Bill > H822

This bill establishes a Medicaid Life Settlement Program, allowing individuals who own life insurance policies with a face value over $10,000 to enter into a life settlement contract, which is an agreement to sell their policy for cash. The proceeds from these contracts will be paid directly to healthcare providers for long-term care services, such as home health care, assisted living, and nursing home care, and will not be counted as a resource or asset when determining eligibility for Medicaid, a government health insurance program for low-income individuals. However, any available proceeds from the life settlement must be spent down on long-term care before state or federal Medicaid funds will cover the recipient's care, with a small portion (the lesser of 5% of the policy's face value or $5,000) reserved for final expenses. These proceeds must be held in a special irrevocable account for the benefit of the recipient, who has the sole right to choose the type of long-term care services. Life settlement providers must meet certain financial requirements, including maintaining a surety bond or equivalent, and their contract forms and marketing materials will be reviewed by the Department of Insurance. The Department of Health and Human Services will provide notice of these options to Medicaid applicants and is authorized to create rules to ensure the program's proper implementation, including that proceeds go directly to providers and that Medicaid eligibility is not affected by the remaining life settlement funds. Additionally, this bill exempts certain life settlement contracts from specific provisions and clarifies how claims against life settlement providers will be handled, while also ensuring that amounts received from these contracts are not taxed.