Medicaid annuity

Annuities That Help You Qualify for Medicaid and Protect Your Assets

Long term health care costs remain high and growing. Because of this retirees with significant assets should plan for their potential Medicaid eligibility. A Medicaid qualified annuity can play a part in this planning when one spouse has to enter a nursing home leaving the other one at home. Medicaid picks up the long term care cost of elderly who are impoverished. Long term care is very expensive and can eat up savings fast. The elder may not be able to leave a legacy to their children. Medicaid is a federal program but handled at the local level by your State. State restrictions and regulations on Medicaid vary so you always need to be aware of your own states’ Medicaid policies. Nevertheless, simply giving your assets away and then immediately applying for Medicaid is unacceptable under federal rules . To be safe you need to irrevocably transfer assets 60 months prior to applying. Anything shorter will prompt your state Medicaid office to attribute those assets to you and require you to pay your Medicaid monthly rate (state dependent) until all those assets have been exhausted. Only then will Medicaid foot the bill. If you still have substantial assets, you can [...]

Purchasing an Immediate Annuity to Qualify For Medicaid

If you are going to need long-term care at some point in the future, and have no insurance of any kind to pay for it, then you may be seriously considering spending down your assets in order to qualify for Medicaid. If this is the case, then converting some portion of your non-exempt assets into an annuity may be a viable strategy. Of course, if this is what you intend to do, then an immediate annuity with an irrevocable payout option must be used. The payout must be irrevocable because the entire contract will be valued with the owner’s assets if the owner has the power to change the payout terms. In order to have the annuity be exempt to quality for Medciaid, the payout must be set up a a lifetime payout based on the Medicaid life expectancy tables. But while the transfer of assets into the contract will effectively exempt them for Medicaid purposes, care must be taken to ensure that the income stream paid out by the annuity does not exceed the amount allowed under the Medicaid spend-own rules. If this should happen, then the irreversible payment schedule would leave you with no way to reduce the income [...]

What is Medicaid Annuity?

There is no such thing as a Medicaid annuity. Annuities can however help some people shelter assets so that they can qualify for Medicaid long term care benefits. The reader is encouraged to consult an elder care attorney to understand the laws that apply in his state. Medicaid rules vary from state to state, so the following discussion is a general discussion of federal rules that impact the use of annuities for Medicaid planning. Some retirees have concern about paying for ill health (long term care) in later years. One strategy is to exhaust one’s assets and then qualify for Medicaid support. Understandably, most people are not eager to exhaust their assets. When it comes to counting your assets to determine Medicaid qualification for long term care benefits, properly structured annuities may be an exempt or non-countable asset and can be retained by the person who also gains Medicaid benefits. But that annuity must meet the following criteria: 1. It must be an immediate annuity or deferred annuity that is now being annuitized 2. The guaranteed payments must be for the life of the owner, or term certain shorter than the owner’s life expectancy Annuity agents often refer to annuities that meet the above [...]