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Does an immediate annuity exempt a person from having an 'asset' causing them to be (in-)eligible for medical assistance?
Anonymous3 views3 answers
An old strategy for appearing as having no assets and hence eligible for medical assistance was to purchase an immediate annuity for a life payout (income stream) and applying for medical assistance for nursing care. I wonder if A) it works well with a single person (vs a healthy/community spouse w/a spouse requiring care) and B) what the parameters are if it is still used (ie life-only payout, life/period certain, life w/refund option, etc.). Would it make a difference if the person required 'assisted care' versus long-term care (ie memory care)?
I don't practice law in MN so you will need to check with an elder law attorney in that state, but under federal law an annuity will be treated as an available resource or as having generated a penalty unless it is immediate, pays a fixed rate, is actuarially sound meaning that it must pay out before the actuarial life expectancy (which rules out the life period annuity), irrevocable, and name the state as the remainder beneficiary after the spouse.
I suggest you study the detailed eligibility rules which are available online: Go to MN Dept. of Human Services as a starting point. So you know, the rules have been written with clearness in mind. You may pay an attorney to provide you with a formal legal opinion as to your personal issues and concerns.
Tricia Dwyer Esq.
There are Medicaid-compliant annuities out there--these are very specialized products. A Medicaid-complaint SPIA only works for a skilled nursing care scenario though, not for assisted living. Memory care may well be in the assisted living category, depending on circumstances. there are better tools out there for longterm Medicaid eligibility planning and asset protection; get a consult with a local elder law attorney to discuss.
