How Use Life Insurance and Not Affect Medicaid?

by Child

Mother has received $18,000 in proceeds from a life insurance policy. She lives at home in a small apartment; she is on Medicaid. How can she protect or what is the wisest way to use those proceeds so she won't lose medicaid?

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Mar 24, 2013
Purchase Excludable Assets
by: Gabriel Heiser

First of all, whatever she doesn’t spend by the end of the month of receipt will be a countable asset for Medicaid purposes. Since that will put her over the $2,000 limit, she will be disqualified from Medicaid until she can reapply and show what happened to the money (it has to be reported to the state).

She could purchase items for the apartment that would make her life easier, e.g., labor-saving appliances, walk-in bathtub, large-screen t.v. She could also purchase a car: even if she can’t drive, if it is owned by her and used to drive her to doctor’s appointments, day trips, etc., it will be an excludable asset.

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