Can a Life Insurance Policy Affect Nursing Home Coverage?

He very likely can qualify. The $15,000 figure is probably the policy’s face value (the death benefit), and the $1,070 is likely its cash value. If that’s right, he should be able to qualify without spending anything down, as long as the policy is his only asset and his income is within the limit.

What Does South Carolina Medicaid Look At?

Medicaid checks four main things before it pays for nursing home care.

• Life insurance face value: Face value is the amount the policy pays out when the insured person dies. It’s printed on the policy. In South Carolina, Medicaid has an upper limit of $10,000 across all policies. If your companion’s face value is $15,000, he would not qualify for this exclusion.

• Life insurance cash value: Cash value is the amount he could receive today by cashing in (surrendering) the policy while he’s still alive. If a policy’s face value is over $10,000 (as in your case), Medicaid counts the cash value as an asset. 

South Carolina allows a single person to have $2,000 in countable assets. A cash value of $1,070 is under that limit. If the policy is his only asset, no spend down should be required. To be sure of the exact number, ask the insurance company for a current cash value statement. 

• Monthly income: His income must be under the limit for a single person, which is roughly $3,000 a month. If his income is above this level, excess income will need to be passed through a qualified income trust in order for him to qualify. 

• Medical need: Being bedridden with Alzheimer's disease will almost certainly meet Medicaid's "nursing home level of care" requirement.

Does My Money Count Too?

No. Because the two of you aren't married, Medicaid looks only at his money and property, not yours.

How Do I Apply for Him?

You can apply through SC Healthy Connections or through the nursing home's business office, which often helps families with the paperwork. You'll need legal authority to apply on his behalf, such as a power of attorney, or you can be named his "authorized representative" on the application. His Alzheimer’s diagnosis may complicate whether he can name you as his agent if he’s been determined mentally incapacitated. You may need to visit an elder law attorney to ensure proper authorization.

Quick Checklist Before You Apply

• Call the insurance company and ask for the policy's face value and cash value in writing.

• Gather his Social Security award letter and any other income statements.

• Locate his power of attorney paperwork, or ask an attorney about becoming his authorized representative.

• Ask the nursing home to confirm that it accepts Medicaid.