Planning for Medicaid can be a complicated undertaking, especially when it comes to meeting low asset limits. Getting rid of all your assets outright doesn’t seem like a sensible solution, and it may not be necessary.
Medicaid provides coverage for millions, but the requirements usually include coming in under accepted yearly household incomes. Getting down that low may not seem feasible, but purchasing annuities can be a good way to get you there. As long as you know what annuities qualify, you could keep your standard of living while getting the expensive medical care you’ll need.
Immediate annuity
To get under the asset limits for Medicaid, you could hand over your money in a large sum to an insurance company to gain an immediate irrevocable annuity. Rescinding control of your assets means that they likely won’t count against you later. And in exchange for the lump payment, you’ll receive a recurring payout for a set amount of time.
Deferred annuity
Once you invest your money in a deferred annuity, you’ll usually be able to select when you start receiving your payments. The selective redemption is typically what makes the deferred annuity a countable asset, likely allowing Medicaid to still count it against your overall assets.
Payment types
The amount you receive every month could change with variable payments, depending on the performance of the underlying investment. Either type, immediate or deferred, could be eligible for an adjusted payout. But your income from an annuity usually needs to be the same every month to remain qualified, which means your immediate annuity could become disqualified with flexible installments.
Make sure you understand the rules regarding limits for Medicaid. Purchasing the wrong investment could make the difference in getting assistance down the line.
