Any experience with a Life Insurance Policy and qualifying for Medicaid?

I am POA and beneficiary to my mother's life insurance policy. It currently has a cash value of about $6500.00. The death benefit is a little over 7K. (I am her only child).

She doesn't have any savings...just what's in her checking acct every month from Social Security and a pension from her former employer.

She owns a mobile home that has no value. In fact, apparently, if we can't sell it, she will have to pay to have it removed. She has no other assets. She rents the property on which the mobile home sits.

I am looking into a state run nursing home facility for her. It is my understanding that Medicare and Medicade will kick in. I also understand that they will take the life insurance policy which I am trying to avoid since she has nothing else.

I called the insurance company and they said as POA, I can request information on how to disperse the funds prior to her death. I just sent them a letter and I am awaiting a response. But I am also looking for other people's experiences with this matter. Thank you in advance.