(a) There is hereby established the Long-Term Care Partnership Program, to be administered by the Department of Public Welfare in accordance with the requirements for qualified State long-term care insurance partnerships. The purpose of this program is to reduce future Medicaid costs for long-term care by delaying or eliminating dependence on Medicaid by providing incentives for individuals to ensure against the potentially substantial costs that arise upon the need for long-term care.

(b) In order to implement the program, the Department of Public Welfare shall file a State plan amendment with Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services pursuant to Title XIX of the Social Security Act (49 Stat. 620, 42 U.S.C. § 1396 et seq.) within 30 days of the effective date of this section. The program, including the treatment of assets for Medicaid eligibility and estate recovery, shall be structured and administered by the Department of Public Welfare in accordance with Federal law and applicable Federal guidelines for qualified State long-term care partnerships.

(c) The department shall require all insurers offering a qualified Long- Term Care Partnership Program policy to offer to exchange any policy or certificate issued between February 8, 2006, and the date the State plan amendment takes effect with a qualified Long-Term Care Partnership Program policy. The following shall apply: