Follow
Share

I completed the paperwork for my mother's Medicaid nursing home application and the annual recertification last year. She has three life insurance policies. I did not realize that they had a cashout (surrender) value until just the other day. I checked on the requirements in California and found that the amounts exceed MediCal's limit. Now, I don't know what to do. I'm afraid of alerting them to the mistake and afraid of them finding out on their own. Should I just cancel the policies? Thank you.

Iggy,
The Prosceco is on it's way. Lol.
Helpful Answer (0)
Reply to Sendhelp
Report

xyz
and
sock puppet?
Helpful Answer (0)
Reply to Sendhelp
Report

Something like this happened to us. We found stocks that we hadn't known about after filing for and being approved for Chronic Medicaid. The Medicaid case worker said it happens all the time.

The stocks brought my mother in law's assets slightly over the limit, but we were able to put the money in a Medicaid approved irrevocable funeral fund and it wasn't a big problem.

How this goes for you is probably dependent on your county's Medicaid office, though. We dealt with another county on a different issue (spousal refusal- which is legal in the state) and their lawyer was a miserable man who enjoyed his job which seemed to be harassing the elderly community spouse and shaking dimes out of their pockets.
Helpful Answer (1)
Reply to Marcia732
Report
igloo572 Sep 4, 2020
Marcia, oh my & yeah attorney was being a total d*ck. & Just as an FYI, the feds require the states to have a defined formula for just how a determination of CSRA or MMNA is done (aka Community Spouse Resource Allowance or Monthly Maintenance Needs Allowance/Assessment) & the states set a ceiling on the amount. The caseworker or county agent is supposed to enter the fixed #s the community spouse / Medicaid applicant provided (like mortgage, prop taxes) then the federal demographic aggregate #’s (like cost of living for your county or parish or city), then if there’s a Medicare special disease classification (like Lou Gehrig’s, End stage renal). Alot of the #s are self populated too from various federal databases, like based on zip code and what the CS Medicare filings were from CMS data (centers for Medicare & Medicaid). Now the CS or their POA or atty can provide documentation as to other extra higher costs which gets added... this seems to be unusually high energy bills or high out of pocket drug costs. There was a daughter on this site whose NH dad only had like $45 of his SS as his required co pay to the NH, as her mom had high energy & RX costs. The mom basically got to keep almost all his SS$. NH had to accept the tiny copay as that’s what the CSRA formula came up with. If NH has Medicaid beds and it’s only $45 copay coming from a resident, just too bad for NH.

Some states CRSA MMNA are high. Like TX is almost 3k, like almost the SS max payout amount. So, if you're a youngish wife with a big mortgage, car note, you're able to keep most of the older hub's who is now in a NH SS$ if you get your documentation in.
(1)
Report
See 4 more replies
It’s probably the “face value” that caused the glitch. I’d use “I looked at face value” excuse if you need one.

if her policy is really old, like last millennium, like from the 1960’s or 50’s, they are a thicket of legal size, double sided paperwork. Policy will read the face value on the first page but you have to get into it to find out if it’s term or whole and how it’s dealt with when paid up and if it produces a dividend & what must be done with the dividend. It’s not always clear or easy to decipher. You might want to run the policy by an insurance broker to see what’s what and if it actually is a term policy but pays a dividend and it’s the dividend that’s pushing up its value. If the dividend has to get plowed back into the term life policy, it can’t be cashed out and so doesn’t count for Medicaid. It’s still whatever the face value was when policy was done.
Helpful Answer (0)
Reply to igloo572
Report

I'm so glad you're moving forward on this. I'm interested in how this works out. I feel so bad for those who have no one to help pull it all together.
Helpful Answer (0)
Reply to Houseplant102
Report
ElizabethsGirl Sep 3, 2020
Thank you Houseplant,

I'll let you know. I haven't found a lawyer yet who can advise me.
(0)
Report
Call an attorney that that deals in elder issues research on line ratings or referral by someone you trust for advise.
Helpful Answer (0)
Reply to LCPELC
Report
ElizabethsGirl Sep 1, 2020
Thank you for the advice. I took it and called one today. Am hoping to speak with her within the next couple of days. This is so scary and stressful!
(1)
Report
ElizabethsGirl,
It is not a mistake if you did not have the information to report at the time.
Finances are fluid, not always static throughout the month, or year.
If your Mom is close to the maximum limits of assets and income,
do not be afraid. Medi-Cal has formulas that no lay person can fiigure out by themselves.

You could call the Life Insurance person who may have sold the policies to your Mom, or the company. If she is already in the NH for this past year, you may need to a) surrender the cash values to the NH; or 2) Assign the NH as beneficiary of the policies. (If they are paid up with no more premiums due.) 3) If the premiums were due, and the premiums are defaulted, you need to find out the true status of the policies.

