Sec. 21.7. (a) To the extent allowed by federal law, the office may use federal or state funds under the Medicaid program to pay premiums and other expenses related to a life insurance policy that is in force and owned by an applicant or a recipient who:

(1) is:

(A) at least fifty-five (55) years of age; or

(B) permanently institutionalized; and

(2) has:

(A) made an irrevocable election to name the state as a beneficiary of the life insurance policy for an amount equal to:

(i) Medicaid benefits provided to the recipient under IC 12-15-5 or IC 12-14-17; plus

(ii) premiums or expenses paid by the office to the insurer that issued the life insurance policy; or

(B) collaterally assigned the life insurance policy to the state under a written agreement submitted to and recorded by the insurer that issued the life insurance policy.

     (b) Any life insurance policy that is in force and under which the state is named as an irrevocable beneficiary or that has been collaterally assigned to the state may not be sold, assigned, or the ownership transferred to any person or entity. This restriction exists as long as the life insurance policy names the state as an irrevocable beneficiary or as long as the life insurance policy is collaterally assigned to the state.

     (c) Life insurance policy proceeds that exceed the amount of Medicaid benefits provided to a recipient shall be paid to a beneficiary named by the applicant or recipient.

As added by P.L.196-2011, SEC.1.