Medicaid Life Settlement Laws
Victory! State laws supporting your right to convert a life insurance policy to pay for Homecare, Assisted Living and Nursing Home Care pass around the country
So far in 2013, eight states have introduced legislation based on Life Care Funding’s Long Term Care Benefit program as a way to encourage more use of Private Pay Solutions for Homecare, Assisted Living and Skilled Nursing through the conversion of a life insurance policy into a Medicaid Life Settlement Plan.
This practice is already the legal right of every owner of a life insurance policy in the U.S.—but most don’t realize it and are too quick to abandon a policy to qualify for Medicaid through a Medicaid spend down. The states that have introduced this groundbreaking legislation are California, Florida, Kentucky, Louisiana, Maine, New Jersey, New York and Texas. Among these states, Texas is the first to enact the legislation into law.
The Texas Medicaid Life Settlement law does two things:
- Grants authority to the Medicaid department to inform and educate citizens that they can convert life insurance policies into a Medicaid Life Settlement Plan to remain private pay and choose any form of long term care they want instead of abandoning a policy to go straight onto Medicaid.
- To qualify, the Medicaid Life Settlement Account must be an irrevocable, FDIC insured account that makes payments directly to the care provider; the person must be able to choose the form of care they want; a funeral benefit must be preserved; and if there is any unpaid account balance when the person dies it must go to the designated account beneficiary.
Life Care Funding has worked with the National Conference of Insurance Legislators (NCOIL), the Florida Medicaid Department, the Florida and Texas Health Care Associations, AARP, the insurance industry, and the life settlement industry led by Coventry First and LISA to develop this private pay funding option to provide important consumer protections and ensure that it is recognized as a Medicaid Qualified spend-down.
Since 2010, Life Care Funding has testified before NCOIL, the state legislatures of Florida, Texas, Maine, a special joint meeting of the New Jersey Medicaid and Insurance Departments, and provided expert testimony before legislative workgroups in Florida and Louisiana.
We have published numerous studies and spoken across the country about the importance of making sure the owner of a life insurance policy understands that they are better off converting life insurance into a Long Term Care Benefit Plan, or as the legislation designates it a Medicaid Life Settlement, instead of lapsing or surrendering their policy to go directly onto Medicaid.
Medicaid Life Settlement Plan
Life Care Funding has been a pioneer for elder rights and access to private pay funding options for long term care services since 2007, and has been championing this legislative solution since 2010. This consumer law is being introduced and enacted around the country to make sure people know they have the legal right in every state to use their life insurance to pay for long term care.
This Medicaid life settlement plan – Medicaid life settlement law finally ensures that policy owners will be informed of this private pay option by state governments. The specific tailoring and use of a Medicaid Life Settlement Plan (modeled after the original Life Care Funding Long Term Care Benefit Plan) can be a source of needed funds at a difficult time.