Helping you qualify for Medicaid long-term care services
When an individual or couple wants to apply for Medicaid long-term care, their assets and income above a certain amount can render them ineligible. Gifting without proper guidance will result in a Medicaid penalty.
We understand that the Medicaid application process can be daunting and confusing, but you don’t need to sell off or give away your assets—and in fact, you shouldn’t. Please consult with our team to develop an individualized strategy to maximize what you have while maintaining Medicaid eligibility.
What Is a Medicaid Compliant Annuity (MCA)?
When you apply for long-term care services through Medicaid, a county caseworker reviews your assets to ensure they aren’t above a certain amount. They also document all gifts with a presumption that any asset given away within five years of the Medicaid application was done to create Medicaid eligibility.
If you’re married, both spouses’ assets are counted in determining Medicaid eligibility—even if they’re in the name of the spouse who isn’t applying.
When you buy an annuity, you pay an insurance company a lump sum that they are contractually obligated to return to you in monthly installments.
A Medicaid Compliant Annuity may be a good idea for you if:
- You have assets or savings, but not enough to pay for long-term care indefinitely
- One spouse needs long-term care and there are concerns that the other spouse may become impoverished as a result
- You made financial gifts during the five-year Medicaid “look back” period and are temporarily ineligible for Medicaid
- You wish to protect your assets for beneficiaries
At NJ Elder Law Center, our legal team is dedicated to walking you through the entire process from start to finish.
Too often, people spend their life savings on long-term care before reaching their eligibility for Medicaid. This isn’t necessary. Working with a Medicaid planning law firm can help you qualify while retaining hard-earned assets.
At NJ Elder Law Center, we’ll answer your questions and support you throughout the entire process.
Why a Medicaid Compliant Annuity Can Help
To be eligible for Medicaid long-term care services, including nursing home care, an individual or couple must have assets that fall under specific financial limits.
People whose financial assets exceed these limits must pay privately for care—which costs $10,000-$15,000 a month in New Jersey—until their savings are gone.
Alternatively, they may give assets away to family members or friends. Unfortunately, this tactic usually backfires, as the Medicaid application process includes a “look back” period, and gifts made in the last five years are penalized and delay Medicaid coverage.
Using annuities can be especially useful for couples when only one person needs long-term care since the Medicaid application process considers the couple’s assets as jointly owned but treats income separately.
Certain assets are considered exempt from being counted toward the Medicaid asset limit, including:
- The primary home
- Personal items
- Household items
- A car
- An irrevocable burial trust
What Makes an Annuity Medicaid Compliant?
Most annuities are NOT Medicaid compliant.
To be Medicaid compliant, an annuity:
- Must be irrevocable, meaning that it can’t be changed or undone
- Must be non-transferrable, meaning that it can’t be sold or transferred to someone else
- Can’t establish payments that last for longer than the applicant’s estimated life expectancy
- Must name the State of New Jersey as the primary beneficiary for the amount spent on the person’s care
Assets that can be converted into a Medicaid Compliant Annuity include:
- Investment accounts
- Existing annuities
Annuities and Marital Status
Annuity rules vary according to marital status. If you’re single and in a nursing home, you can only keep a minimal amount each month to spend on personal needs. The rest of the annuity must go toward paying the care facility. If you’re receiving at-home care, however, the limit is higher.
Work with an Experienced Medicaid Professional
At NJ Elder Law Center, our legal team has extensive experience helping individuals and couples set up Medicaid Compliant Annuities.
To accomplish this, we’ll listen closely to your goals and concerns, answer your questions, and work with you every step of the way.
Serving New Jersey, New York, Pennsylvania, and Colorado