Senate Bill sb1924c2
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Florida Senate - 2006 CS for CS for SB 1924
By the Committees on Health and Human Services Appropriations;
Health Care; and Senators Peaden and Fasano
603-2417-06
1 A bill to be entitled
2 An act relating to long-term care coverage;
3 reenacting and amending s. 409.9102, F.S.;
4 directing the Agency for Health Care
5 Administration, in consultation with the Office
6 of Insurance Regulation and the Department of
7 Children and Family Services, to amend the
8 Medicaid state plan that established the
9 Florida Long-Term Care Partnership Program for
10 purposes of compliance with provisions of the
11 Social Security Act; establishing a qualified
12 state Long-Term Care Insurance Partnership
13 Program in Florida; providing duties of the
14 program; requiring consultation with the Office
15 of Insurance Regulation and the Department of
16 Children and Family Services for the creation
17 of standards for certain information; providing
18 rulemaking authority to the agency for
19 implementation of s. 409.9102, F.S.; providing
20 rulemaking authority to the department
21 regarding determination of eligibility for
22 certain services; creating s. 627.94075, F.S.;
23 providing rulemaking authority to the Financial
24 Services Commission for the implementation of a
25 qualified state Long-Term Care Insurance
26 Partnership Program in Florida; repealing ss. 1
27 and 2 of ch. 2005-252, Laws of Florida, to
28 delete conflicting provisions relating to the
29 determination of eligibility for nursing and
30 rehabilitative services and the establishment
31 of the Florida Long-Term Care Partnership
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1 Program that were contingent upon amendment to
2 the Social Security Act; amending s. 4 of ch.
3 2005-252, Laws of Florida, to delete a
4 contingency in an effective date; requiring the
5 Office of Program Policy Analysis and
6 Government Accountability to submit a report on
7 the implementation of a qualified state
8 Long-Term Care Insurance Partnership Program in
9 Florida to the Governor and Legislature;
10 creating s. 627.94076, F.S.; requiring
11 long-term care insurance policies to provide
12 incontestability after a certain time period;
13 providing an exception; amending s. 627.9403,
14 F.S.; specifying that certain limited benefit
15 policies are a type of long-term care insurance
16 policy; deleting an exemption from a minimum
17 time period coverage requirement for certain
18 limited benefit policies; amending s. 627.9404,
19 F.S.; revising definitions; amending s.
20 627.9407, F.S.; revising certain restrictions
21 on long-term care insurance policies; providing
22 additional rate structure requirements for
23 long-term care insurance policies; amending s.
24 641.2018, F.S.; correcting a cross-reference;
25 providing application; providing an
26 appropriation; providing an effective date.
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28 Be It Enacted by the Legislature of the State of Florida:
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1 Section 1. Section 409.9102, Florida Statutes, as
2 created by section 2 of chapter 2005-252, Laws of Florida, is
3 reenacted and amended to read:
4 (Substantial rewording of section. See
5 s. 409.9102, F.S., for present text.)
6 409.9102 A qualified state Long-Term Care Insurance
7 Partnership Program in Florida.--The Agency for Health Care
8 Administration, in consultation with the Office of Insurance
9 Regulation and the Department of Children and Family Services,
10 is directed to establish a qualified state Long-Term Care
11 Insurance Partnership Program in Florida, in compliance with
12 the requirements of s. 1917(b) of the Social Security Act, as
13 amended.
14 (1) The program shall:
15 (a) Provide incentives for an individual to obtain or
16 maintain insurance to cover the cost of long-term care.
17 (b) Provide a mechanism to qualify for coverage of the
18 costs of long-term care needs under Medicaid without first
19 being required to substantially exhaust his or her assets,
20 including a provision for the disregard of any assets in an
21 amount equal to the insurance benefit payments that are made
22 to or on behalf of an individual who is a beneficiary under
23 the program.
24 (c) Alleviate the financial burden on the state's
25 medical assistance program by encouraging the pursuit of
26 private initiatives.
27 (2) The Agency for Health Care Administration, in
28 consultation with the Office of Insurance Regulation and the
29 Department of Children and Family Services, and in accordance
30 with federal guidelines, shall create standards for long-term
31 care partnership program information distributed to
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1 individuals through insurance companies offering approved
2 long-term care partnership program policies.
3 (3) The Agency for Health Care Administration is
4 authorized to amend the Medicaid state plan and adopt rules
5 pursuant to ss. 120.536(1) and 120.54 to implement this
6 section.
7 (4) The Department of Children and Family Services,
8 when determining eligibility for Medicaid long-term care
9 services for an individual who is the beneficiary of an
10 approved long-term care partnership program policy, shall
11 reduce the total countable assets of the individual by an
12 amount equal to the insurance benefit payments that are made
13 to or on behalf of the individual. The department is
14 authorized to adopt rules pursuant to ss. 120.536(1) and
15 120.54 to implement this subsection.
