ARIZONA STATE SENATE
Forty-eighth Legislature, Second Regular Session
FINAL AMENDED
FACT SHEET FOR S.B. 1223
burden of proof; emergency treatment.
(NOW: insurance; long-term care)
Purpose
Adds training requirements for individuals who sell long-term care insurance and makes changes to preexisting condition limitations for long-term care insurance policies.
Background
Long-term care refers to the services needed when an individual’s ability to care for himself or herself has been limited due to a chronic illness or disability. Long-term care needs may be permanent or limited to a relatively short time. Some individuals require constant care in an institution such as a nursing home, while others may need assistance with activities of daily living such as bathing or eating.
Long-term care insurance is one way of paying for these services. Like other insurance programs, consumers pay premiums that vary depending on their age and health status and on the level of coverage, benefits and options selected. Benefits are claimed when long-term care services are needed, such as when a consumer must enter a nursing home, either permanently or temporarily. The General Accounting Office estimates that in 2004 private insurance accounted for 4 percent of total payments for long-term care, while Medicaid accounted for approximately 50 percent.
The Department of Insurance (DOI) regulates long-term care insurance in Arizona. Long-term care insurers are required to provide coverage for at least 24 consecutive months for each covered individual. Current statute prohibits a long-term care insurance policy from having a preexisting condition limitation period that exceeds six months after the effective date of coverage if the individual is 65 or older, or that exceeds 24 months after the effective date of coverage if the individual is under 65.
The 2005 federal Deficit Reduction Act (DRA) permits states to establish long-term care partnership programs if the states comply with federal requirements for program administration. Under the DRA, partnership programs are insurance policies in which Medicaid disregards an amount of assets or resources when determining eligibility for Medicaid equal to the insurance benefit payable under an insurance policy. The DRA requires state partnership programs to comply with model guidelines established by the National Association of Insurance Commissioners, including training requirements for individuals who sell long-term care insurance.
According to the Arizona Health Care Cost Containment System (AHCCCS), this legislation could result in cost savings if more individuals seek long-term care insurance coverage in the private market, delaying or preventing their enrollment in the Arizona Long-Term Care System.
Provisions
1. Specifies that the following changes apply to contracts, policies and evidences of coverage issued after December 31, 2008:
a) Prohibits a preexisting condition limitation period in a long-term care insurance policy or certificate from exceeding six months after the effective date of coverage of an insured for whom medical advice or treatment was recommended by a health care services provider.
b) Prohibits an individual long-term care insurance policy or certificate from excluding coverage for a loss or confinement that is the result of a preexisting condition unless it begins within six months after the effective date of coverage.
c) Defines “long-term care partnership program” as a qualified state long-term care insurance partnership that provides for the disregard of any assets in an amount equal to the insurance benefit payments made to an individual who is a beneficiary under a long-term care insurance policy.
2. Restricts an individual from selling, soliciting or negotiating long-term care insurance unless the person:
a) is licensed as an insurance producer for accident and health or sickness;
b) has completed eight hours of initial long-term care training; and
c) has completed four hours of long-term care training in each two-year period after July 1, 2009, after the individual completed the initial training.
3. Requires the individual to complete the training requirement through a continuing education course approved by DOI.
4. Requires the training course to consist of topics related to long-term care insurance, long-term care services and, if applicable, qualified state long-term care insurance partnership programs including the following:
a) state and federal rules and requirements and the relationship between qualified state long-term care insurance partnership programs and other public and private coverage of long-term care services, including Medicaid.
b) available long-term care services and providers.
c) changes or improvements in long-term care services or providers.
d) alternatives to the purchase of private long-term care insurance.
e) the effect of inflation on benefits and the importance of inflation protection.
f) consumer suitability standards and guidelines.
5. Requires a long-term care insurer to obtain verification that an insurance producer received the required training before the producer is permitted to sell, solicit or negotiate the insurer’s long-term care products.
6. Requires a long-term care insurer to maintain and make available to the Director of DOI sufficient records on the training of insurance producers to allow DOI to provide assurance to the AHCCCS Administration that the producers have received the required training.
7. Specifies that a nonresident insurance producer who completes a similar training requirement in another state satisfies these training requirements.
8. Makes technical and conforming changes.
9. Becomes effective on July 1, 2009, except as otherwise noted.
Amendments Adopted by House of Representatives
· Adopted the strike everything amendment.
Senate Action House Action
HEALTH 2/28/08 DP 5-1-1-0 HEALTH 4/9/08 DPA/SE 9-0-0-1-0
3rd Read 3/25/08 18-12-0-0 3rd Read 5/6/08 47-7-6-0
Final Read 5/14/08 20-7-3-0
Signed by the Governor 5/20/08
Chapter 230
Prepared by Senate Research
May 27, 2008
HO/jas