Medicaid Annuity and The Ability To Protect Your Assets

A Medicaid annuity can allow you to protect your assets against the expected expenses of nursing home care and healthcare. The use of an immediate annuity is considered a Medicaid friendly annuity.

The immediate annuity was created to convert your monetary assets into a series of lifetime payments to make sure that you don't out live your savings.

If you have liquid assets in excess of $2,000, then Medicaid will not pay for your nursing home care. In order to protect your assets and still get Medicaid coverage, you can transfer all of your wealth to a third party insurance company to purchase an immediate annuity. This will guarantee you, as the owner of the Medicaid annuity, a fixed monthly income for the rest of your life.

A few states do not approve of Mediciad annuities and prevent this technique through look back clauses that identify spend down strategies. Most states have a policy that does allow Medicaid annuities as long as the Medicaid annuity must be irrevocable, not transferrable, actuarially sound, and life time payments to you, the annuitant, without any payments to a benefactor or ballon payment upon your death.

Even if you have accumulated $250,000 in retirement savings, if you need nursing home care, that retirement savings can disappear in a very short period of time. If you don't have long term care insurance coverage, in the past, people have been advised to improvish themselves in order to qualify for Medicaid coverage. Following that route would definitely leave your remaining spouse in a severe financial situation. The Medicaid annuity may provide you a different option.

Depending on your state regulations, your income, net worth and retirement objectives, the Medicaid annuity could provide you with the financial security that you need.

Medicaid annuities are not for everyone. If you are single or have enough money to pay for your expected expenses, then purchasing a Medicaid annuity would not be a benefit to you.

Medicaid annuities can have negative consequences that you need to be aware of. While Medicaid annuities aren't counted against your Medicaid asset limits, remember these annuities are irrevocable and once you start receiving payments, you couldn't access the principal for any reason, even if you leave the nursing home.

Another consideration with a Medicaid annuity, is that if you are getting care from a Medicaid facility, the income you received from your Medicaid annuity would go directly to Medicaid.

For some married couples, a Medicaid annuity might make financial sense. If one spouse is receiving nusring home care, the other spouse could receive monthly payments. The rules for Medicaid annuities can be very complicated and vary between states. It is recommended that you take the time researching your financial options and speak with a financial advisor before you sign up for a Medicaid annuity.

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The official U.S. Government Medicare Web site is cms.gov.