviews of the national and State-specific markets
for long-term care insurance policies and to submit reports
to the Secretary on the results of such reviews every 5
years.
(b) Content.--The Secretary shall request that the reviews
include, with respect to the period occurring since any prior
review, analysis of the following:
(1) Information on key market parameters, including the
number of carriers offering long-term care insurance, and the
scope of coverage offered under those policies (such as
policies offering nursing-home only benefits, policies
offering comprehensive coverage, cash plans, and
reimbursement plans, and hybrid products in which long-term
care benefits are present).
(2) The number of complaints received and resolved,
including benefit denials.
(3) The number of policies that have lapsed.
(4) The number of agents trained and whether the training
included competency tests.
(5) The number of policyholders exhausting benefits.
(6) The number of premium rate increases filed by carriers
on a policy basis with the States, including the ranges of
the increases approved for or finally used.
(7) The number of policyholders affected by any premium
rate increases.
(8) Requests for exceptions to State permitted accounting
practices, as defined by the NAIC.
(c) Timing for Reviews and Reports.--The Secretary shall
request the NAIC to--
(1) complete the initial market review under this section
not later than 2 years after the date of enactment of this
Act;
(2) submit a report to the Secretary on the results of the
initial review not later than December 31, 2011; and
(3) complete each subsequent review and submit each
subsequent report not later than December 31 of the fifth
succeeding year.
(d) Consultation Required.--The Secretary shall request the
NAIC to consult with State insurance commissioners,
appropriate Federal agencies, issuers of long-term care
insurance, States with experience in long-term care insurance
partnership plans, other States, representatives of consumer
groups, consumers of long-term care insurance policies, and
such other stakeholders as the Secretary or the NAIC
determine appropriate, to conduct the market reviews
requested under this section.
(e) Definitions.--In this section and section 8102:
(1) Long-term care insurance policy.--The term ``long-term
care insurance policy''--
(A) means--
(i) a qualified long-term care insurance contract (as
defined in section 7702B(b) of the Internal Revenue Code of
1986); and
(ii) a qualified long-term care insurance contract that
covers an insured who is a resident of a State with a
qualified State long-term care insurance partnership under
clause (iii) of section 1917(b)(1)(C) of the Social Security
Act (42 U.S.C. 1396p(b)(1)(C)) or a long-term care insurance
policy offered in connection with a State plan amendment
described in clause (iv) of such section; and
(B) includes any other insurance policy or rider described
in the definition of ``long-term care insurance'' in section
4 of the model Act promulgated by the National Association of
Insurance Commissioners (as adopted December 2006).
(2) NAIC.--The term ``NAIC'' means the National Association
of Insurance Commissioners.
(3) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.

SEC. 8102. MODEL DISCLOSURE FORM.

