NY State Senate Bill 2013-S5721

Archive: Last Bill Status - In Senate Committee Health Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

Please enter your contact information

First Name

Last Name

Email Address

A valid email address is required.

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

Actions

View Actions

Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2014	referred to health
Jun 07, 2013	referred to health

2013-S5721 (ACTIVE) - Details

See Assembly Version of this Bill:: A7952
Current Committee:: Senate Health
Law Section:: Public Health Law
Laws Affected:: Add §21, Pub Health L

2013-S5721 (ACTIVE) - Summary

Relates to medicaid life settlements.

2013-S5721 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S5721

TITLE OF BILL:  An act to amend the public health law, in relation to
medicaid life settlements

PURPOSE:  The purpose of the bill is to allow individuals who are
about to access Medicaid to sell their life insurance policies
pursuant to a life settlement contract and use the proceeds of the
life settlement to directly pay for long term care expenses thereby
delaying entry into the Medicaid system.

SUMMARY OF PROVISIONS:  This bill would provide for the conversion of
a life insurance policy in to a Medicaid Life Settlement Plan,
pursuant to a regulated life settlement contract.

An owner of a life insurance policy would be allowed to enter into a
life settlement contract for the purposes of using the proceeds of
that settlement contract for expenses related to "long-term care
services." The proceeds of the life settlement contract would be held
in an irrevocable state or federally insured trust and used to pay
long term care expenses before an individual qualifies for Medicaid.

The bill would prohibit the proceeds from a life settlement contract
from being considered a resource in determining a Medicaid applicant's
eligibility and requires the funds to be used for long-term care
services only. The bill would also prohibit the expenditure of any

federal or state Medicaid funds before the proceeds of the trust are
exhausted.

The bill requires licensed life settlement providers to maintain a
bond or other form of security in the amount of $500,000. The bill
also requires that five percent of the face value of the policy or
$5,000, whichever is less, be reserved and payable to the owner's
estate for the purposes of funeral expenses.

JUSTIFICATION:  Many seniors who currently have in-force life
insurance policies never take full advantage of their assets market
value and instead let their policies lapse or abandon their policies
by ceasing to pay their monthly premiums.

This bill benefits Medicaid applicants with life policies by providing
them with a fair market value for their policies, as opposed to the
cash surrender value or nothing if they are forced to surrender or
otherwise terminate their policies in order to qualify for Medicaid.
This permits the individual, using their own funds, to have an
expanded choice of care, including such things as the level and type
of care that meets their needs, as well as the type and location of
the services or facility. Importantly, the individual who sells their
policy and applies the proceeds directly to pay for long term care
services will be deferred from going onto Medicaid for a considerable
period of time, in some cases, permanently.

This bill benefits long term care service providers through an
increase in badly needed private pay revenue, paid directly from the
trusts to the providers.


This bill will generate significant savings to the state by advising
the owners of a life insurance policy to convert their policies into a
Medicaid Life Settlement Plan instead of abandoning those policies or
letting them lapse. This legislation will substantially extend the
spend-down period of the life policy, on Medicaid qualified expenses,
delaying the individual's entry onto Medicaid for months or years.

LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS:  This bill will result in substantial savings to
the Medicaid program.

EFFECTIVE DATE:  This bill will take effect 90th day after it shall
have become a law.

2013-S5721 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5721

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              June 7, 2013
                               ___________

Introduced  by  Sen.  HANNON -- read twice and ordered printed, and when
  printed to be committed to the Committee on Health

AN ACT to amend the public health law,  in  relation  to  medicaid  life
  settlements

