Do Life Insurance Proceeds Affect Medicaid?

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   Peggy Mace

   Most of the U.S.

   In order to receive Medicaid, the potential recipient must show that they have very low income and very low assets. The level of assets cannot go up beyond the maximum allowed amount or Medicaid eligibility will be jeopardized. If life insurance proceeds are received by being the beneficiary of a policy, those proceeds will be counted as income in the month that it was received. Once the benefit is spent, Medicaid eligibility will be returned. Consult a tax attorney and your social worker to see if there are legal ways to deal with your inheritance that are more favorable to you.

   Answered on August 13, 2013

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