(a) NAIC Study and Report on State Disclosure Requirements
for Long-Term Care Insurance.--
(1) In general.--The Secretary shall request the NAIC to
carry out the activities described in paragraph (2) and issue
the report described in paragraph (3).
(2) Review and development of proposed model disclosure
requirements.--The activities described in this paragraph are
the following:
(A) Model act and regulation disclosure requirements.--
Review and describe disclosure requirements for long-term
care insurance policies under the Model Act and regulation.
(B) State law disclosure requirements.--Review and describe
disclosure requirements for long-term care insurance policies
under State laws, including as part of such description an
analysis of the effectiveness of the various existing
disclosures.
(C) Long-term care services.--Review and describe
differences in long-term care services, including with
respect to providers of such services and the settings in
which such services are provided among States and develop
standardized definitions for long-term care services.
(D) Identification of key issues for development of model
disclosure marketing form.--Identify and describe key issues
to consider in the development of a proposed form for
marketing long-term care insurance policies.
(3) Report.--The report described in this paragraph is an
NAIC White Paper that is issued not later than 12 months
after the date of enactment of this Act and contains the
results of the reviews conducted under paragraph (2) and the
descriptions required under that paragraph.
(b) NAIC Working Group to Develop Model Disclosure Form for
Long-Term Care Insurance.--
(1) In general.--The Secretary shall request the NAIC to
establish, not later than 60 days after the date on which the
NAIC White Paper described in subsection (a)(3) is issued and
in consultation with the Secretary and the Secretary of the
Treasury, a Working Group to develop a model disclosure form
for marketing long-term care insurance policies.
(2) Working group members.--The Working Group established
under paragraph (1) shall be composed of the following:
(A) Representatives from State Departments of Health (or
the most appropriate State agencies with responsibility for
oversight of the provision of long-term care).
(B) Representatives of long-term care providers and
facilities.
(C) Consumer advocates.
(D) Representatives of issuers of long-term care insurance
policies.
(E) Representatives of the NAIC or State insurance
commissioners.
(F) Other experts in long-term care and long-term care
insurance policies selected by the Secretary and Secretary of
the Treasury or the NAIC.
(3) Requirements for development of form.--
(A) Considerations.--In developing the model form, the
Working Group shall consider the following:
(i) Variations among providers, services, and facilities in
the long-term care and long-term care insurance markets.
(ii) The results of the reviews and the descriptions
included in the NAIC White Paper issued under subsection
(a)(3).
(iii) Such other information and factors as the Working
Group determines appropriate.
(B) Minimum standards.--The Working Group shall ensure that
the model has--
(i) minimum standard definitions for coverage of the
various types of services and benefits provided under long-
term care insurance policies;
(ii) minimum standard language for use by issuers of such
policies, and for agents selling such policies, in explaining
the services and benefits covered under the policies and
restrictions on the services and benefits;
(iii) minimum standard format, color and type size for
disclosure documents; and
(iv) such other minimum standards as the Working Group
determines appropriate.
(4) Deadline for development.--The Working Group shall
issue a proposed model disclosure form for marketing long-
term care insurance policies not later than 1 year after the
date on which the Working Group is established.
(5) Adoption and incorporation into model act and
regulation.--The Secretary shall request the NAIC to amend
the Model Act and regulation to incorporate the use of the
proposed model disclosure form issued by the Working Group,
not later than 1 year after the date on which the Working
Group issues the form.
(c) Required Use of Model Disclosure Form in Marketing
Long-Term Care Insurance Policies.--
(1) Application to tax-qualified and medicaid partnership
policies.--Not later than 1 year after the date on which the
Working Group issues the proposed model disclosure form for
marketing long-term care insurance policies under subsection
(b):
(A) Tax-qualified policies.--The Secretary of the Treasury
shall promulgate a regulation requiring, not later than 1
year after the date on which the regulation is final, any
issuer of a qualified long-term care insurance contract (as
defined in section 7702B(b) of the Internal Revenue Code of
1986) to use the proposed model disclosure form for marketing
such contracts, to the extent such disclosure is not
inconsistent with State law.
(B) Medicaid partnership policies.--The Secretary shall
promulgate a regulation requiring, not later than 1 year
after the date on which the regulation is final, any issuer
that markets a qualified long-term care insurance contract
intended to cover an insured who is a resident of a State
with a qualified State long-term care insurance partnership
under clause (iii) of section 1917(b)(1)(C) of the Social
Security Act (42 U.S.C. 1396p(b)(1)(C)) or a long-term care
insurance policy offered in connection with a State plan
amendment described in clause (iv) of such section to use the
proposed model disclosure form for marketing such contracts.
(2) Application to all other long-term care insurance
policies.--Not later than 18 months, or the earliest date on
which an amendment could be enacted for those

[[Page S12642]]

States with legislatures which meet only every other year,
after the date on which the NAIC adopts an amended Model Act
and regulation to require the use of the proposed model
disclosure form issued by the Working Group under subsection
(b), each State shall require by statute or regulation any
issuer of a long-term care insurance policy to use the
proposed model disclosure form when marketing such a policy
in the State.