You can report the policies this year on the annual recertification.
Did you already report the policies last year? Just not the value?

You may need more information, start with the insurance companies who surely must have experience with this.

But you have done nothing wrong, not knowing everything.
Proceed as if you are not afraid, because life is too short for this many worries.
Helpful Answer (1)
Reply to Sendhelp
Report
Sendhelp Aug 31, 2020
Motto:
What can be done by paperwork can be undone by more paperwork.
(3)
Report
See 1 more reply
I would call them immediately and explain as you did here. That way everything is on the table. It could turn out in a positive way. Good Luck.
Helpful Answer (0)
Reply to earlybird
Report
ElizabethsGirl Sep 1, 2020
I think that's a good idea. I'm going to talk with a lawyer first just to see what she has to say. I imagine she's going to give me the same advice. I'm hoping it's not as bad as I'm thinking it could be. Thank you for your help!
(2)
Report
You need to contact your mothers medi-cal eligibility worker and notify her of this. Medi-cal operates a bit differently than Medicaid in other states. You may be able to cash out the policies and spend down the money on her care without impacting her medi-cal eligibility—the eligibility worker well tell you your options.
Helpful Answer (2)
Reply to worriedinCali
Report
ElizabethsGirl Aug 29, 2020
Thank you. Sounds like good advice.
(0)
Report
See 1 more reply
Once you have all insurance policy documents in hand, and have a letter from each insurance policy stating today's actual values, you will have something to help you work through this process. Have a typed list of any agencies and persons you know you must deal with to resolve this oversight.
COVID de-staffing makes it a lot harder for anyone to process applications, much less amend or update. Consider how difficult it may be to take documents to any requesting person or agency due to COVID restrictions. Phone lines are busy. Nursing homes have to be so careful now. An attorney can probably help a lot in this process. He/she will have the records as proof of what/when any documents are submitted and to whom.

I'm trying to figure out how either you, Mom or Medicaid overlooked this during the initial application process due to what my spouse and I had to do for his nursing home application:

Medicaid application asks on the initial application if the applicant has any life insurance policies (yes or no). Then it requires answering as to type - (burial, term or whole life). It asks if the applicant has an annuity from any source (yes or no). Next the face value and the cash value for every policy must be listed.
The applicant must list the names of all owners and beneficiaries of any and all policies. Next a copy of each entire policy and annuity must be submitted. It asks if any policies have been cashed out and what was the amount. If yes, list the date. It asks if any annuity was in a payout yet. Yes & no & documents required for any and all.

This line of questions and documentation doubled for marrieds as the non-applicant spouse had to submit any separately owned insurance policies. In our case, there was a paper application review and face-to-face interview for verification purposes on the initial application.
Even though my spouse had a low value policy, we both had a cremation policy, and he had cancelled policy, we still had to submit every policy for each of us.
Helpful Answer (1)
Reply to Houseplant102
Report
ElizabethsGirl Aug 29, 2020
Yes, I was actually wondering about this too. How was it possible that they didn't follow up with more questions? I filled out the forms with the information I had at the time. MediCal's forms do not request information on the type of policy (whole, term, etc.). Only the provider, face value and cash value. They never asked for a copy of the policy. We never had a face to face interview either. I was taking my mother's word that there was only one policy with a cash value and that it was less than $2000. She would not intentionally deceive me, so I assume that she just didn't know. I can't explain why I didn't verify all of that for myself since I am ordinarily super cautious and verify everything. I'm going to call MediCal and explain everything.
(1)
Report
If you cancel then you will get the cash value. Tell them about the error. You will probably have to give the money to Medicaid, but do not try to hide it, that shows intent and that creates problems. Errors can be rectified with openness, honesty and cooperation.
Helpful Answer (3)
Reply to Isthisrealyreal
Report
ElizabethsGirl Aug 29, 2020
I hadn't realized that if I cancel, she will receive the cash value. So, this information helps a lot. I can't just cancel. I've got to work this out with MediCal "California Medicaid".
(0)
Report
Call them with the information you have. There may be a way to reimburse medicaid for what they have so far put out on your mother's behalf; I have no idea. But that is the best you can do. Be scrupulous and honest with them. You didn't know this information, and now you do. You may want to buy an hour of an Elder Law Attorney's time to find out how best to go about this.
Helpful Answer (2)
Reply to AlvaDeer
Report
ElizabethsGirl Aug 29, 2020
Thank you for your reply. I've been afraid to alert them, but I think you're right. Honesty is the best policy. I'm hoping to talk with an attorney on Monday.
(3)
Report
Ask a Question
Subscribe to
Our Newsletter