CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Assembly Bill No. 2604Introduced by Assembly Member CalderonFebruary 18, 2022 An act to amend Section 22005.1 of the Welfare and Institutions Code, relating to long-term care. LEGISLATIVE COUNSEL'S DIGESTAB 2604, as introduced, Calderon. Long-term care insurance.Existing law establishes the California Partnership for Long-Term Care Program, administered by the State Department of Health Care Services, to link private long-term care insurance policies and health care service plan contracts that cover long-term care with the In-Home Supportive Services Program and the Medi-Cal program. Existing law requires a long-term care insurance policy or a health care service plan contract to contain certain provisions to certified by the department, including protection against loss of benefits due to inflation and a periodic record issued to the insured. Existing law requires an applicant to be offered one option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 5% each year over the previous year, as specified, and at least one lower-cost option.This bill would require that lower-cost option to provide, at a minimum, protection against inflation that automatically increases benefit levels by 3% each year over the previous year. The bill would require policyholders to be offered at least one specified option if a premium increases, including the option to reduce the daily benefit.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 22005.1 of the Welfare and Institutions Code is amended to read:22005.1. (a) The State Department of Health Care Services shall only certify a long-term care insurance policy that substantially meets the requirements of Chapter 2.6 (commencing with Section 10231) of Part 2 of Division 2 of the Insurance Code, except the requirements of Sections 10232.1, 10232.2, 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 Care Services shall only certify a health care service plan contract that has been approved by the Department of Managed Health Care 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 10231) 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 department pursuant to Section 22009.(3) Protection against loss of benefits due to inflation. An applicant shall be offered, at the time of purchase, the following options:(A) One option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 5 percent each year over the previous year, up to an age specified by the program.(B) At least one lower cost option. lower-cost option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 3 percent each year over the previous year.(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 Care Services or the State Department of Social Services and consistent with the purposes of this division.(c) (1) The State Department of Health Care Services may also certify a policy or certificate, or maintain certification of a previously issued policy or certificate that is modified for this purpose, with a per diem benefit of at least one hundred dollars ($100) per day for a nursing facility, residential care facility, and home care and community-based services, if the policy provides a lifetime maximum benefit of not less than seventy-three thousand dollars ($73,000). A policy or certificate certified pursuant to this subdivision shall provide, at a minimum, protection against inflation that automatically increases benefit levels by 3 percent each year over the previous year.(2) An insurer may offer a policy with the benefits described in paragraph (1) only if the insurer also offers the applicant policy benefits that provide at least a lifetime maximum benefit that, at the time of purchase, is equivalent in dollars to at least 365 times 70 percent of the average daily private pay rate for a nursing facility and a nursing facility per diem benefit of no less than 70 percent of the average daily private pay rate for a nursing facility.(3) Except for the lifetime maximum benefit and the nursing facility per diem benefit levels required by paragraphs (1) and (2), policies authorized by this subdivision shall comply with the standards described in paragraph (2) of subdivision (b).(d) If a premium increases, an insurer shall offer to policyholders at least one of the following options, which shall not result in a loss of partnership status:(1) Reduce the daily benefit, but not below 70 percent of the current average daily private pay rate for a nursing facility, as identified by the department.(2) Reduce the policy duration, but not below the equivalent of six months.(3) Increase the elimination period to no more than 120 days.(4) Convert a comprehensive policy to a facility-only policy.(5) Reduce the inflation protection escalator to a lower-cost option that does one of the following:(A) Provides protection pursuant to subparagraph (B) of paragraph (3) of subdivision (b).(B) Automatically increases each year by a fixed amount equal to 5 percent.(e) An insurer that elects to offer a lower-cost option pursuant to paragraph (5) of subdivision (d) shall allow a policyholder, regardless of the policys issue date, issue age, or present age, to retain their accrued daily benefit in effect at that time.(f) A partnership policyholder who experiences a 50-percent or greater increase in their premium over the life of the policy shall be able to retain their partnership-approved policy without the policy being subject to subparagraph (B) of paragraph (3) of subdivision (b) if the policyholder is 70 years of age or older and a level of inflation protection benefits of no lower than 1 percent each year over the previous year is offered.
CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Assembly Bill No. 2604Introduced by Assembly Member CalderonFebruary 18, 2022 An act to amend Section 22005.1 of the Welfare and Institutions Code, relating to long-term care. LEGISLATIVE COUNSEL'S DIGESTAB 2604, as introduced, Calderon. Long-term care insurance.Existing law establishes the California Partnership for Long-Term Care Program, administered by the State Department of Health Care Services, to link private long-term care insurance policies and health care service plan contracts that cover long-term care with the In-Home Supportive Services Program and the Medi-Cal program. Existing law requires a long-term care insurance policy or a health care service plan contract to contain certain provisions to certified by the department, including protection against loss of benefits due to inflation and a periodic record issued to the insured. Existing law requires an applicant to be offered one option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 5% each year over the previous year, as specified, and at least one lower-cost option.This bill would require that lower-cost option to provide, at a minimum, protection against inflation that automatically increases benefit levels by 3% each year over the previous year. The bill would require policyholders to be offered at least one specified option if a premium increases, including the option to reduce the daily benefit.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION
Assembly Bill
No. 2604
Introduced by Assembly Member CalderonFebruary 18, 2022
Introduced by Assembly Member Calderon
February 18, 2022
An act to amend Section 22005.1 of the Welfare and Institutions Code, relating to long-term care.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
AB 2604, as introduced, Calderon. Long-term care insurance.
Existing law establishes the California Partnership for Long-Term Care Program, administered by the State Department of Health Care Services, to link private long-term care insurance policies and health care service plan contracts that cover long-term care with the In-Home Supportive Services Program and the Medi-Cal program. Existing law requires a long-term care insurance policy or a health care service plan contract to contain certain provisions to certified by the department, including protection against loss of benefits due to inflation and a periodic record issued to the insured. Existing law requires an applicant to be offered one option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 5% each year over the previous year, as specified, and at least one lower-cost option.This bill would require that lower-cost option to provide, at a minimum, protection against inflation that automatically increases benefit levels by 3% each year over the previous year. The bill would require policyholders to be offered at least one specified option if a premium increases, including the option to reduce the daily benefit.
Existing law establishes the California Partnership for Long-Term Care Program, administered by the State Department of Health Care Services, to link private long-term care insurance policies and health care service plan contracts that cover long-term care with the In-Home Supportive Services Program and the Medi-Cal program. Existing law requires a long-term care insurance policy or a health care service plan contract to contain certain provisions to certified by the department, including protection against loss of benefits due to inflation and a periodic record issued to the insured. Existing law requires an applicant to be offered one option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 5% each year over the previous year, as specified, and at least one lower-cost option.
This bill would require that lower-cost option to provide, at a minimum, protection against inflation that automatically increases benefit levels by 3% each year over the previous year. The bill would require policyholders to be offered at least one specified option if a premium increases, including the option to reduce the daily benefit.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. Section 22005.1 of the Welfare and Institutions Code is amended to read:22005.1. (a) The State Department of Health Care Services shall only certify a long-term care insurance policy that substantially meets the requirements of Chapter 2.6 (commencing with Section 10231) of Part 2 of Division 2 of the Insurance Code, except the requirements of Sections 10232.1, 10232.2, 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 Care Services shall only certify a health care service plan contract that has been approved by the Department of Managed Health Care 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 10231) 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 department pursuant to Section 22009.(3) Protection against loss of benefits due to inflation. An applicant shall be offered, at the time of purchase, the following options:(A) One option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 5 percent each year over the previous year, up to an age specified by the program.(B) At least one lower cost option. lower-cost option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 3 percent each year over the previous year.(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 Care Services or the State Department of Social Services and consistent with the purposes of this division.(c) (1) The State Department of Health Care Services may also certify a policy or certificate, or maintain certification of a previously issued policy or certificate that is modified for this purpose, with a per diem benefit of at least one hundred dollars ($100) per day for a nursing facility, residential care facility, and home care and community-based services, if the policy provides a lifetime maximum benefit of not less than seventy-three thousand dollars ($73,000). A policy or certificate certified pursuant to this subdivision shall provide, at a minimum, protection against inflation that automatically increases benefit levels by 3 percent each year over the previous year.