I highly recommend that anyone with a LO with a term life insurance policy read what igloo572 posted below. This is important because your LO probably cannot get anymore life insurance and, you probably want to keep the insurance in force, but want to keep it safe from Medicaid recovery.

Won't Medicaid have an issue of my mother is the beneficiary (I would be the owner) of her whole 10k life insurance? Does this question come up during recertification?
Thanks!

We found a life insurance policy after we applied for Medicaid that made my mother ineligible. Since we didn't know about the policy prior to her application how could her coverage be denied?

This explanation is not accurate at least in my case and therefore may be misleading. I have a policy with a face value of $1,000 on one of my children. But the Death Benefit is well in excess of the so-called face value stated in the policy. This article equates face value with death benefit even though in my particular instance the beneficiary of the policy would get well in excess of the face value of the policy, in contradiction of the article. So when applying the second test, namely "only if the total face value of all life insurance policies exceeds $1,500." should one consider the face value actually stated in the policy ($1,000 in my case) or the death benefit payable to the beneficiaries before evaluating the surrender value?

tb - I think it is that in theory a term policy doesn't really have a value till the person dies and it pays out. So changing ownership of something that has no value that could have years & years before a payout should not be a factor for Medicaid eligibility.

Term seem to usually have a long, long period of low cost premiums due. For those on Medicaid in a NH, since they have to do a copay of thier monthly income to the NH less a small personal needs allowance (varies by state $ 35 -105); really just $ to pay for barber / beauty shop and toiletries replacement; so family ends up paying the premium to keep it in force. So it kinda makes sense that if your paying for it you should own it.

Another thing to look at with elderly parents is to see who the beneficiary is. Often for those men in their 90's, who did policies in the 1950's / 1960's, they would name their estate as the beneficiary as it was assumed that the wife - a stay at home spouse a la Laura Petrie & Betty Draper - would have someone "handle" the estate for the little lady. LOL! Bad idea if they end up on medicaid as the assets of the estate are subject to recovery by MERP. This is why Medicaid asks for the applicants life insurance policies. Changing ownership & beneficiary is pretty straightforward to do if they are competent but takes time.

What do you mean by having the child purchase the policy from the parent? For an existing policy does that mean changing the ownership of the policy and paying the premiums? If we change ownership of the policy is that subject to Medicaid's 5 year look back?

what if your policy is 100,000.00

This is about as clear as mud. $2000 for a surviving spouse, 109,000 for both. Huh?$10,000 life policy face value you keep for burial, but the exception swallows the rule - the state gets $8500. You parents can keep car,house etc. Suprise! Exception swallows the rule again. The state gets it. The patient is covered 100% for 100 days, but ....well, you picture. Basically if you get on Medicaid, bend over.

My sister was named my mothers beneficiary for the 5000 term life policy. My mother recently passed and now my older sister who is the POA is telling her she must give her the money to pay back my mothers Medicaid for her SNF. Is this true?

My Mom has two small Life insurance policies that keep her out of Medicaid. She is 95 years old. She has a burial policy but will probably need money out of these policies to cover her funeral. Her health is deteriorating but trying to prepare ourselves. With this 5 year lookback should we assign one or both policies to the funeral home? One is worth $5500 and the other $3500. Your thoughts???

Another option for some might be for the owner/insured to irrevocably assign ownership of the cash value policy to a "trust." By doing this, the owner surrenders their rights to the policy (no longer controls ownership of it, cannot change the beneficiary, gives up the right to cancel or surrender it for cash, and cannot use the cash value for a loan). The trust pays the funeral expenses and in some cases, whatever is leftover is paid to the "trust beneficiary" (a relative or loved one specified by the owner when it is set up). NOTE: The laws vary from state to state so you should check with a professional in your area.

Mom had a special type of life insurance policy called a "term with return of premium", so she was able to cash out.

To respond to Jillmow8....Term policies can't be "cashed out" because there is no cash value in them.

What if your 95- yr.- old mother has a couple of small policies (with cash value) that are Paid-up?

What if the term life insurance is cashed out and there is remaining money after the prepaid funeral arrangements? Can this money be gifted or used to pay back loans to family members so the amount doesn't count against medicaid acceptance?