16 Section 2. Section 627.94075, Florida Statutes, is
17 created to read:
18 627.94075 A qualified state Long-Term Care Insurance
19 Partnership Program in Florida.--The commission may adopt
20 rules pursuant to ss. 120.536(1) and 120.54 to implement
21 applicable provisions of a qualified state Long-Term Care
22 Insurance Partnership Program in Florida in accordance with
23 the requirements of s. 1917(b) of the Social Security Act, as
24 amended, any applicable federal guidelines, and any rules
25 necessary to ensure program compliance by insurers as provided
26 in s. 409.9102.
27 Section 3. Sections 1 and 2 of chapter 2005-252, Laws
28 of Florida, are repealed.
29 Section 4. Section 4 of chapter 2005-252, Laws of
30 Florida, is amended to read:
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1 Section 4. This act shall take effect upon becoming a
2 law, except that the amendments to section 409.905, Florida
3 Statutes, and the newly created section 409.9102, Florida
4 Statutes, provided in this act shall take effect contingent
5 upon amendment to section 1917(b)(1)(c) of the Social Security
6 Act by the United States Congress to delete the "May 14,
7 1993," deadline for approval by states of long-term care
8 partnership plans.
9 Section 5. The Office of Program Policy Analysis and
10 Government Accountability is directed to prepare a report on
11 the implementation of a qualified state Long-Term Care
12 Insurance Partnership Program in Florida. The report shall
13 include data on the number and value of policies sold and the
14 geographic areas in which the policies were purchased, a
15 demographic description of the policyholders, and other
16 information necessary to evaluate the program. The report
17 shall be provided to the Governor, the President of the
18 Senate, and the Speaker of the House of Representatives by
19 January 31, 2009.
20 Section 6. Section 627.94076, Florida Statutes, is
21 created to read:
22 627.94076 Time limit on certain
23 defenses.--Notwithstanding the provisions of s. 627.607, each
24 long-term care insurance policy shall provide that the policy
25 shall be incontestable after it has been in force during the
26 lifetime of the insured for a period of 2 years after its date
27 of issue except for nonpayment of premiums.
28 Section 7. Section 627.9403, Florida Statutes, is
29 amended to read:
30 627.9403 Scope.--The provisions of this part shall
31 apply to long-term care insurance policies delivered or issued
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1 for delivery in this state, and to policies delivered or
2 issued for delivery outside this state to the extent provided
3 in s. 627.9406, by an insurer, a fraternal benefit society as
4 defined in s. 632.601, a health maintenance organization as
5 defined in s. 641.19, a prepaid health clinic as defined in s.
6 641.402, or a multiple-employer welfare arrangement as defined
7 in s. 624.437. A policy which is advertised, marketed, or
8 offered as a long-term care policy and as a Medicare
9 supplement policy shall meet the requirements of this part and
10 the requirements of ss. 627.671-627.675 and, to the extent of
11 a conflict, be subject to the requirement that is more
12 favorable to the policyholder or certificateholder. The
13 provisions of this part shall not apply to a continuing care
14 contract issued pursuant to chapter 651 and shall not apply to
15 guaranteed renewable policies issued prior to October 1, 1988.
16 Any limited benefit policy that limits coverage to care in a
17 nursing home or to one or more lower levels of care required
18 or authorized to be provided by this part or by commission
19 rule is a type of long-term care insurance policy that must
20 meet all requirements of this part that apply to long-term
21 care insurance policies, except ss. 627.9407(3)(c), (9),
22 (10)(f), and (12) and 627.94073(2). If the limited benefit
23 policy does not provide coverage for care in a nursing home,
24 but does provide coverage for one or more lower levels of
25 care, the policy shall also be exempt from the requirements of
26 s. 627.9407(3)(d).
27 Section 8. Subsections (1) and (7) of section
28 627.9404, Florida Statutes, are amended to read:
29 627.9404 Definitions.--For the purposes of this part:
30 (1) "Long-term care insurance policy" means any
31 insurance policy or rider advertised, marketed, offered, or
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1 designed to provide coverage on an expense-incurred,
2 indemnity, prepaid, or other basis for one or more necessary
3 or medically necessary diagnostic, preventive, therapeutic,
4 curing, treating, mitigating, rehabilitative, maintenance, or
5 personal care services provided in a setting other than an
6 acute care unit of a hospital. Long-term care insurance shall
7 not include any insurance policy which is offered primarily to
8 provide basic Medicare supplement coverage, basic hospital
9 expense coverage, basic medical-surgical expense coverage,
10 hospital confinement indemnity coverage, major medical expense
11 coverage, disability income protection coverage, accident only
12 coverage, specified disease or specified accident coverage, or
13 limited benefit health insurance coverage not otherwise
14 defined as long-term care insurance.
15 (7) "Limited benefit policy" means any long-term care
16 insurance policy that limits coverage to care in a nursing
17 home or to one or more lower levels of care required or
18 authorized to be provided by this part or by commission rule.
19 Section 9. Subsections (3) and (7) of section
20 627.9407, Florida Statutes, are amended to read:
21 627.9407 Disclosure, advertising, and performance
22 standards for long-term care insurance.--
23 (3) RESTRICTIONS.--A long-term care insurance policy
24 may not:
25 (a) Be canceled, nonrenewed, or otherwise terminated
26 on the grounds of the age or the deterioration of the mental
27 or physical health of the insured individual or
28 certificateholder; however, the office may authorize
29 nonrenewal for an insurer on a statewide basis on terms and
30 conditions determined to be necessary by the office to protect
31 the interests of the insureds, if the insurer demonstrates
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1 that renewal will jeopardize the insurer's solvency or that
2 substantial and unexpected loss experience cannot reasonably
3 be mitigated or remedied.
4 (b) Contain a provision establishing a new waiting
5 period in the event existing coverage is converted to or
6 replaced by a new or other form within the same insurer or any
7 affiliated insurer, except with respect to an increase in
8 benefits voluntarily selected by the insured individual or
9 group policyholder.
10 (c) Restrict its coverage to care only in a nursing
11 home licensed pursuant to part II of chapter 400 or provide
12 significantly more coverage for such care than coverage for
13 lower levels of care. The commission shall adopt rules
14 defining what constitutes significantly more coverage in
15 nursing homes licensed pursuant to part II of chapter 400 than
16 for lower levels of care.
17 (d) Provide coverage for less than 24 consecutive
18 months for nursing home care for each covered person.
19 (d)(e) Contain an elimination period in excess of 180
20 days. As used in this paragraph, the term "elimination period"
21 means the number of days at the beginning of a period of
22 confinement for which no benefits are payable.
23 (7) RATE STRUCTURE.--
24 (a) A long-term care insurance policy may not be
25 issued if the premiums to be charged are calculated to
26 increase based solely on the age of the insured.
27 (b) Any long-term care insurance policy or certificate
28 issued or renewed, at the option of the policyholder or
29 certificateholder, shall make available to the insured the
30 contingent benefit upon lapse as provided in the Long-Term
31 Care Insurance Model Regulation adopted by the National
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1 Association of Insurance Commissioners in the second quarter
2 of the year 2000.
3 (c) Any premium increase for existing insureds shall
4 not result in a premium charged to the insureds that would
5 exceed the premium charged on a newly issued insurance policy,
6 except to reflect benefit differences. If the insurer is not
7 currently issuing new coverage, the new business rate shall be
8 as published by the office at the rate representing the new
9 business rate of insurers representing 80 percent of the
10 carriers currently issuing policies with similar coverage as
11 determined by the prior calendar year earned premium.
12 (d) Compliance with the pooling provisions of s.
13 627.410(6)(e)3. shall be determined by pooling the experience
14 of all affiliated insurers.
15 Section 10. Subsection (3) of section 641.2018,
16 Florida Statutes, is amended to read:
17 641.2018 Limited coverage for home health care
18 authorized.--
19 (3) Any contract that limits coverage to home health
20 care benefits as provided in this section must also meet all
21 of the requirements of ss. 627.9403-627.9408 of the Long-Term
22 Care Insurance Act, except s. 627.9407(3)(c), (d), and (9).
23 Section 11. This act shall apply to long-term care
24 insurance policies issued or renewed on or after July 1, 2006.
25 For any long-term care insurance policy issued prior to July
26 1, 2006, the provisions of section 5 shall apply to such
27 policy only upon renewal of such policy on or after July 1,
28 2008, and the policy shall so provide by endorsement to the
29 policy.
30 Section 12. For the 2006-2007 fiscal year, the sum of
31 $72,500 is appropriated from the Insurance Regulatory Trust
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1 Fund to the Office of Insurance Regulation for the purpose of
2 paying the salary and other administrative expenses for one
3 full-time equivalent position to implement the provisions of
4 this act.
5 Section 13. This act shall take effect upon becoming a
6 law.
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8 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
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11 Provides that a long-term care policy is incontestable after
begin in force for two years, except in instances of
12 non-payment of premium.
13 Prohibits an insurer from imposing a new waiting period when a
policy is replaced through an affiliated insurer.
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Eliminates the current minimum nursing home benefit of 24
15 months of coverage.
16 Requires all existing policyholders to be given an option to
receive contingent benefit options upon lapse in the event of
17 a significant rate increase. These options include a reduced
benefit plan for the existing premium amount, a paid-up policy
18 equal to the sum of premiums paid to date, or continuation of
current policy if the increased premiums are paid.
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Prohibits existing policyholders from being charged premiums
20 that exceed the premiums the insurer is charging to new
policyholders.
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Requires insurers to pool the claims experience of all
22 affiliated carriers when calculating rates, rather than only
the policy forms providing similar benefits of the insured.
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Provides an appropriation of $72,000 for one full time
24 equivalent position in the Office of Insurance Regulation
(OIR) to implement the provisions of the bill.
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