In New Jersey - drop secondary insurance once on LTC Medicaid or no? Trying to find reasons or a "loophole" to keep it, with examples.

The reason to keep it would be (as an example) your LO would be able to go to a doctor who did not take Medicaid.
Your LO doesn’t get to keep the money if you cancel it. They are only allowed to keep the PN allowance either way. But if you have the insurance you might be able to get a service that they wouldn’t be able to get otherwise.

The elder law attorney who prepared father-in-law's Medicaid application - in Indiana - told us that we might as well keep the insurance he had because the premiums were deducted from his monthly liability anyway. If we dropped the insurance, his monthly payment to the NH would go up by the same $ amount as the premium.
It did seem to me that his insurance paid almost nothing anyway, and Medicaid picked up the rest. It was the same cost to him either way.

I am from NJ. Once Mom was on Medicaid, I dropped Moms previous insurance. Medicaid covered her eyeglasses, healthcare and dental. I was told that I wanted to drop Moms insurance I could. Nothing was said that Medicaid would allow the premium out of Moms SS and pension. But then Moms employer paid the premium. I did keep it for a couple of months just to make sure bills before Medicaid were paid. During that period the NH would bill Medicare, then Moms suppliment would be billed and then Medicaid pays the balance.