MEDICAID COMPLIANT ANNUITY
ACCELERATE YOUR CLIENT’S MEDICAID ELIGIBILITY AND HELP PRESERVE THEIR ASSETS
A Medicaid Complaint Annuity (MCA) is a powerful tool that agents and advisors can utilize in crisis planning to achieve a better solution for their clients who are facing a costly nursing home stay.
✓ Accelerated Medicaid Eligibility
✓ Asset Preservation
✓ Peace of Mind
Uncover Medicaid Compliant Annuity Tools, Training, and More
A Medicaid Compliant Annuity is a Single Premium Immediate Annuity (SPIA) that provides income to the owner and contains zero cash value. When properly structured, this annuity functions as a spend-down tool that eliminates excess countable assets, allowing the nursing home resident to become eligible for Medicaid benefits.
TO BE MEDICAID COMPLIANT, AN ANNUITY MUST:
Be Irrevocable
The payment amount, term, and parties to the annuity contract cannot be altered.
Be Non-Assignable
The annuity contract cannot be assigned to another party or sold on the secondary market.
Be Actuarially Sound
The term of the annuity must be fixed and equal to or shorter than the owner’s Medicaid life expectancy, which is determined by either the life expectancy table published by the Chief Actuary of the Social Security Administration or the state’s specific life expectancy table, depending on what is outlined in each state’s Medicaid manual.
Provide Equal Payments
The annuity contract must provide equal monthly payments with no deferral or balloon payments.
Name the State Medicaid Agency as Beneficiary
In most cases, the state Medicaid agency must be named primary death beneficiary to the extent of benefits paid on behalf of the nursing home resident. Exceptions to this rule vary by state but may apply in certain cases involving a married couple or a minor or disabled child. If a particular case qualifies for an exception, the state Medicaid agency typically must be named contingent beneficiary.
A MEDICAID COMPLIANT ANNUITY
MAY BE RIGHT FOR YOUR CLIENT IF THEY:
Are residing in a nursing home
Have exhausted Medicare or Long-Term Care Insurance benefits
Are paying out of pocket for care
Have excess countable assets
ADDITIONAL PRODUCT INFORMATION
The Medicaid Compliant Annuity is available in 48 states and the District of Columbia. The SPIA is irrevocable, non-assignable, and typically must name the state Medicaid agency as beneficiary. It has zero cash value and is considered income only. An MCA can be funded with either non-qualified or tax-qualified funds. The minimum investment amount is $5,000, and the minimum term length available is two months, in most states.
When it comes to choosing the product and carrier that is best for your client, we’ve got you covered. We work with multiple dependable insurance carriers to supply you with the best products to help your client gain eligibility for benefits, including three exclusive carriers and four companies with an A.M. Best rating of A- or higher. Our carriers also offer terms as low as two months with products available in 49 states and the District of Columbia. And they work as hard as we do to help your client become eligible for benefits.
Commissions for the writing agent are available on annuities starting at 24 months. Commissions vary by insurance carrier as well. For specific information regarding the commissions available to you, please contact our office directly. Beyond commissions, we also make it easy to charge a processing fee and ensure you get paid for your hard work on short-term annuities using our Agent Advantage program.
The specific plan for using an MCA can vary greatly depending on marital status, state of residence, and other factors. In cases involving a married couple, the MCA can be purchased by either the community spouse or institutionalized spouse. Either way, the institutionalized spouse gains immediate Medicaid eligibility following the purchase of the annuity. A single person, on the other hand, may consider the Gift/MCA Plan or Standalone Plan to accelerate eligibility by creating a wealth transfer to their heirs.
To qualify for Medicaid, the applicant must be 65 years of age or older or disabled. They must also be a U.S. citizen or qualified alien. Since the Medicaid program is administered at the state level, states have their own residency requirements. Most importantly, the applicant must be residing in a Medicaid-approved facility – typically a skilled nursing home. Some states may have waiver programs that extend benefits to include assisted living facilities or at-home care.
Having too many countable assets is the primary reason most people don’t qualify for Medicaid. In most states, a single person or institutionalized spouse can typically keep $2,000 as their Individual Resource Allowance. The Community Spouse Resource Allowance varies by state. The Medicaid asset restrictions often require applicants to spend down thousands of dollars. Purchasing a Medicaid Compliant Annuity allows them to accomplish this in a quick and efficient way.
INTERESTED IN A MEDICAID COMPLIANT ANNUITY?
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