SEC. 8103. LTC INSURANCE COMPARE.

(a) In General.--Section 6021(d) of the Deficit Reduction
Act of 2005 (42 U.S.C. 1396p note) is amended--
(1) in paragraph (2)--
(A) in subparagraph (A)--
(i) in clause (ii), by striking ``and'' at the end;
(ii) in clause (iii), by striking the period at the end and
inserting ``; and''; and
(iii) by adding at the end the following:
``(iv) establish an Internet directory of information
regarding long-term care insurance, to be known as `LTC
Insurance Compare', that shall include the following:

``(I) Comparison tools to assist consumers in evaluating
long-term care insurance policies (as defined in subparagraph
(D)) with different benefits and features and that allow
consumers to compare the price, long-term premium stability,
and carrier financial strength of such policies.
``(II) State-specific information about the long-term care
insurance policies marketed in a State, including the
following:

``(aa) Whether a State has promulgated rate stability
provisions or has rate stability procedures in place, and how
the standards or procedures work.
``(bb) The rating history for at least the most recent
preceding 5 years for issuers selling long-term care
insurance policies in the State.
``(cc) An appropriate sampling of the policy forms marketed
in the State.

``(III) Links to State information regarding long-term care
under State Medicaid programs (which may be provided, as
appropriate, through Internet linkages to the websites of
State Medicaid programs) that includes the following:

``(aa) The medical assistance provided under each State's
Medicaid program for nursing facility services and other
long-term care services (including any functional criteria
imposed for receipt of such services, as reported in
accordance with section 1902(a)(28)(D) of the Social Security
Act) and any differences from benefits and services offered
under long-term care insurance policies in the State and the
criteria for triggering receipt of such benefits and
services.
``(bb) If the State has a qualified State long-term care
insurance partnership under section 1917(b)(1)(C)(iii) of the
Social Security Act, information regarding how and when an
individual with a partnership long-term care insurance policy
who is receiving benefits under the policy should apply for
medical assistance for nursing facility services or other
long-term care services under the State Medicaid program and
information regarding about how Medicaid asset protection is
accumulated over time.''; and
(B) by adding at the end the following:
``(C) Current information.--The Secretary of Health and
Human Services shall ensure that, to the greatest extent
practicable, the information maintained in the National
Clearinghouse for Long-Term Care Information, including the
information required for LTC Insurance Compare, is the most
recent information available.
``(D) Long-term care insurance policy defined.--In
subparagraph (A)(iv), the term `long-term care insurance
policy' means a qualified long-term care insurance contract
(as defined in section 7702B(b) of the Internal Revenue Code
of 1986), a qualified long-term care insurance contract that
covers an insured who is a resident of a State with a
qualified State long-term care insurance partnership under
clause (iii) of section 1917(b)(1)(C) of the Social Security
Act (42 U.S.C. 1396p(b)(1)(C)) or a long-term care insurance
policy offered in connection with a State plan amendment
described in clause (iv) of such section, and includes any
other insurance policy or rider described in the definition
of `long-term care insurance' in section 4 of the model Act
promulgated by the National Association of Insurance
Commissioners (as adopted December 2006).'';
(2) by redesignating paragraph (3) as paragraph (4); and
(3) by inserting after paragraph (2) the following:
``(3) Consultation on ltc insurance compare.--The Secretary
of Health and Human Services shall consult with the National
Association of Insurance Commissioners and the entities and
stakeholders specified in section 8101(d) of the Patient
Protection and Affordable Care Act in designing and
implementing the LTC Insurance Compare required under
paragraph (2)(A)(iv).''.
(b) Medicaid State Plan Requirement To Submit Nursing
Facility Services Functional Criteria Data.--Section
1902(a)(28) of the Social Security Act (42 U.S.C.
1396a(a)(28)) is amended--
(1) in subparagraph (C), by striking ``and'' after the
semicolon;
(2) in subparagraph (D)(iii), by adding ``and'' after the
semicolon; and
(3) by inserting after subparagraph (D)(iii), the following
new subparagraph:
``(E) for the annual submission of data relating to
functional criteria for the receipt of nursing facility
services under the plan (in such form and manner as the
Secretary shall specify);''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section take effect on the date of
enactment of this Act.
(2) Extension of effective date for state law amendment.--
In the case of a State plan under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.) which the Secretary of
Health and Human Services determines requires State
legislation or State regulation in order for the plan to meet
the additional requirements imposed by the amendments made by
subsection (b), the State plan shall not be regarded as
failing to comply with the requirements of such title solely
on the basis of its failure to meet these additional
requirements before the first day of the first calendar
quarter beginning after the close of the first regular
session of the State legislature that begins after the date
of enactment of this Act. For purposes of the previous
sentence, in the case of a State that has a 2-year
legislative session, each year of the session is considered
to be a separate regular session of the State legislature.