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The public health law is amended by adding a new section 21
to read as follows:
  S 21. MEDICAID LIFE SETTLEMENTS. (A) FOR  PURPOSES  OF  THIS  SECTION,
"LONG-TERM  CARE  SERVICES"  SHALL  INCLUDE  HOME  HEALTH CARE, ASSISTED
LIVING AND NURSING HOME SERVICES.
  (B) THE OWNER OF A POLICY, AS DEFINED IN  SUBSECTION  (P)  OF  SECTION
SEVEN  THOUSAND  EIGHT  HUNDRED  TWO  OF THE INSURANCE LAW WITH ANY FACE
AMOUNT IN EXCESS OF TEN THOUSAND DOLLARS, MAY ENTER INTO A LIFE  SETTLE-
MENT CONTRACT PURSUANT TO ARTICLE SEVENTY-EIGHT OF THE INSURANCE LAW, IN
EXCHANGE  FOR  PAYMENTS DIRECTLY TO A HEALTH CARE PROVIDER FOR LONG-TERM
CARE SERVICES FOR THE RECIPIENT OF SUCH SERVICES IN ACCORDANCE WITH THIS
SECTION.
  (C) THE PROCEEDS OF A LIFE SETTLEMENT CONTRACT ENTERED  INTO  PURSUANT
TO THIS SECTION SHALL NOT BE CONSIDERED A RESOURCE OR ASSET IN DETERMIN-
ING  A  MEDICAID APPLICANT'S OR RECIPIENT'S ELIGIBILITY FOR MEDICAID AND
SHALL ONLY BE USED AS ALLOWED FOR LONG-TERM CARE SERVICES IN  ACCORDANCE
WITH  THIS  SECTION.  NO STATE OR FEDERAL MEDICAID FUNDS CAN BE USED FOR
SUCH MEDICAID RECIPIENT'S CARE UNTIL SUCH AVAILABLE PROCEEDS  ARE  SPENT
DOWN, EXCEPT FOR THE AMOUNT PROVIDED FOR IN PARAGRAPH (I) OF SUBDIVISION
(D) OF THIS SECTION.
  (D)  IN  ADDITION  TO ANY REQUIREMENTS IN ARTICLE SEVENTY-EIGHT OF THE
INSURANCE LAW, ANY LIFE SETTLEMENT CONTRACT  ENTERED  INTO  PURSUANT  TO
THIS SECTION MUST PROVIDE FOR THE FOLLOWING:
  (I)  THAT  THE  LESSER  OF FIVE PERCENT OF THE FACE AMOUNT OF THE LIFE
INSURANCE OR FIVE THOUSAND DOLLARS IS RESERVED AND  BE  PAYABLE  TO  THE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11270-02-3

