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She has been paying on this policy for 30+ years. She is in a nursing home & recently passed the 90 day waiting period, so has qualified to received a monthly amount of $1800
Until last month, her only income has been Retirement & SS which was over the Medicaid Income limit, but not near enough to pay for the required nursing home care. Prior to the move to the nursing home, we applied for Medicaid and were approved after setting up a 'Miller Trust'/Diversionary Trust. Her SS is directly deposited into the trust, making her eligible for Medicaid based on income. Upon her death, the monies in that Trust will go directly to the state.
Currently, being Medicaid eligible, our payment to the nursing home is $2070/mo.
Her Medicaid eligibility is to be reviewed in January, and I don't want her to be denied because of this additional Long Term Care reimbursement - again, it puts her over the monthly Medicaid Income limit, but is in no way enough to pay for monthly nursing home costs!

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This is sounding a bit messy and comlicated, and you really should discuss this with an elder law attorney in your area. The Long Term Care insurance DOES of course go to the care of your Mother. It is to be listed and there are forms on which they ask for all assets. This is definitely one of them. You need to see an Elder Law Attorney with all assets, including this one, and with your Trust documents and etc. It is always best not to take advice on Medical and legal issues on a Forum. Wishing you good luck ironing out what is what here.
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Yes, her insurance should have been listed as an asset. What Medicaid pays is based on her share of her care.
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I agree about contacting an Eldercare attorney or Medicaid planner about this.

You might also try posting this question at www.bogleheads.org, a forum of folks very knowledgeable about financial matters.
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