I am near the end of my father's funds for self pay at his NH. He lives in New Hampshire and MUST be below $2500.00 at all times. Small life insurance policy is approx $3000.00. I was just informed that this would keep him from qualifying for Medicaid. I can make the State the beneficiary, but I don't want to do that. I would rather "spend" the money on him, however, if I cash it in now, it will be worth less than the $3000.00. I am so frustrated with this process. It just seems so unfair to a man who paid into the system throughout his life.
It sounds like he is $ 500 over the $ 2,500 allowed for assets due to the insurance, right? If that's the case, you really don't have many options. See if your state allows for a funeral / burial amount - like for TX it's $ 1,500 which is allowed if earmarked for this. See if the insurance company can change the policy to do this and then just cash out the balance. They could do a hefty service charge on this too, but you kinda have no choice.Insurance companies can move glacially so the sooner you start on this the better. If your state allows the $ 1,500 set aside, the $ 1,500.00 is beyond whatever NCV (no cash value) funeral & burial policy that may be already out there too. My mom has a prepaid funeral and a small term life insurance policy (under $ 1,500) and all is OK for Medicaid TX. (It was done to
cover flowers, clergy, stuff not included in a prepaid & btw will not cover all those costs when the time comes either.) Then just spend-down the $ for things he can use - new eyeglasses, perhaps dental work (that will use up the $ in a flash).
For 3K, not worth doing much else (a trust) as the costs to do will cost and you still will have Medicaid eligibility issues.
Does Dad have funds designated for burial/final expenses? He is allowed to have that and not count it toward his assets.
If you have to cash the policy in now, it will be worth less. Sad, but a fact. Do what you have to do to get him qualified.