PART II--IMPROVED STATE CONSUMER PROTECTIONS FOR QUALIFIED LONG-TERM
CARE INSURANCE CONTRACTS AND MEDICAID PARTNERSHIP POLICIES

SEC. 8121. APPLICATION OF MEDICAID PARTNERSHIP REQUIRED MODEL
PROVISIONS TO ALL TAX-QUALIFIED LONG-TERM CARE
INSURANCE CONTRACTS.

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

SEC. 8122. STREAMLINED PROCESS FOR APPLYING NEW OR UPDATED
MODEL PROVISIONS.

(a) Secretarial Review.--
(1) Tax-qualified policies.--
(A) 2000 and 2006 model provisions.--Not later than 12
months after the date of enactment of this Act, the Secretary
of the Treasury, in consultation with the Secretary of Health
and Human Services, shall review the model provisions
specified in subsection (c)(1) for purposes of determining
whether updating any such provisions for a provision
specified in section 7702B(g)(2) of the Internal Revenue Code
of 1986, or the inclusion of any such provisions in such
section, for purposes of an insurance contract qualifying for
treatment as a qualified long-term care insurance contract
under such Code, would improve consumer protections for
insured individuals under such contracts.
(B) Subsequent model provisions.--Not later than 12 months
after model provisions described in paragraph (2) or (3) of
subsection (c) are adopted by the National Association of
Insurance Commissioners, the Secretary of the Treasury, in
consultation with the Secretary of Health and Human Services,
shall review the model provisions to determine whether the
application of such provisions to an insurance contract for
purposes of qualifying for treatment as a qualified long-term
care insurance contract under section 7702B(g)(2) of the
Internal Revenue Code of 1986, would improve consumer
protections for insured individuals under such contracts.
(2) Medicaid partnership policies.--
(A) Subsequent model provisions.--Not later than 12 months
after model provisions described in paragraph (2) or (3) of
subsection (c) are adopted by the National Association of
Insurance Commissioners, the Secretary of Health and Human
Services, in consultation with the Secretary of the Treasury,
shall review the model provisions to determine whether the
application of such provisions to an insurance contract for
purposes of satisfying the requirements for participation in
a qualified State long-term care insurance partnership under
section 1917(b)(1)(C)(iii) of such Act (42 U.S.C.
1396p(b)(1)(C)(iii)) would improve consumer protections for
insured individuals under such contracts.
(B) Review of other partnership requirements.--The
Secretary of Health and Human Services, in consultation with
the Secretary of the Treasury, shall review clauses (iii) and
(iv) of section 1917(b)(1)(C) for purposes of determining
whether the requirements specified in such clauses should be
modified to provide improved consumer protections or, as
appropriate, to resolve any conflicts with the application of
the 2006 model provisions under paragraph (5) of section
1917(b) (as amended by section 302(a)) or with the
application of any model provisions that the Secretary
determines should apply to an insurance contract as a result
of a review required under subparagraph (A).
(b) Expedited Rulemaking.--
(1) Tax-qualified policies.--Subject to paragraph (3), if
the Secretary of the Treasury determines that any model
provisions reviewed under subsection (a)(1) should apply

