Medicaid Compliant Annuities

Medicaid Planning

Countless people find themselves in situations where they must transition a loved one into a nursing home. This process is emotionally taxing and can be quite costly. According to Genworth, a private room's average cost in a nursing facility is approximately $8,821 per month. Typically, these payments can drain the individual's assets rapidly, leaving them and their loved ones with financial uncertainty. To assist with these costs, many turn to Medicaid.

Medicaid is a Federal program administered by the States and is available to all who qualify. To qualify, you must meet stringent income and asset requirements, which can be complicated and often takes an elder law attorney's expertise during the Medicaid application and planning process. Qualifications vary by state and require a great amount of attention to detail to ensure that the confined individual qualifies. Financial products such as life insurance with funeral trusts and Medicaid Compliant Annuities are frequently used instruments by experienced Medicaid planners to help accelerate eligibility for benefits.

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What is a Medicaid Compliant Annuity (MCA)?

MCAs are single premium immediate annuities (SPIAs) that pay an annuitant over a fixed period of time. These products may help individuals accelerate their financial eligibility for Medicaid benefits.

What makes an immediate annuity Medicaid Compliant?

While there are a variety of factors that make an annuity compliant with each state’s Medicaid requirements. There are a few key points to remember:

All MCA contracts must be for a fixed term (meaning no life contingencies) that is equal to or less than the life expectancy of the proposed annuitant. Life expectancy may vary by the state being applied in.

These contracts cannot be assigned to a third party, sold, or surrendered. Once the MCA is in force and passes the grace period, the contract’s value cannot be accessed.

MCAs must be irrevocable, and the parties of the contract cannot be changed. In most states, the Medicaid agency in the state being applied for must be named the primary beneficiary.

The payments being made to the annuitant must be level, meaning they must remain the same for the entire payout period.

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Hear From Our Agents

I wouldn't work with any other carrier for my Medicaid Compliant Annuities. ELCO Mutual Life & Annuity provides exceptional customer service and agent support. When I call ELCO Mutual, I know I will get a live person to talk to and will not be stuck on hold forever. New Business has gone above and beyond to submit my transfer requests within an hour of receiving them from me or sending out original transfer paperwork Next-Day Air, in order for my clients to qualify for Medicaid by the end of the month. I can't talk more highly of my experience working with ELCO Mutual for the last 10 years.

Landon S.