Medicaid Application: What are Medicaid Annuities?

As you fill out your Medicaid application and explore your options, you may have come across the possibility of securing a Medicaid annuity. Because Medicare does not provide long-term care and Medicaid is only available when your financial resources are minimal, many couples face the possibility of depleting their assets to manage the costs of nursing home care.

To improve your financial situation into retirement, a Medicaid annuity may be a beneficial option if your spouse needs to receive care in a nursing home. This alternative to spending down your assets to qualify for Medicaid allows you to convert your countable assets into an income stream that the healthy spouse can use.

When you fill out your Medicaid application, Medicaid will determine your eligibility by taking a snapshot of your assets. Most assets, even if they are in a spouse’s name, are viewed jointly. Depending on the state where you live, there will be limits on these assets, but many spouses can keep up to $137,400 in assets without them affecting their eligibility for Medicaid. Any assets above this threshold are viewed as available to cover the expenses of the other spouse’s care.

Keep in mind that Medicaid uses a five-year “look back” period, meaning that they can look at your financial history for the past five years to ensure you did not transfer any assets to family members. Your income will also be a factor, but the income of the healthy spouse is usually not considered.

 There are many requirements and factors to consider before filling out a Medicaid application and potentially acquiring a Medicaid annuity. For additional information, contact our law firm today.