(2) An insurer may offer a policy with the benefits described in paragraph (1) only if the insurer also offers the applicant policy benefits that provide at least a lifetime maximum benefit that, at the time of purchase, is equivalent in dollars to at least 365 times 70 percent of the average daily private pay rate for a nursing facility and a nursing facility per diem benefit of no less than 70 percent of the average daily private pay rate for a nursing facility.(3) Except for the lifetime maximum benefit and the nursing facility per diem benefit levels required by paragraphs (1) and (2), policies authorized by this subdivision shall comply with the standards described in paragraph (2) of subdivision (b).(d) If a premium increases, an insurer shall offer to policyholders at least one of the following options, which shall not result in a loss of partnership status:(1) Reduce the daily benefit, but not below 70 percent of the current average daily private pay rate for a nursing facility, as identified by the department.(2) Reduce the policy duration, but not below the equivalent of six months.(3) Increase the elimination period to no more than 120 days.(4) Convert a comprehensive policy to a facility-only policy.(5) Reduce the inflation protection escalator to a lower-cost option that does one of the following:(A) Provides protection pursuant to subparagraph (B) of paragraph (3) of subdivision (b).(B) Automatically increases each year by a fixed amount equal to 5 percent.(e) An insurer that elects to offer a lower-cost option pursuant to paragraph (5) of subdivision (d) shall allow a policyholder, regardless of the policys issue date, issue age, or present age, to retain their accrued daily benefit in effect at that time.(f) A partnership policyholder who experiences a 50-percent or greater increase in their premium over the life of the policy shall be able to retain their partnership-approved policy without the policy being subject to subparagraph (B) of paragraph (3) of subdivision (b) if the policyholder is 70 years of age or older and a level of inflation protection benefits of no lower than 1 percent each year over the previous year is offered.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. Section 22005.1 of the Welfare and Institutions Code is amended to read:22005.1. (a) The State Department of Health Care Services shall only certify a long-term care insurance policy that substantially meets the requirements of Chapter 2.6 (commencing with Section 10231) of Part 2 of Division 2 of the Insurance Code, except the requirements of Sections 10232.1, 10232.2, 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 Care Services shall only certify a health care service plan contract that has been approved by the Department of Managed Health Care 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 10231) 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 department pursuant to Section 22009.(3) Protection against loss of benefits due to inflation. An applicant shall be offered, at the time of purchase, the following options:(A) One option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 5 percent each year over the previous year, up to an age specified by the program.(B) At least one lower cost option. lower-cost option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 3 percent each year over the previous year.(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 Care Services or the State Department of Social Services and consistent with the purposes of this division.(c) (1) The State Department of Health Care Services may also certify a policy or certificate, or maintain certification of a previously issued policy or certificate that is modified for this purpose, with a per diem benefit of at least one hundred dollars ($100) per day for a nursing facility, residential care facility, and home care and community-based services, if the policy provides a lifetime maximum benefit of not less than seventy-three thousand dollars ($73,000). A policy or certificate certified pursuant to this subdivision shall provide, at a minimum, protection against inflation that automatically increases benefit levels by 3 percent each year over the previous year.(2) An insurer may offer a policy with the benefits described in paragraph (1) only if the insurer also offers the applicant policy benefits that provide at least a lifetime maximum benefit that, at the time of purchase, is equivalent in dollars to at least 365 times 70 percent of the average daily private pay rate for a nursing facility and a nursing facility per diem benefit of no less than 70 percent of the average daily private pay rate for a nursing facility.(3) Except for the lifetime maximum benefit and the nursing facility per diem benefit levels required by paragraphs (1) and (2), policies authorized by this subdivision shall comply with the standards described in paragraph (2) of subdivision (b).(d) If a premium increases, an insurer shall offer to policyholders at least one of the following options, which shall not result in a loss of partnership status:(1) Reduce the daily benefit, but not below 70 percent of the current average daily private pay rate for a nursing facility, as identified by the department.(2) Reduce the policy duration, but not below the equivalent of six months.(3) Increase the elimination period to no more than 120 days.(4) Convert a comprehensive policy to a facility-only policy.(5) Reduce the inflation protection escalator to a lower-cost option that does one of the following:(A) Provides protection pursuant to subparagraph (B) of paragraph (3) of subdivision (b).(B) Automatically increases each year by a fixed amount equal to 5 percent.(e) An insurer that elects to offer a lower-cost option pursuant to paragraph (5) of subdivision (d) shall allow a policyholder, regardless of the policys issue date, issue age, or present age, to retain their accrued daily benefit in effect at that time.(f) A partnership policyholder who experiences a 50-percent or greater increase in their premium over the life of the policy shall be able to retain their partnership-approved policy without the policy being subject to subparagraph (B) of paragraph (3) of subdivision (b) if the policyholder is 70 years of age or older and a level of inflation protection benefits of no lower than 1 percent each year over the previous year is offered.
