The idea behind a Medicaid Life Settlement is to establish a new solution that brings new benefits to consumers, states, and the medicaid system as a whole. The rising costs of healthcare have put the federal and state governments in a difficult position. Funding is already stressed, and projections show that the problem will only grow in the near future. Meanwhile, these same costs have prevented some consumers from affording the care they need.
The solution of a Medicaid Life Settlement is to leverage the existing life insurance policies of an individual about to begin medicaid. Instead of forcing a policy lapse or other loss in value, new laws are being crafted to allow the policy to become a funding mechanism for the needs of the policy owner. This not only benefits the governments and the consumers, but also the care providers who will have a larger supply of paying customers.