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Senate committee backs bill to exempt $25,000 of life insurance cash value from Medicaid eligibility calculations
Summary
The Senate Banking and Insurance Committee agreed to a committee substitute for Senate Bill 6 to exclude the first $25,000 of a life insurance policy's cash-surrender value or death benefit from Medicaid asset calculations and voted to report the measure to the full Senate, with a first referral to the Health and Human Resources Committee.
The Senate Banking and Insurance Committee on an unrecorded voice vote agreed to a committee substitute for Senate Bill 6 that would create a new section in the human resources code exempting the first $25,000 of the cash value or death benefit of a life insurance policy from Medicaid eligibility calculations.
Counsel told the committee the substitute "provides so that the first 25000 dollars of the cash value of a life insurance policy, or of the death benefit of a life insurance policy, is exempt from Medicaid, eligibility calculations." Counsel also said Human Resources' fiscal note estimates a "minimus fiscal impact" and that denials because of cash-surrender value are rare.
Supporters said the change aims to help low-income West Virginians keep small life insurance policies intact while pursuing Medicaid long-term care eligibility. The Senator from the Thirteenth said the bill would prevent some residents from having to "cancel a life insurance policy to spend down the very limited cash value dollars inside the life insurance policy" before they qualify for long-term-care services, and noted that, in the absence of such policies, the state often pays funeral and burial costs.
After agreeing to the committee substitute, the committee voted to report the measure to the full Senate "with the recommendation that it do pass," subject to its original double-reference by first sending the bill to the Committee on Health and Human Resources. The committee adopted both votes by voice; no roll-call tally was given.
The bill's text, as described by counsel, creates a standalone section in the human resources code and is intended to limit the role of a policy's cash-surrender value (CSV) in determining Medicaid eligibility. The fiscal note cited by counsel characterizes the anticipated budgetary effect as minimal.
The committee took no further amendments and adjourned after completing its action on the substitute and the reporting motion.
