Life Care Funding Applauds Florida Medicaid Department For Introduction of HB535 to the Florida Legislature
Bill would provide for conversion of a life insurance policy into a Long Term Care Benefit Plan as part of a Medicaid qualified spend-down
PORTLAND, Maine—Life Care Funding applauded the action taken by Rep. Patronis, The Florida Agency on Health Care Administration, and The Accelerated Life Benefits Technical Advisory Workgroup to develop HB 535 introduced into the Florida Legislature. The Workgroup spent a year developing an in-depth report and the accompanying legislation that will provide for the conversion of an in-force life insurance policy into a Long Term Care Benefit Plan as a Medicaid qualified spend-down.
The report and accompanying legislation includes the “Private Option” to convert a policy into a Long Term Care Benefit Plan modeled after Life Care Funding’s Long Term Care Benefit Plan. (see page 6 of the Medicaid Department Report). A powerful coalition of interests have come together to support the use of life insurance as a tool to pay for the costs of long term care. The Florida Health Care Association, the Florida Chamber of Commerce, AARP, the Florida Assisted Living Federation, the life insurance industry (carriers and agents), and the life settlement industry have all worked together to create this legislative proposal.
Key elements of the “Private Option” Long Term Care Benefit Plan include:
- A schedule evidencing the total amount payable, the number of payments and the amount of each payment required to be paid for long term care under the contract.
- All proceeds must be held in an irrevocable state or federally insured account.
- The lesser of five percent (5%) of the face amount of the life insurance or $5,000 is reserved as death benefit payable to the estate or beneficiary.
- The balance of payments required under the contract unpaid at death of the must be paid to the estate or a named beneficiary.
“Life Care Funding is grateful to have played a role in the development of this bill now before the Florida legislature”, said Chris Orestis, CEO of Life Care Funding. Life Care Funding testified before the workgroup and contributed comments to the drafting of the bill. In addition, Life Care Funding’s model was analyzed and cited as a key contributor of research data to Florida State University’s Center for Forecasting and Analysis economic impact study: Conversion of Life Insurance Policies into Long Term Care Benefit Plans in Florida. The study “scored” the annual savings from HB 535 for the Florida Medicaid budget and tax payers at $150 million annually if policy conversions are used to extend the period a Medicaid applicant would remain private pay before qualifying for government assistance.
“Right now life insurance policies are being abandoned, so the senior can receive Medicaid. If passed, both the state and the policy holder would benefit. It’s pretty innovative. … It should be a win-win all the way around,” Rep. Patronis said.
About Life Care Funding:
Founded in 2007, Life Care Funding assists people in need of funds to cover the costs of senior housing and long term care. Working with over 4,000 Senior Living and Long Term Care providers in the U.S., LCFG originated and is the market leader of converting the death benefit of an in-force life insurance policy into a Long Term Care Benefit Plan to cover the costs of skilled nursing home care, assisted living, home health care, and hospice. Life Care Funding (www.lifecarefunding.com) can be reached at 888-670-7773 or email@example.com.