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Within a certain time frame once approved ? Medicaid Dad's just been denied Medicaid because he has an insurance policy & bank account with an over $2000. They've received updated bank statements that show he only has several hundred in his bank account and I'm scared to cash out his life insurance policy in case we need it to take care of him outside of the nursing home. I'm really stuck on what to do. Any and all advice, suggestions will be appreciated.

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Dads life insurance policy either is a whole life policy so it has a cash value that must be cashed in & spent down OR its a term life with value of the policy is too high.

So what's the details on the insurance?
& who is the beneficiary
.
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Can't recall if it's whole or term & I'm the beneficiary; regardless, I'm in the process of cashing it out to more than likely pay down on his nursing home costs. I am just concerned that should he get approved for Medicaid and say, a couple months down the road, pass away, will Medicaid come back on the family to repay that assistance. Because if that's the case, I'm going to have to take him out of the nursing home asap & figure out how to pay his outstanding debt.
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Medicaid allows you to use the insurance policy proceeds to pay for his funeral. If you already have that in place, then use the $ from the insurance policy to pay his NH bill. As long as there is a audit/paper trail of the policing being cashed out, the deposit into dad's account and then "spent down" on his NH care, Medicaid cannot ask the family to pay back what they pay. You might also consider instead using the insurance $ to pay for an elder care atty to help you navigate and get your dad on Medicaid. I am in the process now and could not imagine trying to get him Medicaid benefits without his elder care lawyer. Again, the $ will have a trail showing it was cashed out and spent on him. That's what Medicaid is looking for. The benefit to you is help with an often frustrating process (as you have already encountered).
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Since Medicaid changes state to state find a elder care attorney for answers
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Contact the insurance company for paperwork to sign over the ownership of the policy to you. Dad will have to sign. Once you are the owner, you will have to make the payments if policy is not paid up. But it will no longer be his asset and you still have the policy face amount instead of the cash value. I did this in with Prudential and Medicaid accepted this in Florida.
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Better check with your Medicaid caseworker before just signing the policy over to another owner. In Ohio that would be considered gifting and, you would have to pay NH bills in the equivalent of the value of policy.
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If your father is in a NH, there must be a person who specializes in the financial part of nursing home care and payment for the resident. Ask the administration or even the front desk who this is and make an appointment to see him/her. Bring all his financial papers you can. I paid down my mother's finances by self-paying her care until there was only $1200 left. The nursing home financial counsellor took care of all the applications and follow up for her Medicaid and she was approved. I am very careful to maintain a low balance in her account. You could use the policy funds to pre-plan his funeral.
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Upon Dad's death, the state must make a claim against any property or cash or other assets that had been in his name, to repay up to the amount the state spent on him for his care in a nursing home. If he dies broke, the state is out of luck; they cannot go after family members for his Medicaid debt.
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Others have sort of addressed this. I'll chime in...You can buy a prepaid burial policy and Medicaid does not count that as an asset up to a certain amount..it used to be $15000 in my state...So if dad's policy is whole life, you could cash it in and buy a prepaid burial policy....If something is left, you could elect to put him in private pay nursing home care and it won't take long to use it up...The home my wife lives in was $4000 or so a month in 2007 and now is $9700 a month for two-to-a-room full nursing care. States rates vary . You will also find that all of his SS and pensions will go to the nursing home even if/when he goes on Medicaid.....If his SS and pension income is above a certain amount in my state, the person is not eligible for Medicaid...Check it out.

Elder care lawyers differ in qualifications and abilities...we found a few who were way out of date on the then current rules of Meidicaid.

In my opinion it may be wise to visit the Social Services dept of your county health department and share with them any and everything about dad's financial and health situation....they are there to help..Some know more; some less. You can go to them on a fact-finding mission and not apply for Medicaid if you so desire....They will ask you if you want to apply.

I trust such documents as Power of Atty, Health care power of atty, last will and testament and so on are in place?

Does dad have a spouse? If so, there are other considerations too complex to go into here..

