Introduced Version
HOUSE BILL No. 1221
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 12-15.
Synopsis: Life insurance and Medicaid. Allows the state to use federal
or state Medicaid funds to pay life insurance premiums and expenses
for a Medicaid applicant or recipient who has irrevocably named the
state as the beneficiary of a life insurance policy or assigned a life
insurance policy to the state. Provides that the value of a life insurance
policy owned by an applicant or recipient may not be considered in
determining Medicaid eligibility if the applicant or recipient has
irrevocably named the state as the beneficiary or assigned the life
insurance policy to the state.
Effective: July 1, 2011.
Brown T
January 12, 2011, read first time and referred to Committee on Public Health.
Introduced
First Regular Session 117th General Assembly (2011)
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HOUSE BILL No. 1221
A BILL FOR AN ACT to amend the Indiana Code concerning
human services.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 12-15-1-21; (11)IN1221.1.1. -->
SECTION 1. IC 12-15-1-21 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2011]: Sec. 21. To the extent allowed by federal law, the office
may use federal or state funds under the Medicaid program to pay
premiums and other expenses related to a life insurance policy that
is owned by an applicant or a recipient who has:
(1) made an irrevocable election to name the state as the
beneficiary of the life insurance policy; or
(2) assigned the life insurance policy to the state.
SOURCE: IC 12-15-2-17; (11)IN1221.1.2. -->
SECTION 2. IC 12-15-2-17 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 17. (a) Except as
provided in subsections (b) and (d), if an applicant for or a recipient of
Medicaid:
(1) establishes one (1) irrevocable trust that has a value of not
more than ten thousand dollars ($10,000), exclusive of interest,
and is established for the sole purpose of providing money for the
burial of the applicant or recipient;
(2) enters into an irrevocable prepaid funeral agreement having a
value of not more than ten thousand dollars ($10,000); or
(3) owns a life insurance policy with a face value of not more than
ten thousand dollars ($10,000) and with respect to which
provision is made to pay not more than ten thousand dollars
($10,000) toward the applicant's or recipient's funeral expenses;
the value of the trust, prepaid funeral agreement, or life insurance
policy may not be considered as a resource in determining the
applicant's or recipient's eligibility for Medicaid.
(b) Subject to subsection (d), if an applicant for or a recipient of
Medicaid establishes an irrevocable trust or escrow under IC 30-2-13,
the entire value of the trust or escrow may not be considered as a
resource in determining the applicant's or recipient's eligibility for
Medicaid.
(c) Except as provided in IC 12-15-3-7, if an applicant for or a
recipient of Medicaid owns resources described in subsection (a) and
the total value of those resources is more than ten thousand dollars
($10,000), the value of those resources that is more than ten thousand
dollars ($10,000) may be considered as a resource in determining the
applicant's or recipient's eligibility for Medicaid.
(d) In order for a trust, an escrow, a life insurance policy, or a
prepaid funeral agreement to be exempt as a resource in determining
an applicant's or a recipient's eligibility for Medicaid under this section,
the applicant or recipient must designate the office or the applicant's or
recipient's estate to receive any remaining amounts after delivery of all
services and merchandise under the contract as reimbursement for
Medicaid assistance provided to the applicant or recipient after
fifty-five (55) years of age. The office may receive funds under this
subsection only to the extent permitted by 42 U.S.C. 1396p. The
computation of remaining amounts shall be made as of the date of
delivery of services and merchandise under the contract and must be
the excess, if any, derived from:
(1) growth in principal;
(2) accumulation and reinvestment of dividends;
(3) accumulation and reinvestment of interest; and
(4) accumulation and reinvestment of distributions;
on the applicant's or recipient's trust, escrow, life insurance policy, or
prepaid funeral agreement over and above the seller's current retail
price of all services, merchandise, and cash advance items set forth in
the applicant's or recipient's contract.
