Can Medicaid Recover Life Insurance Proceeds?

My mother recently passed and she was receiving benefits from Medicaid prior to her death. She had no real assets, property, money, etc or will, except for a life insurance policy through her employer. She named me as the beneficiary of the policy.

According to New Jersey federal and state law, Social Services through the Department of Medical Assistance (Medicaid) has the right to attempt to recover all Medicaid payments for services my mother received while she was living.

My question is can they claim the life insurance policy which names me as the beneficiary of her policy?

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Jun 11, 2011
Life Insurance Medicaid Recoupment
by: Gabriel Heiser

The only possible way that proceeds of a life insurance policy can be attached by the state for Medicaid recoupment following the death of the Medidaid recipient is if the policy proceeds were payable to the recipient's estate or to a trust in those states that recoup against trusts.

If your mother had been the owner of the policy then the state could possibly have made a claim against the cash value. However, since it appears that her employer--and not her--was the owner, and the proceeds were not payable to her estate, then the state has no claim against the proceeds.

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Marquette, Michigan
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