We have found Medicaid to be a very generous program...yes, we did spend down our mid-six figure investment portfolio to a fraction of that as per Medicaid rules over several years of private pay, but I no longer give that a thought...Medicaid has paid more than enough for 7 years now to make up for what we spent on private pay and who knows how much longer she'll be in the nursing home..

Grace + Peace,
Bob
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When my bio dad entered a nursing home, his life insurance policy was not seized. I'm not sure how he had everything set up regarding his Ford life insurance policy, all I know is that the money was definitely not seized nor was his home
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The home is not "gne after" until the Medicaid recipient dies, and anyone on Medicaid can state they intend to return home even I they clearly would never be able to. Life insurance policies that have no cash-in value (term insurance) may not be subject to scrutiny.
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As long as Medicaid has no lien on the home, you can actually sell it or transfer it even into a trust. Depending on how well you trust your trustee will be planned on whether or not you put the whole me not trust or whether you decide to sell it if you want to keep Medicaid's hands off your assets. I know I would be safeguarding my assets now while I can, It's always smart to take some kind of proper action to remove your name from the deed before nursing home care is needed or before you die. Even filling out a transfer on death is smart if you want to keep your home until you die. Transfer on death is a form that keeps anyone from grabbing the home, especially if there's a will involved. You really need to do your homework now and find out what kind of steps can be taken to protect all of your assets according to your plans
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re the answer by Jesus Cares: If dad signs over the policy, can that be considered a "gift" if it's within the 5 year look-back?
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dadscare24: There must have been some kind of red flag warning that went up on Medicaid's end to deny it...too much money in bank account, over the $2K or under allowed...something??
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There is a HUGE sea-change on insurance policies now happening for Medicaid in many states. Now some states are starting to require LIFE INSURANCE POLICY CONVERSIONS aka Life Care Funding, aka Medicaid Life Settlement. So far 8 states have done the legislation on this.

By & Large term life insurance was not viewed as a spend-down asset; so when they died the beneficiary got the value of the insurance and all this was done outside of probate. Only if their estate was named to be the beneficiary & got the insurance $ would there be a recovery via MERP on the estate. Only whole life insurance was a spend-down asset as it had a obvious cash value. Now if states are now going to require LIFE INSURANCE POLICY CONVERSIONS aka Life Care Funding, aka Medicaid Life Settlement, in order for the elder to be eligible for Medicaid this will totally change the landscape for heirs....

So far 8 states (mine - Louisiana - is one and regs apparently are being written like now so probably in effect in 2017) have done the legislation on this. TX & FL have done it, so all the other states are sure to follow. Basically it means that all insurance policies (whole, term, GUL, universal) over a minimal value (like 3K - 5K) will need to convert to an irrevocable account (administered by a 3rd party) with the funding used to pay for their care and any $ left after death to the state as the beneficiary except for a death benefit of 5K or 5% of policy - whichever is less.
Depending on how big the policy & how the payout is structured (like its based on actuarial tables or a flat formula), it could well be enough $ to keep you over the medicaid income ceiling so that you would have to do Miller Trust for the overage in addition to the Conversion.

Insurance co probably love LOVE the move to conversions.

If the states legislation requires conversions to be done for existing eligible Medicaid recipients for their renewals to happen, it is really going to mean no after death insurance $$ at all ever to heirs.
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dadscare24: Does the insurance policy have a CSV? If so, that may be why Medicaid is denying right there. You need to find out this information.
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dadscare24: You have to think about whether dad had IRA's, Keough's, pension funds, annuities, et al.
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Would a Transfer Upon Death protect the Medicaid recipient's home from being targeted for sale following the recipient's death? If so, when does that need to be filed - during the recipient's lifetime or after their death?
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Dadscare, because Medicaid is so different from state to state, you need to find an elder attorney expert in your state's programs. If your father was admitted to nursing home as Medicaid pending, was denied, and you are now trying to get assets cleared up, you need legal advice for your particular situation. A Transfer on Death within the 5 year period (certainly once Medicaid has been applied for!) would be scrutinized and you need to make sure you are protected personally from any debt liability much less your father's house or an insurance policy.
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