Texas Gov. Rick Perry, R, now has a bill that could help state residents use life settlement transactions to help pay for long-term care (LTC) services.
The bill, Texas House Bill 2383, would let the holder of a life insurance policy with a face amount over $10,000 sell the policy through a life settlement contract, then use the proceeds to pay for LTC services.
The state Medicaid program would not take the life settlement proceeds into account when deciding whether the individual was eligible for Medicaid nursing home benefits.
The bill was introduced by state Rep. Craig Eiland, D-Galveston.
If the bill becomes law, the insured could keep 5 percent of the face amount of the policy or $5,000 — whichever was less — to pay for funeral expenses.
Another provision would prohibit any person from requiring the recipient of the LTC services to choose specific LTC provider.
The state would not be able to implement the law if the state Health and Human Services Commission found that implementing the law was not cost-effective or feasible, according to the bill text.
In an analysis of the possible effects of the bill on state finances, Ursula Parks, director of the state Legislative Budget Board, questioned whether it is possible for state agencies to implement the law.
The provision letting users of the law choose their own LTC providers could increase state Medicaid program costs, Parks said.
“The requirement that [the state health commission] not implement any provision if determined that implementation is not cost-effective or feasible would make it unlikely that the department would be able to implement the provisions of the bill since they are likely to increase costs to the state,” Parks said.
Alan Buerger, chief executive officer of Coventry First, a life settlement company, put out a statement welcoming passage of the bill.
“This legislation is a private-sector solution to a public policy crisis in our nation today,” Buerger said. “Investors in life settlements are now directly enabling individuals to meet their long-term care needs, while helping states offset the growing costs of Medicaid.”