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I've got to wonder how that happened? Medicaid will try to collect all money it paid out for your dad's care.
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Yeah, "glad", that IS strange!

Generally when an insurance policy has a cash value, Medicaid forces the policy to be cashed in before they authorize Medicaid eligibility.

Was the policy reported during the application process?
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Unless it was a prepaid policy.
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I suppose we should have asked what kind of insurance?

I thought the cash value of a life insurance policy, whether paid up or not, is considered an asset that Medicaid looks at?

I know prepaid funeral expenses up to a certain limit are allowed, but not sure about a funeral insurance policy?

Or a term life policy, which has no cash value but does have beneficiaries...not sure if Medicaid has access to that?

Let's find out the kind of insurance referred to in the question and then maybe the poster can get a proper answer.
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if there is just 1 dollar regardless of insurance or beneficieres the goverment meaning medicaid will get it and tell you it will be applied to the long term care he recieved....I am surprised they did'nt flush this info before he started medicaid.....hang in there
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From what I have heard Medicaid will take everything and I guess they can, to pay for the care they provided.
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If it was a term life policy, then it probably didn;t have a cash value so not an issue for Medicaid.

Somewhere in the insurance policy should be the information as to where to file a claim by the beneficiary. Whomever is the beneficiary of the insurance policy just needs to send a letter along with an original death certificate and the policy number, and they will be paid as per the policy.
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There are so many kinds of insurance!
Just because it is called "term" does not necessarily mean there is no cash value!

It DOES make a difference WHO owns the policy.
For instance, Dad may have bought the policy, it may be paid up, and he MAY have signed it over to the beneficiaries more than 5 years prior to his accessing DSHS care--in which case, Medicaid may not have any claim on it.

OTH, if Dad still owned a policy of any kind, that had any cash value, the State gets it to pay for his care.
HOW did they miss that he had insurance? Did Dad not tell them? OR, didn't the family know about it until after?
IF State learns of it, and it had not been reported to them when he applied for welfare/medicaid help, that would be fraudulent.

IF it is a simple Term policy that wouldn't pay out until his death, the State still may supersede stated heirs, and take money to cover Dad's care--which may or not equal the value of the policy.

So yeah...nothing likely left for heirs---the longer Dad was cared for by medicaid system, the less for heirs, if anything.
ALL assets that can be sold to help pay his care, are fair game for States to take.
SOME States even come after other immediate family's assets---so it's real important for family to document their assets in terms of "we need to keep these, lest we become dependent on State Aide, too"--usually that is business assets, or homes, etc. that family is dependent on using or else might have to go live under a freeway overpass...
State want's it's due---but it does NOT want to create more welfare recipients by taking what it thinks it's due!
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Oh...also, if the the remaining family are not blood relatives
...or they are poor too
....that changes things.
The State is essentially a Creditor--a big one.

My Mom was married; he was not our Dad.
He died destitute, she was also.
After he died, various providers tried to threaten us with all kinds of things, if his bills weren't paid.
LUCKILY, State entities had their paperwork in order, but, some providers seemed to be intractably ignorant of notifications.

I had to learn what to say, to get them to stop.
I told them things like:
=="He died owning nothing, destitute, receiving State Aid"
=="He is not my parent; it is illegal for creditors to harass caregivers"
=="Stop harassing destitute, grieving survivors"
=="The deceased mans' wife is also poor, and cannot handle his affairs"
=="Collections are futile; there is nothing to collect anything from"
The most effective statement was the "stop harassing the dead man's family".

Make sure you have as many copies of the death certificate as may be needed to provide for various entities requiring them. Insurance companies, banks, etc. all need a copy, to prove the death, so paperwork can be done.
It is up to the family to get those--getting them right away as soon as possible when notified, makes them less costly, and quicker to get, than if you try to get them later on a request.
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Elder care law sites are very clear that since all term insurance by definition has no cash value, it can neither disqualify someone from Medicaid eligibility nor be collected by Medicaid for patient repayment. The only caveat is that the Medicaid patient's funds cannot be what is used to continue making the payments.
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