Hi Mr. Hesier: I am the owner of my mom's insurance policy for nearly 5 years now. My mom has been a medicaid recipient since I believe 2004-2005. I was unsure if my mom's life insurance info was given to Medicaid during her original application as I worked with a caseworker and the nursing home. At the time, was also not guided well or educated on medicaid regarding transfers, penalties, countable assets, hiding assets, etc. Over time, have read up on those rules. In year 2010, I notified the caseworker during my mom's annual medicaid re-determination and provided the insurance papework stating i was the owner and also, stated it had been assigned to a funeral home. For years I have been paying the premiums and am the beneficiary and also thought i was the owner of policy as I received the invoices. I worked with the insurance company with that and funeral home. However, based on the transfers rules, i think this has been done outside of the 3 or 5 year look back period. The cash value at the time of the policy was below the asset limit. But, when i assigned to funeral home in 2010 and confirmed my ownership as well with insurance company, it was year 2010. I understand it's not medicaid asset of my mom's now as it's assigned to a funeral home , but what preventative steps do i need to take if medicaid catches this error from prior to 2010. The Caseworker who handled this in 2010 did not ask for anything or questioned it. I'm assuming all will be fine, but i worry about this each time now for redeternination for my mom. she does not have any assets (property, real estate, etc). And, I'm not a disabled child and therefore, the penalty is forgiven. Hopefully, you can advise.

A patient in a nursing home paid for by medicare and medicaid was just left 50,000.00 dollars by his wife's life insurance. She just recently passed away. Is the patient allowed to keep that money? Is his family allowed to take care of it for him? Can he use it to pay for his wife's funeral? She paid for this insurance throught her job. She died unexpectly and left no will!

I am only 45, I just became disabled with Hydrocephalus in April of last year.
I receive LTD from my former employer and SS as well. It only comes to about $1000 a month.My Medicaid benes won't kick in until fall of '14. At the end of this month I am going in for a financial interview with Medicaid to try to get the kind of Medicaid that allows someone to clean my apt and help me go to the grocery. I don't require help to care for myself personally. I also have an adult son. I have a small Life Ins policy that I want to leave for him. If I pass, will Medicaid take this money from him?

does this apply for someone already on medicad that wants to up there life inurance policy coverage from $7000 up to current final expense standards of $15000

I think I understand, thanks. She is retired/disabled at age 48 (now 56), is on SSDI/NYC disability pension/GHI/Blue Cross/Medicaid (all of the above except Medicaid since age 49 and Medicaid since age 50). I get the impression the Medicaid law is considerably different in NH than NY. In NY, allowed assets are $13,080.00 for everyone, as far as I have been informed. I am retired/disabled since age 47 (now 62) and on all of the same benefits as Rose (my G.F.), except for Medicaid. She has home care and goes to an adult day treatment program, I don't.

bob - Medicaid eligibility for those over 65+ for a long term care facility, like a NH, is somewhat different that for other Medicaid situations like your live in girlfriend who is on Medicaid and sounds like she works; or Medicaid for the disabled on SSDI or short term Medicaid for pregnant women or Medicaid for children. For those in a NH all their income less whatever your state has as a personal needs allowance (from $ 30 - 75 a month) has to be paid in toto to the NH. I think the thought is that the NH resident lives at the NH so in theory doesn't need $$ for anything else while your girlfriend lives with you in the community so can have more income.

I was under the impression that countable assets/allowable bank balance for medicaid eligibility for one person had been raised to at least $13,080.00. We used to have a medicaid flyer in our NORC office which stated this. I believe this amount is increased annually, or at least at frequent intervals, to keep up with the cost of living. My live-in girlfriend receives medicaid, so several professionals have double checked this information for her. The maximum allowable monthly income before having to pay a surplus is approximately $780.00 (also double checked), which also increases slightly periodically. She pays a failrly substantial surplus. The income aspect was not mentioned in your response, but I guess the question didn't really address it. We live in New York state, so I imagine asset and income limits would vary slightly in other states ?

Ah, I see.

PC - for Medicaid you have to basically be impoverished whether you are a single person or 1/2 of a married couple that needs to go into a NH and on Medicaid.

But for couples, the one that is not in the nursing home is considered the
"community spouse" and as such should have the income/assets to continue to live in the community. The community spouse does not have to make themselves impoverished for the other to get accepted on Medicaid - that is what the 109K allows them to do. The 109K is the community spouses assets and NOT the assets of the Medicaid recipient. It's slightly above a 50% split based on 2K. For many many couples, they have to spend down their assets to get to the $ 109K point.

Why is the limit for a couple more than 50 times that of a single person? That makes no sense at all!