Medicaid Friendly Annuities

This blog is intended to explain what a Medicaid Friendly Annuity is.

There are three parts to a Medicaid Friendly Annuity.

These annuities offer a flexible settlement option when a consumer is applying for Medicare.

• What you are attempting to do is turn an asset into an income stream. Medicaid will only consider assets, not income, when determining the amount of monthly benefit you will receive. These annuities are annuitizable on a life contingent basis based on Medicaid’s own life expectancy tables. This means that you will turn that asset into a lifetime income stream. These products offer you a more flexible way to annuitize your premium.
• What you will want to watch out for is how long the look back is for Medicaid’s consideration of what is an asset and what is income. Typically, you’ll want to annuitize and annuity at least two years before applying to Medicaid. 
• There are also Non-Medicaid friendly annuities out there. These are perfectly suitable if there is no consideration in regards to Medicaid. These annuities will only allow you to annuitize for a certain period of time after you have held the annuity a certain number of years. The biggest difference is that the insurance company must annuitize the annuity for life based on Medicaid Life Expectancy tables, not standard life expectancy tables.

Each state, and even county, has a different variation on how long the look back period is. Please, ask your trusted financial advisor for more information.