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LADYLAWYER
LADYLAWYER, Lawyer
Category: Legal
Satisfied Customers: 6536
Experience:  Civil; Family; HOA; Landlord/Tenant; Real Estate; Probate; Insurance; Immigration; Wills & Trusts
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My father has been in a resthome for over a year. He has health

Customer Question

My father has been in a resthome for over a year. He has health insurance, Medicare and Medicaid. The rest home says that Medicaid stop payment lst September because Daddy had a $5,000 life insurance policy. The rest home sold to a new company and the new company took over January of this year. Their administrator said that Mother, Daddy and us four kids are going to have to pay over $20,000 to cover his bill since September even though the old company and administrator just took over in January. Everytime we mention bringing him home we were discouraged from doing so by both companies. Are we going to have to pay this?
Submitted: 5 years ago.
Category: Legal
Expert:  LADYLAWYER replied 5 years ago.

LADYLAWYER :

Hello!

LADYLAWYER :

You kids will not be held responsible for the outstanding bill. However, since TX is a community property state (meaning all debts incurred by one spouse are the responsibility of the other spouse as well), your mother technically could be sued for this debt if the resthome actually chooses to sue.

LADYLAWYER :

I would recommend that your father and/or mother appeal the Medicaid decision, especially if the policy was disclosed on your father's original application for Medicaid.

LADYLAWYER :
You may also appeal the Medicaid decision because the life insurance policy may not even count towards Medicaid's spend down policy. The rule states that only the "cash surrender value" of a life insurance policy is countable, but only if the total face value of all life insurance policies on your life exceeds $1,500. ("Cash surrender value" is the amount the life insurance company will send you if you canceled the policy. It's also known as the "cash value." The "face value" is what the company would pay out to your beneficiaries if you died, assuming the policy was still in effect.) So Medicaid may be wrongly denying paying the bills here. An appeal should be made and if approved, the bills will be paid by Medicaid and neither your mother or father will have to worry about it.
LADYLAWYER :

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Customer:

Thank you for the information but I have a couple of more questions. Why was he permitted to remain in the rest home if they did not know if Medicaid was going to pay. I thought that is what administrators are for. And if Medicaire didn't pay wouldn't his insurance company have to pay? Since the company was sold, how can the account be carried over ?

LADYLAWYER :

Happy to keep helping ou!

LADYLAWYER :

*you :)

Customer:

Thank you

LADYLAWYER :

I cannot comment as to why they encouraged him to stay in the home when he did not have Medicaid. When did you find out that Medicaid had quit paying?

LADYLAWYER :

Does he have other full coverage insurance or just supplemental insurance?

LADYLAWYER :

With regard to the account being carried over, I am sure the new company assumed all assets and liabilities. So that is why the account carried over.

Customer:

I assumed it was full coverage but I will have to find out for sure. If we have to pay will we be obligated to pay $200 a month like they say? If it was full coverage, shouldn't the insurance pay?

Customer:

Why didn't they kick him out?

LADYLAWYER :

Yes, the secondary insurance policy should cover it.

LADYLAWYER :

I wouldn't pay them anything until you appeal Medicaid's decision.

Customer:

Thank you LADYLAWYER. You were a lot of help.

LADYLAWYER :

But if Medicaid denies coverage and for some reason the insurance company will not pay, then your mom can work out a deal with them to pay monthly or she can let them sue her, if they will do so.

LADYLAWYER :

Again, I really do not know why they would not refuse service. If you were not informed of Medicaid's decision to quit paying (you sould have been sent a letter), then you have a good argument as to why your mom and dad should not be liable for the amount owed.

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