[[Page S12643]]

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

PART III--IMPROVED CONSUMER PROTECTIONS FOR MEDICAID PARTNERSHIP
POLICIES

SEC. 8131. BIENNIAL REPORTS ON IMPACT OF MEDICAID LONG-TERM
CARE INSURANCE PARTNERSHIPS.

Section 6021(c) of the Deficit Reduction Act of 2005 (42
U.S.C. 1396p note) is amended to read as follows:
``(c) Biennial Reports.--
``(1) In general.--Not later than January 1, 2011, and
biennially thereafter, the Secretary of Health and Human
Services (in this subsection referred to as the `Secretary')
shall issue a report to States and Congress on the long-term
care insurance partnerships established in accordance with
section 1917(b)(1)(C)(ii) of the Social Security Act (42
U.S.C. 1396p(b)(1)(C)(ii)). Each report shall include (with
respect to the period the report addresses) the following
information, nationally and on a State-specific basis:
``(A) Analyses of the extent to which such partnerships
improve access of individuals to affordable long-term care
services and benefits and the impact of such partnerships on
Federal and State expenditures on long-term care under the
Medicare and Medicaid programs.
``(B) Analyses of the impact of such partnerships on
consumer decisionmaking with respect to purchasing,
accessing, and retaining coverage under long-term care
insurance policies (as defined in subsection (d)(2)(D)),
including a description of the benefits and services offered
under such policies, the average premiums for coverage under
such policies, the number of policies sold and at what ages,
the number of policies retained and for how long, the number
of policies for which coverage was exhausted, and the number
of insured individuals who were determined eligible for
medical assistance under the State Medicaid program.
``(2) Data.--The reports by issuers of partnership long-
term care insurance policies required under section
1917(b)(1)(C)(iii)(VI) of the Social Security Act shall
include such data as the Secretary shall specify in order to
conduct the analyses required under paragraph (1).
``(3) Public availability.--The Secretary shall make each
report issued under this subsection publicly available
through the LTC Insurance Compare website required under
subsection (d).
``(4) Rule of construction.--Nothing in this section shall
be construed as requiring the Secretary to conduct an
independent review of each long-term care insurance policy
offered under or in connection with such a partnership.''.

SEC. 8132. ADDITIONAL CONSUMER PROTECTIONS FOR MEDICAID
PARTNERSHIPS.

