Disclaimer: With Medicaid, VA, and insurance regulations frequently changing, past blog posts may not be presently accurate or relevant. Please contact our office for information on current planning strategies, tips, and how-to's.
During April’s Financial Literacy Month, we’ve been exploring the financial impact of long-term care and the importance of helping clients plan for a care need. Now that we’ve covered the value in planning ahead and which clients to discuss Long-Term Care Insurance with, what can you do if it’s too late for LTCI?
Did you miss last week’s post? Check it out here:
Top 5 Clients to Discuss LTCI With
How to Help Clients Who Didn’t Plan Ahead for Care
In reality, most people assume they will never need professional care, or they refuse to think about needing long-term care until it’s too late to plan properly. By the time they do decide to plan for their care, they may no longer be eligible for Long-Term Care Insurance. Fortunately, even if it’s too late for your client to qualify for LTCI, it’s still not too late to protect their assets from a long-term care need.
With our help, you can provide an alternative solution to protect your client’s hard-earned assets from a long-term care stay. If you have a client who failed to plan ahead or did not qualify for LTCI who is already in a nursing home or about to enter one, you can use a Medicaid Compliant Annuity.
What is a Medicaid Compliant Annuity?
A Medicaid Compliant Annuity (MCA) is a specialized insurance product that is designed to spend down excess countable assets and accelerate Medicaid eligibility for individuals who did not plan ahead for their long-term care. An MCA can be used as an alternative to LTCI for clients who waited too long and no longer qualify for a policy. However, it can only be used in crisis situations for clients who have an immediate care need.
How Does an MCA Work?
An MCA converts the countable assets preventing your client from qualifying for Medicaid into an income stream with zero cash value. With these excess assets eliminated, your client can qualify for benefits. Medicaid is actually the primary payer of long-term care in the United States and will cover most, if not all, of your client’s monthly nursing home bill.
Who is an MCA Appropriate for?
An MCA may be right for your client if they:
- Are already residing in or about to enter a nursing home
- Have exhausted Medicare or other benefits
- Are paying out of pocket for care
- Have excess assets preventing them from qualifying for Medicaid
MCA Requirements & Strategies
In order to be Medicaid compliant, an MCA must be irrevocable, non-assignable, and actuarially sound. It must also make equal monthly payments and, in most cases, name the state Medicaid agency as the primary beneficiary. Strategies for using MCAs vary depending on your client’s marital status, state of residence, and other case facts. Fortunately, when you work with our team at The Krause Agency, we provide a complimentary analysis of your client’s case and first-class support from start to finish.
Do you have a client who no longer qualifies for LTCI and may benefit from a Medicaid Compliant Annuity? If so, we invite you to schedule a call with one of our in-house advisors to discuss your client’s case in more detail.