My mother is on Medicaid in a nursing home in NY. My father was estranged (not legally separated) and in NC under the care of my sister. He passed away Dec. 2015. He had 3 life insurance policies. All 4 children and mom were named as beneficiaries and funds were dispersed. Medicaid is now re-certifying mom's medicaid. Are the insurance awards paid out to the children considered in the 5 year look back formula? Will the children be required to hand over the insurance money to Medicaid? I have been unable to get an answer from Medicaid, which has become the norm in this whole ordeal!
2. As for the portion of the proceeds that passed to the children, the only way that such insurance proceeds could be countable (as a transfer from your mother, subject to the five-year lookback rule) is if in your state life insurance proceeds form part of the "statutory share" of a deceased spouse that the surviving spouse is entitled to. In most states, life insurance paid to anyone other than the estate of the insured would not be part of this calculation and thus would not be deemed a transfer from your mother (because she was entitled to a portion of those proceeds under the statute and did not actually receive them).
Perhaps the best way to deal with this is to try to find things allowable as expenses to spend all the insurance $ on for mom AND do this within the month received so that she starts the month within Medicaid's income / asset limits and ends the month within Medicaids income /assets limits. If the insurance $ isn't to big (or "bigly" rotflmao) having them fully buy a pre-need funeral & burial policy (8-10k), or if its a larger amount of $ perhaps dental work if mom is able to deal with dental care, as both are larger amounts of $ spent. Whatever the case the windfall of $ mom is paid (moms $ only not kids) will need to be spent on her care & her needs only. If she can't spend it within the month, then it will take her assets over the maximum 2k allowed under Medicaid. If this is what moms situation is, you need to clearly find out just how Medicaid needs for mom to do her copay or SOC ( share of cost). Could be she reverts to private pay and suspended from Medicaid till she becomes impoverished again or could be she will need to pay back all excess $ over the 2k asset limit to the state for what the states Medicaid program paid on her care. You / DPOA need to clearly find out just what needs to get done.
I'd do a short 1 page letter to Medicaid and fax it over to medicaid and also call the local caseworker for mom and snail mail it too. If your states medicaid is especially overwhelmed or inept, instead of snail mail perhaps mail letter certified with the return registered receipt. Medicaid should have sent mom /DPOA a letter stating her medicaid eligibility and her SOC and the fax # will be on this letter. I'd fax from a FedEx office type of place where you get a fax confirmation report. Fax & certified mail maybe run $ 10 to do both.
For my moms annual medicaid renewal, there was a questionnaire asking on the status on her finances, property ownership, insurance, etc. as well a required the current months bank statement AND the previous 3 before that one. Renewal sent to me as her on file for medicaid contact person & DPOA and with my signature verifying it. I had no idea that renewals even happened & had basically put all of my moms paperwork into storage. Fun!!!
We just went through this, it really is 2000 or less in assets.
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