The most common source of unrecovered private-pay AR in a Maryland skilled nursing facility is not a family that will not pay — it is a family that ran out of runway 60 days before the Medicaid approval landed. An unneeded life insurance policy sitting in the resident’s paperwork is one of the few remaining assets that can close that gap, and it stays invisible because nobody asks the question at admission.
Maryland’s environment makes the timing tighter than most. Long-term care Medicaid runs through Maryland Medicaid LTSS and Community First Choice with a $2,500 individual countable-asset limit as of 2026, and Maryland’s rate-setting environment is widely described as compressing the private-pay to Medicaid spread compared with other states — verify current rate data before using it in a budget. Either way, the pending-Medicaid resident is where the write-off risk concentrates.
A family can send a redacted policy cover page. One page, with the resident’s or responsible party’s permission, is enough for a free preliminary read — typically back in one to two business days, with no obligation to anyone. The phone number for families is (305) 209-7183.
In This Article
This Is Education You Hand a Family, Not a Facility Program
Start with the boundary, because it governs everything else. Nothing on this page is a facility endorsement, and nothing here involves a referral fee, commission, or any payment to a facility or its staff. There is no arrangement to enter into, and none is offered. The appropriate use of this material is as neutral information a business office can give a family that has asked the obvious question: how are we going to pay for the next few months?
The family makes its own independent decision, using its own advisors. A business office that stays on the information side of that line avoids the referral-source and inducement problems that make compliance officers nervous, and avoids anything that could look like steering a resident’s assets.
Why the Policy Never Shows Up in the File
Admissions packets ask about Medicare, secondary insurance, Social Security, pensions, bank accounts, and the deed to the house. Life insurance appears, if at all, as a burial-resource question — which is a different question entirely. So a resident can arrive holding a $150,000 universal life policy nobody needs, and the business office will never learn it exists until the family stops paying the premium.
Three questions added to the financial conversation change that. Does the resident own life insurance with a death benefit of $100,000 or more? Is it permanent coverage or term still inside its conversion window? Is anyone still counting on the death benefit? Yes, yes, no is a file worth telling the family to have valued.
The 60-to-90 Day Funding Bridge
Follow the AR aging. A resident admits private pay, the family applies for Maryland Medicaid LTSS, and the application sits in processing while the daily rate accrues. If the family exhausts liquid assets before approval, the balance ages past 90 days and starts moving toward write-off — even though the resident will ultimately be eligible and the stay will ultimately convert.
A settlement does not fix a slow application, but it changes what the family has to work with while they wait. Because the cash surrender value is a countable resource that must be dealt with anyway, the practical question is not whether the policy gets liquidated but which liquidation puts more money on the table. Commonly cited industry ranges run roughly 10% to 35% of face value, and the GAO’s 2010 report (GAO-10-775) found settlement proceeds well above cash surrender value on the policies reviewed. See life settlement vs. surrender for the comparison in plain terms.
| AR scenario | What usually happens | What the policy question changes |
|---|---|---|
| Private-pay resident, Medicaid application pending | Balance ages past 90 days while the family runs out of liquid assets | Proceeds can bridge the gap until approval converts the stay |
| Family paying premiums out of pocket | Premiums compete with the daily rate; one of them stops getting paid | Value the policy before the grace period closes |
| Family plans to surrender the policy for eligibility | Carrier pays cash surrender value and the death benefit is gone | The same countable resource may price higher on the secondary market |
| Policy already lapsed | No surrender value, no settlement value, nothing recoverable | Nothing — this is the outcome to catch earlier |
| Short-stay resident approaching benefit exhaustion | Discharge pressure with no private-pay plan behind it | Adds a funding option to a level-of-care conversation |
| Resident owns small burial policy only | Usually below the settlement threshold | Likely not a candidate; treat as a burial resource |
Timing Is the Whole Problem
A standard settlement file runs roughly 60 to 120 days from complete documentation through funding. That is a workable timeline if the question is raised during the admission financial review. It is a useless timeline if it comes up at the 120-day AR review, after the family has already surrendered the policy or let it lapse to keep the lights on.
The one time-sensitive item worth flagging to any family: a policy in its grace period is on a clock. Once it lapses, whatever the secondary market would have paid is gone, and so is the surrender value. Value is destroyed, not transferred.
Maryland Rules the Business Office Should Know Exist
Settlements in Maryland are governed by the viatical settlement provisions of Md. Insurance Article Title 8, with the Maryland Insurance Administration as the licensing and enforcement authority. You do not need to know the statute, but knowing the regulator exists lets you tell a family exactly where to verify that any company they talk to is properly licensed.
