HB 2383

83(R) - 2013

Vote Recommendation

  • Neutral
  • Neutral
  • Neutral
  • Positive
  • Neutral


Craig Eiland

Bill Caption

Relating to the consideration of a life insurance policy in determining eligibility for medical assistance.

Fiscal Notes

The fiscal implications of the bill cannot be determined at this time. The number of individuals who might become eligible for Medicaid pursuant to choosing a life-insurance disregard and the cost of providing services to those individuals is unknown.

Bill Analysis

Summary: Some applicants for Medicaid with life insurance policies must give up their policies for an amount below their value to be eligible for the state to provide Medicaid benefits. HB 2383’s committee analysis states that interested parties contend life settlement contracts, in which a life insurance policy is sold to a third party for more than its cash surrender value but less than its net death benefit, would allow a policy owner to use the policy to help pay for long-term care expenses and delay the policy owner's reliance on the Medicaid program. They contend these life settlements would generate Medicaid savings if Texas were able to advise owners of life insurance policies on the option of converting policies into long-term care benefit plans, instead of abandoning the plan and relying on state assistance.

HB 2383 would allow life settlement contracts to be used for the provision of certain long-term care services. HB 2383 states that state or federal medical assistance funds cannot be used to provide long-term care services if the person has a life settlement contract until the contract’s funds are exhausted.

Analysis: HB 2383 is beneficial because it establishes a way for people to pay for long term care services by converting their life insurance policies into a life settlement contract. Allowing Medicaid applicants to use the value of a life insurance policy to pay for services before they receive Medicaid benefits will save taxpayer resources. Otherwise, these tax dollars would go toward paying Medicaid bills for people who could have used their life insurance policies to fund their health care, but were otherwise unable to do so by law. Vote “yes,” on 2383.