To qualify for Medicaid, a single individual can not exceed $ 2,000 in countable assets, and a couple can not exceed $ 101,540. Any excess must be spent either until they do not (in general) is the best alternative path, talented (what) a costly period of Medicaid ineligibility causes, or converted to a non-countable asset. Such a non-countable asset is a "Medicaid annuity." Here's how it works.
The pension is a periodic payments back to you, in exchange for aLump sum of money. You can either make private (between you and a family member) or transactions are made (with an insurance company). Medicaid only allows commercial annuities.
For example, if you can a man who is 70 years old, you transferred $ 50,000 to an insurance company in exchange for a monthly pension of $ 400, guaranteed for your life, no matter how long you live. But what if you died unexpectedly after two years? Pension payments would stop. Most people do notso, and therefore will usually buy the annuity with a "guarantee period" of at least a certain number of years.
Under the Medicaid rules, a male aged 70, has a life expectancy of 12.8 years. So you can not buy an annuity with a guarantee period of 12.8 years without a period of disqualification from Medicaid exceed. We remain safely with 12.8 years to be. Since you are guaranteed to find the payments for the longer your life expectancy or 12.8 years, theMonthly payments will be lower. In this example, they fall from $ 400 to $ 354 per month.
So why would someone do that? "What happens when you are in a nursing home and 50,000 U.S. dollars too much on the bench. You could buy one of these pensions and immediately qualify for Medicaid without having to spend the $ 50,000. The $ 354 must be paid to the nursing home each month, and Medicaid gets the difference. Under the new laws, which effectively became 8th February 2006, the Statemust include the recipient of the pension paid to the amount of Medicaid services in your name, call in your life.
If you live to your fullest life and then die, the annuity payments stop, and the state will not be able to recover the costs. But what happens if you die after 2 years? In this case, the annuity payments for the remainder of the warranty will continue, but must first go to the state until your Medicaid "bill" paid in full.Then, if all payments must be made, they can go to your family.
So if the Medicaid bill is for two years of Medicaid coverage, it could easily in the amount of $ 96,000 (to be) of which $ 4,000 / month. Since the value exceeds the pension is that the state will receive all remaining payments and your family get nothing.
As you can see to the full amount of the excess funds one Medicaid annuity for an individual purchase rarely makes sense.However, in order to be sure, you just have to "run the numbers": How much money is there to invest in pension? What is the age of the nursing home resident? What is the expected life of the resident? If you know these factors, you can try different scenarios and see if it makes sense to purchase the pension. If not, then other Medicaid planning techniques should rather be taken into account.