Two other items surface in facility conversations. Maryland’s filial-responsibility statute, Md. Code, Family Law § 13-101 et seq., remains on the books — verify the 2026 enforcement posture before it is ever raised with a responsible party, and never use it as collection leverage. And Maryland operates a Medicaid estate recovery program, which is one more reason families should have independent counsel review any plan for proceeds. Our Maryland Medicaid asset and income limits page is a fair handout for the eligibility side, and Maryland’s filial responsibility law explains the statute for families who ask.
What a Referrable Case Looks Like
The profile that prices in the secondary market: an insured roughly 70 or older, or any age with a material health change since the policy was issued; a death benefit of $100,000 or more; and permanent coverage — whole life, universal life, guaranteed universal life — or convertible term still inside its window. Most SNF residents fit the age and health criteria comfortably; face amount and product type are the real screens.
What does not work: small face amounts, expired-conversion term, or a policy the family still needs. If nobody in the building can tell from the paperwork, that is exactly what the free cover-page read is for. Our page on what policies qualify covers the screen.
How a Referral Works
The family — not the facility — sends a single page: the policy cover page or declarations page, redacted as they see fit. With the resident’s or responsible party’s permission that page is enough for a preliminary read on whether the policy has secondary-market value. There is no cost, no engagement, and no obligation for anyone.
Turnaround on the first read is typically one to two business days. If it looks viable, an indicative range requires three additional documents: a current in-force illustration, the latest carrier statement, and a signed HIPAA authorization. A standard file then runs roughly 60 to 120 days through funding.
The family controls every step, can stop at any point before closing, and should have any offer reviewed by independent counsel or a financial advisor before accepting. Families can send the cover page or call (305) 209-7183 for a free review. See how the process works for a walkthrough you can print.
This page is educational only and is not legal, tax, or investment advice for a facility, its staff, a resident, or a responsible party. It is not an endorsement, a referral arrangement, or an offer of compensation of any kind. Independent counsel should review any transaction before it is executed.
Frequently Asked Questions
Can our facility receive a fee for referring a family?
No, and none is offered. This material is educational information a business office can share with a family that asks about funding options. There is no referral-fee arrangement, no commission, and no compensation of any kind to a facility or its staff.
Does a resident have to surrender a policy to qualify for Maryland Medicaid?
In most state programs, life insurance is disregarded only when total face value across all policies is $1,500 or less; above that, the cash surrender value is generally a countable resource that has to be addressed. Maryland Medicaid LTSS applies a $2,500 individual countable-asset limit as of 2026. Confirm current treatment with the Maryland Department of Health.
How fast can proceeds actually arrive?
A standard file runs roughly 60 to 120 days from complete documentation through funding. Cases involving a terminally or chronically ill insured can move considerably faster. The initial free read on a cover page is usually back within one to two business days.
What documents does a family need to gather?
Four in total for an indicative range: the policy cover page, a current in-force illustration, the latest carrier statement, and a signed HIPAA authorization. The cover page alone is enough to start and to find out whether the rest is worth requesting from the carrier.
Is this the same thing as a viatical settlement?
Related but distinct. A viatical settlement involves a terminally or chronically ill insured, and proceeds may be income-tax-free under IRC Section 101(g) when the certification requirements are met. A life settlement involves an insured who is not terminally ill and has different tax treatment. A tax professional should advise on either.
Who regulates these transactions in Maryland?
The Maryland Insurance Administration, under the viatical settlement provisions of Md. Insurance Article Title 8. Families can verify licensure with the MIA directly, which is a reasonable thing to suggest to anyone considering a transaction.
Can we keep a stack of these as a handout in the business office?
Facilities generally may share neutral educational material about funding options. Whether and how to do that is a question for your own compliance officer and counsel, since policies on outside materials vary. Nothing here is a facility endorsement.
Does Maryland’s filial responsibility law help with an unpaid balance?
Maryland’s statute at Md. Code, Family Law Section 13-101 et seq. remains on the books, but the current enforcement posture in 2026 should be verified with counsel before it is ever raised. It should not be used as collection leverage with a family.
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Related Reading
- Life Settlement Vs Surrender
- What Policies Qualify For Life Settlement
- How It Works Policy Options
- Maryland Medicaid Asset Income Limits
- Filial Responsibility Law Maryland
- Education Center
Pine Lake Life Solutions does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.