SOURCE: IC 12-15-3-1; (11)IN1221.1.3. -->
SECTION 3. IC 12-15-3-1, AS AMENDED BY P.L.246-2005,
SECTION 104, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2011]: Sec. 1. (a) Except as provided in
subsections (b) and (c) and section 7 of this chapter, an applicant for
or recipient of Medicaid is ineligible for assistance if the total cash
value of money, stock, bonds, and life insurance owned by:
(1) the applicant or recipient is more than one thousand five
hundred dollars ($1,500) for assistance to the aged, blind, or
disabled; or
(2) the applicant or recipient and the applicant's or recipient's
spouse is more than two thousand two hundred fifty dollars
($2,250) for medical assistance to the aged, blind, or disabled.
(b) In the case of an applicant who is an eligible individual, a
Holocaust victim's settlement payment received by the applicant or the
applicant's spouse may not be considered when calculating the total
cash value of money, stock, bonds, and life insurance owned by the
applicant or the applicant's spouse.
(c) In the case of an individual who:
(1) resides in a nursing facility or another medical institution; and
(2) has a spouse who does not reside in a nursing facility or
another medical institution;
the total cash value of money, stock, bonds, and life insurance that may
be owned by the couple to be eligible for the program is determined
under IC 12-15-2-24.
SOURCE: IC 12-15-3-2; (11)IN1221.1.4. -->
SECTION 4. IC 12-15-3-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 2. (a) Except as
provided in section 7 of this chapter, if the parent of an applicant for
or a recipient of assistance to the blind or disabled who is less than
eighteen (18) years of age owns money, stock, bonds, and life
insurance whose total cash value is more than one thousand five
hundred dollars ($1,500), the amount of the excess shall be added to
the total cash value of money, stock, bonds, and life insurance owned
by the applicant or recipient to determine the recipient's eligibility for
Medicaid under section 1 of this chapter.
(b) However, a Holocaust victim's settlement payment received by
the parent of an applicant for or a recipient of assistance may not be
added to the total cash value of money, stock, bonds, and life insurance
owned by the applicant or recipient to determine the recipient's
eligibility for Medicaid under section 1 of this chapter.
SOURCE: IC 12-15-3-3; (11)IN1221.1.5. -->
SECTION 5. IC 12-15-3-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 3.
Except as provided
in section 7 of this chapter, if the parents of an applicant for or a
recipient of assistance to the blind or disabled who is less than eighteen
(18) years of age own money, stock, bonds, and life insurance whose
total cash value is more than two thousand two hundred fifty dollars
($2,250), the amount of the excess shall be added to the total cash
value of money, stock, bonds, and life insurance owned by the
applicant or recipient to determine the recipient's eligibility for
Medicaid under section 1 of this chapter.
SOURCE: IC 12-15-3-5; (11)IN1221.1.6. -->
SECTION 6. IC 12-15-3-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 5. Except as provided
in section 7 of this chapter, the office may set the total cash value of
money, stock, bonds, and life insurance that an applicant for or a
recipient of Medicaid may own without being ineligible for Medicaid
in cases not described in section 1 of this chapter.
SOURCE: IC 12-15-3-7; (11)IN1221.1.7. -->
SECTION 7. IC 12-15-3-7 IS ADDED TO THE INDIANA CODE
AS A
NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2011]:
Sec. 7. (a) As used in this section, "value" includes the
following:
(1) The face value of a life insurance policy.
(2) The cash value of a life insurance policy.
(b) The value of a life insurance policy owned by an applicant or
a recipient may not be considered as a resource in determining the
applicant's or recipient's eligibility for Medicaid if the applicant or
recipient:
(1) makes an irrevocable election to name the state as the
beneficiary of the life insurance policy; or
(2) assigns the life insurance policy to the state.
(c) The state has an insurable interest in an applicant or a
recipient who names the state as the beneficiary of a life insurance
policy or assigns a life insurance policy to the state as described in
this section.