S. 5721                             2

OWNER'S  ESTATE  OR  A  NAMED  BENEFICIARY UPON THE DEATH OF THE INSURED
UNDER THE POLICY THAT IS THE SUBJECT OF THE LIFE SETTLEMENT CONTRACT FOR
FINAL EXPENSES; AND
  (II)  THAT  THE  BALANCE  OF  PROCEEDS OF THE LIFE SETTLEMENT CONTRACT
UNPAID AT THE DEATH OF THE INSURED MUST BE PAID TO THE OWNER'S ESTATE OR
A NAMED BENEFICIARY.
  (E) ALL PROCEEDS OF THE LIFE SETTLEMENT CONTRACT MUST BE  HELD  IN  AN
IRREVOCABLE  STATE  OR  FEDERALLY INSURED ACCOUNT FOR THE BENEFIT OF THE
RECIPIENT OF THE LONG-TERM CARE SERVICES AND ADMINISTERED IN  ACCORDANCE
WITH THIS SECTION.
  (F)  ONLY  A RECIPIENT OF LONG-TERM CARE SERVICES FOR WHOSE BENEFIT AN
OWNER ENTERS INTO A LIFE SETTLEMENT  CONTRACT  UNDER  THIS  SECTION  MAY
CHOOSE  THE  PROVIDER AND TYPE OF SERVICES PROVIDED TO THE RECIPIENT AND
PAID FOR OUT OF AN ACCOUNT DESCRIBED BY SUBDIVISION (D) OF THIS SECTION.
ANY ATTEMPT BY A PERSON TO REQUIRE THE RECIPIENT TO  CHOOSE  A  SPECIFIC
PROVIDER  IS  STRICTLY  PROHIBITED  AND  CONSTITUTES AN UNFAIR METHOD OF
COMPETITION OR AN UNFAIR OR DECEPTIVE ACT OR PRACTICE UNDER  THE  INSUR-
ANCE LAW.
  (G)  (I)  A  LIFE  SETTLEMENT PROVIDER ENTERING INTO A LIFE SETTLEMENT
CONTRACT PURSUANT TO THIS SECTION MUST MAINTAIN A SURETY  BOND  EXECUTED
AND ISSUED BY AN INSURER AUTHORIZED TO ISSUE SURETY BONDS IN THIS STATE,
A  POLICY  OF  ERRORS  AND  OMISSIONS  INSURANCE,  OR A DEPOSIT OF CASH,
CERTIFICATES OF DEPOSIT OR SECURITIES OR ANY COMBINATION THEREOF IN  THE
AMOUNT OF FIVE HUNDRED THOUSAND DOLLARS.
  (II)  NOTWITHSTANDING ANY PROVISION OF LAW, ANY CLAIM FROM AN OWNER OF
A POLICY, THE OWNER'S ESTATE, ANY BENEFICIARY, OR ANY OTHER PERSON  WITH
RESPECT  TO  THE LIFE SETTLEMENT CONTRACT MAY NOT EXCEED THE FACE AMOUNT
OF THE POLICY, LESS THE PROCEEDS PAID UNDER THE LIFE SETTLEMENT CONTRACT
AND THE TOTAL AMOUNT OF PREMIUMS PAID SUBSEQUENT TO  ENTERING  INTO  THE
LIFE  SETTLEMENT  CONTRACT.  ANY PAYMENT OF A CLAIM BY A LIFE SETTLEMENT
PROVIDER MUST BE MADE FROM THE FUNDS ESTABLISHED PURSUANT TO SUBDIVISION
(D) OF THIS SECTION.
  (III) FOR THE PURPOSES OF THIS SECTION, THE  PROVISIONS  OF  PARAGRAPH
SIX  OF  SUBSECTION  (B) OF SECTION FOUR HUNDRED ELEVEN OF THE INSURANCE
LAW SHALL NOT APPLY TO ANY POLICY THAT IS THE SUBJECT OF A LIFE  SETTLE-
MENT CONTRACT THAT HAS BEEN IN FORCE FOR FIVE YEARS OR MORE.
  (H)  THE  DEPARTMENT  SHALL,  AS PART OF THE APPLICATION FOR MEDICAID,
PROVIDE WRITTEN NOTICE OF THE OPTIONS TO ENTER INTO  A  LIFE  SETTLEMENT
CONTRACT AS PROVIDED IN THIS SECTION.
  (I) THE DEPARTMENT IS AUTHORIZED TO PROMULGATE JURISDICTIONALLY APPRO-
PRIATE RULES TO ENSURE THAT:
  (I)  PROCEEDS  FROM A LIFE SETTLEMENT CONTRACT ARE USED TO REIMBURSE A
PROVIDER OF LONG-TERM CARE SERVICES;
  (II) ELIGIBILITY AND NEED FOR MEDICAL ASSISTANCE ARE DETERMINED  WITH-
OUT  CONSIDERING THE BALANCE OF PROCEEDS FROM A LIFE SETTLEMENT CONTRACT
AS PROVIDED IN THIS SECTION; AND
  (III) PAYMENTS TO A  LONG-TERM  CARE  SERVICE  PROVIDER  ARE  MADE  IN
ACCORDANCE WITH THIS SECTION.
  (J) THE DEPARTMENT OF FINANCIAL SERVICES SHALL:
  (I)  CONDUCT  PERIODIC  EXAMINATIONS  OF EACH LIFE SETTLEMENT PROVIDER
WITH RESPECT TO ANY LIFE SETTLEMENT CONTRACTS ENTERED INTO  PURSUANT  TO
THIS  SECTION,  IN  ACCORDANCE WITH SECTION SEVEN THOUSAND EIGHT HUNDRED
EIGHT OF THE INSURANCE LAW;
  (II) REVIEW AND APPROVE LIFE SETTLEMENT CONTRACT  FORMS  ENTERED  INTO
PURSUANT  TO  THIS  SECTION,  IN  ACCORDANCE WITH SECTION SEVEN THOUSAND
EIGHT HUNDRED SIX OF THE INSURANCE LAW; AND

S. 5721                             3

  (III) REQUIRE ANY ADVERTISEMENTS USED BY A LIFE SETTLEMENT PROVIDER BE
FILED WITH THE DEPARTMENT OF FINANCIAL SERVICES.
  (K)  THE DEPARTMENT IS INSTRUCTED TO SEEK ANY STATE PLAN AMENDMENTS OR
FEDERAL WAIVERS THAT MAY BE REQUIRED TO IMPLEMENT THIS ACT.
  S 2. This act shall take effect on the ninetieth day  after  it  shall
have become a law.

Comments

Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.

Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Find your Senator and share your views on important issues.

Do you support this bill?

Senate Bill S5721

Sponsored By

Archive: Last Bill Status - In Senate Committee Health Committee

Actions

2013-S5721 (ACTIVE) - Details

2013-S5721 (ACTIVE) - Summary

2013-S5721 (ACTIVE) - Sponsor Memo

2013-S5721 (ACTIVE) - Bill Text download pdf

Comments

Do you support this bill?

Get Status Alerts for 2013-S5721

Senate Bill S5721

Share this bill

Sponsored By

Kemp Hannon

Archive: Last Bill Status - In Senate Committee Health Committee

Actions

2013-S5721 (ACTIVE) - Details

2013-S5721 (ACTIVE) - Summary

2013-S5721 (ACTIVE) - Sponsor Memo

2013-S5721 (ACTIVE) - Bill Text download pdf

Comments