Medicaid Annuities for Couples

For many individuals that have accumulated up to $200,000 in retirement savings, the cost of nursing home care can be devastating over a very short period of time. In the absence of long term care insurance, many individuals in the past have been advised to impoverish themselves to qualify for Medicaid assistance. This can leave the remaining spouse with financial difficulties in the future.

In the case where one spouse requires nursing home care while the other does not, Medicaid annuities can help the spouse who does not need long term or nursing home care to retain the assets the couple worked so hard to accumulate, all the while ensuring that the other spouse receives the long term care he or she needs.

The Medicaid annuity is typically structured in such a way to allow a married couple to use all or part of their assets to purchase an immediate annuity. The income stream from that immediate annuity then flows to the spouse who is not in the nursing home. The spouse in the nursing home will then be able to qualify for Medicaid, which will then pay the cost of the nursing home or other long term care.

While this can be a good strategy in some cases, it is important to do your homework before deciding on a Medicaid annuity. In most cases, a couple who annuitizes their remaining assets for the benefit of the spouse in a nursing home will still need to pay part of the income from the annuity toward the cost of the nursing home. The amount required will vary by state, but most states will charge something. In addition, if there is any cash left in the Medicaid annuity after both spouses die, the state is legally entitled to attempt to recover the funds.

Before you consider a Medicaid annuity, it is a good idea to consult with a lawyer who specializes in elder law. Medicaid annuities can be a valuable tool for the right couples, but it is important to make sure that a Medicaid annuity is really the best option in your special circumstances. The rules governing Medicaid and Medicare change constantly, so having a person who is well versed in the intricacies of the Medicaid program can be a big help.

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As with any other annuity product, it is important to keep fees and expenses as low as possible when considering a Medicaid annuity. Fees and expenses charged by annuity provides can differ widely, even for similar types of annuity products. Also make sure you deal only with quality, reputable individuals and companies. You need to make sure that the annuity company you choose will be with you for the long term, and that your annuity salesperson will be willing to help you long after the sale has been made.