SECTION 1. Section 22005.1 of the Welfare and Institutions Code is amended to read:
### SECTION 1.
22005.1. (a) The State Department of Health Care Services shall only certify a long-term care insurance policy that substantially meets the requirements of Chapter 2.6 (commencing with Section 10231) of Part 2 of Division 2 of the Insurance Code, except the requirements of Sections 10232.1, 10232.2, 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 Care Services shall only certify a health care service plan contract that has been approved by the Department of Managed Health Care 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 10231) 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 department pursuant to Section 22009.(3) Protection against loss of benefits due to inflation. An applicant shall be offered, at the time of purchase, the following options:(A) One option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 5 percent each year over the previous year, up to an age specified by the program.(B) At least one lower cost option. lower-cost option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 3 percent each year over the previous year.(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 Care Services or the State Department of Social Services and consistent with the purposes of this division.(c) (1) The State Department of Health Care Services may also certify a policy or certificate, or maintain certification of a previously issued policy or certificate that is modified for this purpose, with a per diem benefit of at least one hundred dollars ($100) per day for a nursing facility, residential care facility, and home care and community-based services, if the policy provides a lifetime maximum benefit of not less than seventy-three thousand dollars ($73,000). A policy or certificate certified pursuant to this subdivision shall provide, at a minimum, protection against inflation that automatically increases benefit levels by 3 percent each year over the previous year.(2) An insurer may offer a policy with the benefits described in paragraph (1) only if the insurer also offers the applicant policy benefits that provide at least a lifetime maximum benefit that, at the time of purchase, is equivalent in dollars to at least 365 times 70 percent of the average daily private pay rate for a nursing facility and a nursing facility per diem benefit of no less than 70 percent of the average daily private pay rate for a nursing facility.(3) Except for the lifetime maximum benefit and the nursing facility per diem benefit levels required by paragraphs (1) and (2), policies authorized by this subdivision shall comply with the standards described in paragraph (2) of subdivision (b).(d) If a premium increases, an insurer shall offer to policyholders at least one of the following options, which shall not result in a loss of partnership status:(1) Reduce the daily benefit, but not below 70 percent of the current average daily private pay rate for a nursing facility, as identified by the department.(2) Reduce the policy duration, but not below the equivalent of six months.(3) Increase the elimination period to no more than 120 days.(4) Convert a comprehensive policy to a facility-only policy.(5) Reduce the inflation protection escalator to a lower-cost option that does one of the following:(A) Provides protection pursuant to subparagraph (B) of paragraph (3) of subdivision (b).(B) Automatically increases each year by a fixed amount equal to 5 percent.(e) An insurer that elects to offer a lower-cost option pursuant to paragraph (5) of subdivision (d) shall allow a policyholder, regardless of the policys issue date, issue age, or present age, to retain their accrued daily benefit in effect at that time.(f) A partnership policyholder who experiences a 50-percent or greater increase in their premium over the life of the policy shall be able to retain their partnership-approved policy without the policy being subject to subparagraph (B) of paragraph (3) of subdivision (b) if the policyholder is 70 years of age or older and a level of inflation protection benefits of no lower than 1 percent each year over the previous year is offered.
