Disclaiming an inheritance would disqualify the person recieving benefits as it would be viewed by the Medicaid eligibility worker as an uncompensated transfer, in other words a gift for which there would be a penalty period before eligibility could resume.
There are strategies that one could legitmately employ that would 'save' a portion of the inheritance and still allow for continuing eligibility. See an elder law attorney in the state in which the person is receiving benefits.
As stated above, the inheritance will impact your eligibility regardless of whether you accept it or not.
THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. Answering this question does not create an attorney-client relationship or otherwise require further consultation.
In most states, disclaiming an inheritance will not be recognized by Medicaid as valid. Accordingly, the local Medicaid office will deem the person to have received the money, probably disqualifying the person for benefits. this is so even though they don't have the money.
You should consult a local Elder Law attorney in the state.