Medicaid Annuities - Scam or Benefit?

Published: 17th August 2009
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While the popular belief is that Medicaid is only for the underprivileged that is not really the case. In Florida, and in many other states, even the middle class with substantial assets can be eligible to receive this kind of coverage for nursing home or assisted living care. This is where the term "Medicaid Annuities" comes in. Medicaid Annuities are basically a strategy to legally move your countable assets into non-countable asset categories for Medicaid purposes so that you become eligible for Medicaid. One alternative would be to exhaust your assets (often known as a "spend down") to the point where you become eligible for Medicaid support. Naturally, this is not an option favored by many since it leaves nothing left for your spouse or heirs. A properly annuity is exempt or treated as a non-countable asset, so it can be retained even while receiving Medicaid benefits. However, if you look a little closer, this may not really be a financially beneficial strategy for everyone.

Medicaid annuities are non-revocable, which means that, even if you move out of the nursing home, your money stays locked in an annuity that you cannot access. Another point to consider is that, while Medicaid authorities cannot force a person to liquidate the annuity, they can take the annuity payments to offset their own medical expenses in looking after the sick person. What's more, if the person in question dies, the law in many states allows them to claim the total amount spent by the state from the insurance or Annuity Company. That can mean very little benefit for the person concerned. So, while it may not be prudent to call Medicaid annuities a scam, they may not have the same advantages for everyone. Medicaid annuities have more advantages for couples or spouses than for a single person, since they help protect the spouse's assets.

Medicaid rules vary from state to state so it is a good idea to consult an elder care attorney licensed in your state to get the complete picture. You can go to my website and learn more on Medicaid from my free articles, download two chapters of my book "Protecting Your Family's Assets In Florida" or, if you or your loved one lives in Florida, request a free telephone consultation with me. Please understand that a lawyer can help you calculate the overall costs and benefits in your situation to help you decide the most favorable course of action. They may be able to help you restructure the assets of the person needing nursing home care from the non-exempt to the exempt category so that they can become eligible for Medicaid. This includes exploring options outside of annuities to secure Medicaid. The right Medicaid lawyer's support can make a huge difference in the money that you may end up spending overall and pass on to your spouse or heirs, so make an informed decision. Look for attorneys that have sufficient prior experience in handling these types of cases. Don't be afraid to ask them how many cases they have done in the past. The laws are different from state to state and have many distinctions that only a seasoned lawyer from a particular state will be familiar with. For Florida Medicaid, only a lawyer practicing in Florida with wide experience in Medicaid planning would be best equipped to evaluate your options. Also, do be aware that insurance salespersons or financial planners often have a financial interest in your purchasing an annuity while lawyers are ethically and legally bound to give you only advice that is in your best interest.

A complimentary download for you of two chapters of Attorney Frazier's book on Protecting Your Family's Assets In Florida , more in depth articles as well as a complimentary consultation for you by telephone or in person with Attorney Frazier is available now by going to

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