Medicare Compliant Annuities

[Mr_Ed]

An interesting question for the attorney would be this:

"How do you plan on making sure Mrs. Smith is still eligible for Medicaid after Mr. Smith receives his first of five annuity payments?"

The attorney needs to put that in writing. Because I don't see how in the world it can be done.


To think that you could be held liable for NOT writing the application is ridiculous. You do not have a monopoly on SPIA's. They can buy an SPIA right over the internet, for pete's sake. ( Immediate Annuities - Instant Annuity Quote Calculator. )

The bottom line is that this "planning technique" is very likely to "blow up in their faces" this time next year.

If you're in this business for the long haul, I think you'd make more money by telling them that they need a second opinion, rather than, one year from now, have the husband, the son, and all their friends and relatives chew out you and the attorney for bad advice.

If you tell them what they don't want to hear now, you'll earn their trust and you'll make a lot more money (handling all their insurance and investments needs over the next 20 years) than just the commission on this SPIA. And, I think that the client who referred you, referred you because he figured you'd do the right thing for them.

But, what the hell do I know.
I'm wrong about everything.
Just ask my ex-wife.

 

[golfnut]

Lincoln Financial and Genworth

 

[annuityseller]

guys I just hooked up with a nation wide medicaid specialist company (NESA) and they will not recomend those types of annuties in there medicaid planning period, A lawsuit waiting to happen. www.neascares.com . I think this is a chance to make some extra money for agents and financial planners. Talk to Hal the owner and tell him Keith Page sent you. And no I don't make any money recommending people to sign up

 

[CALTCAgent]

These were quotes taken from previous conversations that were never answered.

"When he gets the check this time next year from the insurance company for his first $160,000 "income payment", what is he going to do with it?"

"But if he deposits that check somewhere, won't it, at that point, become an asset?"

"And, if it is an asset at that point, then isn't it above the $109k limit for the CSRA? If so, about half of it (about $80K) would have to be spent on her care before she could re-qualify for Medicaid

I am curious about these questions too, any answers?

Can he do another SPIA with the income and avoid being a countable asset?

If the income becomes a countable asset, I would not see any cases where a medicaid annuity would work, Any situations where they work?

Thanks!

 

[Rod in SC]

I think that once the institutionalized spouse qualifies for Medicaid they don't have to re-qualify every year.
Once asset levels were satisfied to qualify and since the income of the well spouse is not countable, the state would not know how much money the well spouse has accrued from income AFTER qualification unless they require a new application each year?
I'm not sure but I don't think the state makes a recipient re-qualify for medicaid LTC after initially approved. I could be wrong.

 

[Mr_Ed]

I think that once the institutionalized spouse qualifies for Medicaid they don't have to re-qualify every year.
Once asset levels were satisfied to qualify and since the income of the well spouse is not countable, the state would not know how much money the well spouse has accrued from income AFTER qualification unless they require a new application each year?
I'm not sure but I don't think the state makes a recipient re-qualify for medicaid LTC after initially approved. I could be wrong.

Rod,

We don't know what state the original poster is in, but under rules that were in effect in SC since 1/1/2009, it's very possible that the OP's strategy did NOT work.

SC rules state:

4. If the individual can show that assets were transferred for some reason other than to qualify for Medicaid. For example, an individual may have been elderly or had a disabling condition at the time of transfer, but did not need nursing home care. Subsequent to the transfer, the individual's condition deteriorated so that nursing home care became necessary. This individual would not be penalized for a transfer that occurred prior to the time his/her health deteriorated.


That's exactly what this person was doing. They transferred countable assets into an SPIA for the purposes of qualifying for Medicaid. Their application for Medicaid could have been denied for that reason alone.

Even if it was approved, however, keep in mind that the Medicaid worker KNOWS that the healthy spouse is getting a HUGE annuity payment in the next few months. In light of the budgetary crises most states are having, it would not surprise me if they followed up with this gentleman and had him fill out a new application.

In fact, any change in financial circumstances is supposed to be reported to them by the beneficiary within 10 days of that change.

Additionally, the state Medicaid offices are able to share their information and receiving information from other federal and state agencies, including the IRS.

Here's a link to the form that they need to fill out. It's quite an eye opener:

South Carolina Department of Health and Human Services 1296 ME.pdf

 

[GeorgeTrue]

This has been a most interesting thread. Some years back, I considered myself fairly knowledgable about getting people qualified for Medicaid. But after the rules changed, it seemed like it became a lot more confusing, and I quietly backed away from trying to help any more clients become Medicaid qualified.

For clients who don't have LTCI and due to health or advanced age would have to pay a fortune in premiums to get it, I like the long term care annuities that have been available from a small handful on companies in recent years. There is very minimal underwriting to qualify, and the waiting periods are in my opinion reasonable. And if they end up not needing long term care, they still have their money in the annuity.

Even if one qualifies for Medicaid, it is no longer "free". I am not sure how it is in other states, but here in Arizona, the state will go after the estate of the individual after they die to recover whatever was spent on them by Medicaid. So while the house and one car and possibly certain other assets may indeed be exempt, it does not mean the state won't file a lien on the house after the Medicaid recipient has passed on. What is the policy on this in other states?