Medicaid and life insurance payout. Is there a way to avoid making the claim so my aunt doesn't lose Medicaid coverage? - AgingCare.com

Medicaid and life insurance payout. Is there a way to avoid making the claim so my aunt doesn't lose Medicaid coverage?

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My aunt is currently on Medicaid, and her boyfriend has a $50k life insurance policy that she is the beneficiary on. We heard that if he passes, and she collects the insurance, that this will cancel her Medicaid. Is there any way to avoid this other than not making the claim (she is a very sick woman and now worries about this more than she should)? BTW she lives in Florida.

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You are correct that if the boyfriend dies and your aunt receives the money it will cause her to be disqualified from Medicaid until that money is spent down or otherwise converted into non-countable assets. A better alternative is for the policy proceeds to be paid to a trust for her benefit, with language that prevents the money from causing her any Medicaid problems. Such a trust must include "supplemental needs" language; any good elder law attorney will know how to prepare this for the boyfriend. Once it is signed, the policy is changed to name the trustee of that trust as the beneficiary.
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I have a 100K life insurance policy on my husband that I have been paying on for 35 years since we first got married. He has one on me also but for only 40K. We did this to help pay for college for our kids should something happen to one of us. They are all grown and we have grandchildren who are nearly grown too. Now as a person living on Social Security and a small pension, $500 a month, I am still paying on that policy. Of course it is worth more than 100K now. I was planning on living on this in my old age. Is there any way I can protect it now. My husband has Alzheimer's (7 years now) but I don't forsee putting him in a nursing home in the next few years unless I can't take care of him or he becomes violent. He is very passive and agreeable now and can still bathe and dress himself. I have to help him do most activities, such as brushing his teeth, putting on his seatbelt and cutting his food or choosing it at a restaurant. He has lost a lot of vocabulary and doesn't talk much. Mostly he watches TV, and he is physically strong. Is there any way to protect that money. My savings are very small!
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Wamnane: You seem like such a sincere person who wants to do the right thing when it comes to the care of your husband and yourself! Bless you.
1) How much are the monthly premiums of your husband's life insurance policy?. Can you still handle it? My suggestion is to keep that policy. Keep up the monthly payments. You'll need the proceeds someday. I assume that you are the only beneficiary. In the unlikely event that you pre-decease him, the $40,000 can be used for his care. Talk to the life insurance company to be sure that the proceeds on your policy ( the $40,000.) are protected.
Good Luck!
p.s. His behavior is normal for someone of his age and his medical condition. You are a lucky woman.
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Thanks for the answer Gabriel, now I will know a bit of what I am looking for when I help her with this!
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Wamnane: Perhaps Attorney Heisers advice is what you need as well. Run see an attorney.
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