(a) Application of 2006 Model Provisions.--
(1) Updating of 2000 requirements.--
(A) In general.--Section 1917(b)(5)(B)(i) of the Social
Security Act (42 U.S.C. 1396p(b)(5)(B)(i)) is amended by
striking ``October 2000'' and inserting ``December 2006''.
(B) Conforming amendments.--
(i) Subclause (XVII) of such section is amended by striking
``section 26'' and inserting ``section 28''.
(ii) Subclause (XVIII) of such section is amended by
striking ``section 29'' and inserting ``section 31''.
(iii) Subclause (XIX) of such section is amended by
striking ``section 30'' and inserting ``section 32''.
(2) Application to grandfathered partnerships.--Section
1917(b)(1)(C)(iv) of such Act (42 U.S.C. 1396p(b)(1)(C)(iv))
is amended by inserting ``, and the State satisfies the
requirements of paragraph (5)'' after ``2005''.
(b) Application of Producer Training Model Act
Requirements.--Section 1917(b)(1)(C) of such Act (42 U.S.C.
1396p(b)(1)(C)) is amended--
(1) in clause (iii)(V), by inserting ``and satisfies the
producer training requirements specified in section 9 of the
model Act specified in paragraph (5)'' after ``coverage of
long-term care''; and
(2) in clause (iv), as amended by subsection (a)(2), by
inserting ``clause (iii)(V) and'' before ``paragraph (5)''.
(c) Application of Additional Requirements for All
Partnerships.--Section 1917(b) of the Social Security Act (42
U.S.C. 1396p(b)) is amended--
(1) in paragraph (1)(C)--
(A) in clause (iii)--
(i) by inserting after subclause (VII) the following new
subclause:
``(VIII) The State satisfies the requirements of paragraph
(6).''; and
(ii) in the flush sentence at the end, by striking
``paragraph (5)'' and inserting ``paragraphs (5) and (6)'';
and
(B) in clause (iv), as amended by subsections (a)(2) and
(b)(2), by striking ``paragraph (5)'' and inserting
``paragraphs (5) and (6)''; and
(2) by adding at the end the following new paragraph:
``(6) For purposes of clauses (iii)(VIII) and (iv) of
paragraph (1)(C), the requirements of this paragraph are the
following:
``(A) The State requires issuers of long-term care
insurance policies to--
``(i) use marketing materials filed with the State for
purposes of the partnership in all sales and marketing
activities conducted or supported by the issuers in the State
with respect to any long-term care insurance policies
marketed by the issuer in the State;
``(ii) provide such materials to all agents selling long-
term care insurance policies in the State;
``(iii) ensure that agent training and education courses
conducted or supported by the issuers incorporate discussion
of marketing materials; and
``(iv) make such materials available to any consumer upon
request, and to make such materials available to all
prospective purchasers of a policy offered under a qualified
State long-term care insurance partnership before submission
of an application for coverage under that policy.
``(B) The State requires issuers of long-term care
insurance policies sold in the State to require agents to use
any inflation protection comparison form developed by the
National Association of Insurance Commissioners when selling
the policies in the State.
``(C) The State requires issuers of long-term care
insurance policies sold in the State to comply with the
provisions of section 8 of the model Act specified in
paragraph (5) relating to contingent nonforfeiture benefits.
``(D) The State enacts legislation, not later than January
1, 2012, that establishes rating standards for all issuers of
long-term care insurance policies sold in the State that
result in rates over the life of the policy that are no less
protective of consumers than those produced by the premium
rate schedule increase standards specified in section 20 of
the model regulation specified in paragraph (5), unless the
State has more stringent procedures or requirements.
``(E) The State develops and updates marketing materials
filed with the State whenever changes are made under the
State plan that relate to eligibility for medical assistance
for nursing facility services, including other long-term care
services or the amount, duration, or scope of medical
assistance for nursing facility services, and also provides
to

[[Page S12644]]

