c5a83c_895fef9adff94195bcc0ecf5fbf4d82cDue to a lack of planning, many individuals end up in long-term care situation and are faced with having to spend-down their savings before they can qualify for Medicaid. This will often deplete the savings and limit the income of the healthy or surviving spouse. However, there may be relief available using a Medicaid-Compliant Immediate Annuity. The goal is to qualify the institutionalized spouse for immediate Medicaid eligibility in order to pay for long-term care, while providing the spouse with sufficient income and resources to maintain his or her lifestyle.

These special annuities are available due to the Omnibus Budget Reconciliation Act (OBRA) of 1993. However, the following restrictions must be in place on the annuity in order to qualify for Medicaid.

  • Nontransferable. Nonforfeitable. Nonassignable. Noncommutable. Irrevocable.
  • No Change of Payee
  • No Change of Payment Option
  • The Contract has No Cash Value
  • Right to Return the Contract (within 10 days of receipt)

None of us want to see our clients in a long-term care situation especially when they haven’t put a plan in place. However, using a Medicaid-Compliant annuity can make a real difference to a surviving spouse and often protect an additional amount of assets for unmarried clients. 525 Advisors can help you with unique option and will be glad to answer any questions you have.