22005.1. (a) The State Department of Health Care Services shall only certify a long-term care insurance policy that substantially meets the requirements of Chapter 2.6 (commencing with Section 10231) of Part 2 of Division 2 of the Insurance Code, except the requirements of Sections 10232.1, 10232.2, 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 Care Services shall only certify a health care service plan contract that has been approved by the Department of Managed Health Care 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 10231) 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 department pursuant to Section 22009.(3) Protection against loss of benefits due to inflation. An applicant shall be offered, at the time of purchase, the following options:(A) One option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 5 percent each year over the previous year, up to an age specified by the program.(B) At least one lower cost option. lower-cost option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 3 percent each year over the previous year.(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 Care Services or the State Department of Social Services and consistent with the purposes of this division.(c) (1) The State Department of Health Care Services may also certify a policy or certificate, or maintain certification of a previously issued policy or certificate that is modified for this purpose, with a per diem benefit of at least one hundred dollars ($100) per day for a nursing facility, residential care facility, and home care and community-based services, if the policy provides a lifetime maximum benefit of not less than seventy-three thousand dollars ($73,000). A policy or certificate certified pursuant to this subdivision shall provide, at a minimum, protection against inflation that automatically increases benefit levels by 3 percent each year over the previous year.(2) An insurer may offer a policy with the benefits described in paragraph (1) only if the insurer also offers the applicant policy benefits that provide at least a lifetime maximum benefit that, at the time of purchase, is equivalent in dollars to at least 365 times 70 percent of the average daily private pay rate for a nursing facility and a nursing facility per diem benefit of no less than 70 percent of the average daily private pay rate for a nursing facility.(3) Except for the lifetime maximum benefit and the nursing facility per diem benefit levels required by paragraphs (1) and (2), policies authorized by this subdivision shall comply with the standards described in paragraph (2) of subdivision (b).(d) If a premium increases, an insurer shall offer to policyholders at least one of the following options, which shall not result in a loss of partnership status:(1) Reduce the daily benefit, but not below 70 percent of the current average daily private pay rate for a nursing facility, as identified by the department.(2) Reduce the policy duration, but not below the equivalent of six months.(3) Increase the elimination period to no more than 120 days.(4) Convert a comprehensive policy to a facility-only policy.(5) Reduce the inflation protection escalator to a lower-cost option that does one of the following:(A) Provides protection pursuant to subparagraph (B) of paragraph (3) of subdivision (b).(B) Automatically increases each year by a fixed amount equal to 5 percent.(e) An insurer that elects to offer a lower-cost option pursuant to paragraph (5) of subdivision (d) shall allow a policyholder, regardless of the policys issue date, issue age, or present age, to retain their accrued daily benefit in effect at that time.(f) A partnership policyholder who experiences a 50-percent or greater increase in their premium over the life of the policy shall be able to retain their partnership-approved policy without the policy being subject to subparagraph (B) of paragraph (3) of subdivision (b) if the policyholder is 70 years of age or older and a level of inflation protection benefits of no lower than 1 percent each year over the previous year is offered.
22005.1. (a) The State Department of Health Care Services shall only certify a long-term care insurance policy that substantially meets the requirements of Chapter 2.6 (commencing with Section 10231) of Part 2 of Division 2 of the Insurance Code, except the requirements of Sections 10232.1, 10232.2, 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 Care Services shall only certify a health care service plan contract that has been approved by the Department of Managed Health Care 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 10231) 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 department pursuant to Section 22009.(3) Protection against loss of benefits due to inflation. An applicant shall be offered, at the time of purchase, the following options:(A) One option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 5 percent each year over the previous year, up to an age specified by the program.(B) At least one lower cost option. lower-cost option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 3 percent each year over the previous year.(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 Care Services or the State Department of Social Services and consistent with the purposes of this division.(c) (1) The State Department of Health Care Services may also certify a policy or certificate, or maintain certification of a previously issued policy or certificate that is modified for this purpose, with a per diem benefit of at least one hundred dollars ($100) per day for a nursing facility, residential care facility, and home care and community-based services, if the policy provides a lifetime maximum benefit of not less than seventy-three thousand dollars ($73,000). A policy or certificate certified pursuant to this subdivision shall provide, at a minimum, protection against inflation that automatically increases benefit levels by 3 percent each year over the previous year.(2) An insurer may offer a policy with the benefits described in paragraph (1) only if the insurer also offers the applicant policy benefits that provide at least a lifetime maximum benefit that, at the time of purchase, is equivalent in dollars to at least 365 times 70 percent of the average daily private pay rate for a nursing facility and a nursing facility per diem benefit of no less than 70 percent of the average daily private pay rate for a nursing facility.(3) Except for the lifetime maximum benefit and the nursing facility per diem benefit levels required by paragraphs (1) and (2), policies authorized by this subdivision shall comply with the standards described in paragraph (2) of subdivision (b).(d) If a premium increases, an insurer shall offer to policyholders at least one of the following options, which shall not result in a loss of partnership status:(1) Reduce the daily benefit, but not below 70 percent of the current average daily private pay rate for a nursing facility, as identified by the department.(2) Reduce the policy duration, but not below the equivalent of six months.(3) Increase the elimination period to no more than 120 days.(4) Convert a comprehensive policy to a facility-only policy.(5) Reduce the inflation protection escalator to a lower-cost option that does one of the following:(A) Provides protection pursuant to subparagraph (B) of paragraph (3) of subdivision (b).(B) Automatically increases each year by a fixed amount equal to 5 percent.(e) An insurer that elects to offer a lower-cost option pursuant to paragraph (5) of subdivision (d) shall allow a policyholder, regardless of the policys issue date, issue age, or present age, to retain their accrued daily benefit in effect at that time.(f) A partnership policyholder who experiences a 50-percent or greater increase in their premium over the life of the policy shall be able to retain their partnership-approved policy without the policy being subject to subparagraph (B) of paragraph (3) of subdivision (b) if the policyholder is 70 years of age or older and a level of inflation protection benefits of no lower than 1 percent each year over the previous year is offered.