individuals at the time of application for medical assistance
under the State plan, or under a waiver of the plan materials
that describe in clear, simple language the terms of
eligibility, the benefits and services provided as such
assistance, and rules relating to adjustment or recovery from
the estate of an individual who receives such assistance.
Such materials shall include a clear disclosure that medical
assistance is not guaranteed to partnership policyholders who
exhaust benefits under a partnership policy, and that Federal
changes to the program under this title or State changes to
the State plan may affect an individual's eligibility for, or
receipt of, such assistance.
``(F) The State--
``(i) through the State Medicaid agency under section
1902(a)(5) and in consultation with the State insurance
department, develops materials explaining how the benefits
and rules of long-term care policies offered by issuers
participating in the partnership interact with the benefits
and rules under the State plan under this title;
``(ii) requires agents to use such materials when selling
or otherwise discussing how long-term care policies offered
by issuers participating in the partnership work with
potential purchasers and to provide the materials to any such
purchasers upon request;
``(iii) informs holders of such policies of any changes in
eligibility requirements under the State plan under this
title and of any changes in estate recovery rules under the
State plan as soon as practicable after such changes are made
at the time or at the time of application for medical
assistance; and
``(iv) agrees to honor the asset protections of any such
policy that were provided under the policy when purchased,
regardless of whether the State subsequently terminates a
partnership program under the State plan.
``(G) The State Medicaid agency under section 1902(a)(5)
and the State insurance department enter into a memorandum of
understanding to--
``(i) inform consumers about long-term care policies
offered by issuers participating in the partnership, the
amount, duration, or scope of medical assistance for nursing
facility services or other long-term care services offered
under the State plan, consumer protections, and any other
issues such agency and department determine appropriate
through such means as the State determines appropriate; and
``(ii) jointly facilitate coordination in eligibility
determinations for medical assistance under the State plan
and the provision of benefits or other services under such
policies and medical assistance provided under the State plan
that includes--
``(I) the number of policyholders applying for medical
assistance under the State plan; and
``(II) the number of policyholders deemed eligible (and, if
applicable, ineligible) for such assistance.
``(H) Subject to subparagraph (I), the State enters into
agreements with other States that have established qualified
State long-term care insurance partnerships under which such
States agree to provide reciprocity for policyholders under
such partnerships, including providing guaranteed asset
protection to all individuals covered under a policy offered
under a qualified State long-term care insurance partnership
who bought such a policy in the State or in another State
with such a partnership and with which the State has a
reciprocity agreement.
``(I)(i) In the case of a State described in paragraph
(1)(C)(iv) (in this subparagraph referred to as a
`grandfathered partnership State') --
``(I) the grandfathered partnership State may, in lieu of
entering into agreements that satisfy subparagraph (I), enter
into individual reciprocity agreements with other States that
have established qualified State long-term care insurance
partnerships; and
``(II) if the grandfathered partnership State has not, as
of January 1, 2013, entered into a reciprocity agreement with
each State that has a qualified State long-term care
insurance partnership, the grandfathered partnership State
shall enter into and comply with a reciprocity agreement
developed by the Secretary in accordance with clause (ii) for
each partnership State that the grandfathered State does not
have a reciprocity agreement with and, with respect to each
such State, for so long as the grandfathered partnership
State does not have an individual reciprocity agreement with
that State.
``(ii) In developing a reciprocity agreement for purposes
of clause (i)(II), the Secretary shall take into account--
``(I) the difference in consumer protections under the
partnership program of the grandfathered partnership State
and the other partnership State that will be covered by the
agreement, and, to the greatest extent possible, preserve the
more protective requirements; and
``(II) the impact the reciprocity agreement will have on
expenditures under the State plan under this title (including
under any waivers of such plan) of each such State and, to
the greatest extent possible, minimize any negative impact on
such expenditures and States.''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section take effect on the date that
is 1 year after the date of enactment of this Act.
(2) Extension of effective date for state law amendment.--
In the case of a State plan under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.) which the Secretary of
Health and Human Services determines requires State
legislation in order for the plan to meet the additional
requirements imposed by the amendments made by this section,
the State plan shall not be regarded as failing to comply
with the requirements of such title solely on the basis of
its failure to meet these additional requirements before the
first day of the first calendar quarter beginning after the
close of the first regular session of the State legislature
that begins after the date of enactment of this Act. For
purposes of the previous sentence, in the case of a State
that has a 2-year legislative session, each year of the
session is considered to be a separate regular session of the
State legislature.

SEC. 8133. REPORT TO CONGRESS REGARDING NEED FOR MINIMUM
ANNUAL COMPOUND INFLATION PROTECTION.

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

PART IV--PRESERVATION OF STATE AUTHORITY

SEC. 8141. PRESERVATION OF STATE AUTHORITY.

Nothing in this title, any amendments made by this title,
or any rules promulgated to carry out this title or such
amendments, shall be construed to limit the authority of a
State to enact, adopt, promulgate, and enforce any law, rule,
regulation, or other measure with respect to long-term care
insurance that is in addition to, or more stringent than,
requirements established under this title and the amendments
made by this title.
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