22005.1. (a) The State Department of Health Care Services shall only certify a long-term care insurance policy that substantially meets the requirements of Chapter 2.6 (commencing with Section 10231) of Part 2 of Division 2 of the Insurance Code, except the requirements of Sections 10232.1, 10232.2, 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 Care Services shall only certify a health care service plan contract that has been approved by the Department of Managed Health Care 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 10231) 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 department pursuant to Section 22009.
(3) Protection against loss of benefits due to inflation. An applicant shall be offered, at the time of purchase, the following options:
(A) One option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 5 percent each year over the previous year, up to an age specified by the program.
(B) At least one lower cost option. lower-cost option that provides, at a minimum, protection against inflation that automatically increases benefit levels by 3 percent each year over the previous year.
(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 Care Services or the State Department of Social Services and consistent with the purposes of this division.
(c) (1) The State Department of Health Care Services may also certify a policy or certificate, or maintain certification of a previously issued policy or certificate that is modified for this purpose, with a per diem benefit of at least one hundred dollars ($100) per day for a nursing facility, residential care facility, and home care and community-based services, if the policy provides a lifetime maximum benefit of not less than seventy-three thousand dollars ($73,000). A policy or certificate certified pursuant to this subdivision shall provide, at a minimum, protection against inflation that automatically increases benefit levels by 3 percent each year over the previous year.
(2) An insurer may offer a policy with the benefits described in paragraph (1) only if the insurer also offers the applicant policy benefits that provide at least a lifetime maximum benefit that, at the time of purchase, is equivalent in dollars to at least 365 times 70 percent of the average daily private pay rate for a nursing facility and a nursing facility per diem benefit of no less than 70 percent of the average daily private pay rate for a nursing facility.
(3) Except for the lifetime maximum benefit and the nursing facility per diem benefit levels required by paragraphs (1) and (2), policies authorized by this subdivision shall comply with the standards described in paragraph (2) of subdivision (b).
(d) If a premium increases, an insurer shall offer to policyholders at least one of the following options, which shall not result in a loss of partnership status:
(1) Reduce the daily benefit, but not below 70 percent of the current average daily private pay rate for a nursing facility, as identified by the department.
(2) Reduce the policy duration, but not below the equivalent of six months.
(3) Increase the elimination period to no more than 120 days.
(4) Convert a comprehensive policy to a facility-only policy.
(5) Reduce the inflation protection escalator to a lower-cost option that does one of the following:
(A) Provides protection pursuant to subparagraph (B) of paragraph (3) of subdivision (b).
(B) Automatically increases each year by a fixed amount equal to 5 percent.
(e) An insurer that elects to offer a lower-cost option pursuant to paragraph (5) of subdivision (d) shall allow a policyholder, regardless of the policys issue date, issue age, or present age, to retain their accrued daily benefit in effect at that time.
(f) A partnership policyholder who experiences a 50-percent or greater increase in their premium over the life of the policy shall be able to retain their partnership-approved policy without the policy being subject to subparagraph (B) of paragraph (3) of subdivision (b) if the policyholder is 70 years of age or older and a level of inflation protection benefits of no lower than 1 percent each year over the previous year is offered.