A Quick Look into MCAs

A Quick Look into MCAs

Medicaid is a health insurance program for certain low-income and needy people paid with federal, state, and county dollars. It covers more than 1 million people in our state, including children, the aged, blind, and/or disabled, and people who are eligible to receive federally assisted income maintenance payments. North Carolina Medicaid includes Baby Love for prenatal and infant health care, Health Check for children up to age 21, Carolina ACCESS for managed care, and community alternatives to provide home and community care as a cost-effective alternative to institutionalization. Covered individuals are elderly or disabled individuals, children and their parents, persons needing long-term care and some Medicare recipients.

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 terms of the contract cannot be changed.

Non-Assignable

The annuity cannot be assigned or sold to another party.

Equal Payments

The contract must not have any deferral or balloon payments.

Actuarially Sound

The annuity must have a fixed term within the owner’s Medicaid life expectancy.

State as Beneficiary

The state Medicaid agency must be the primary beneficiary in most cases.

In most states, a single person or institutionalized spouse can typically keep $2,000 as their Individual Resource Allowance.

Without financial assistance, the median cost of a semi-private room in the U.S. is $7,908 per month.

Qualifying for Medicaid benefits can provide much-needed financial relief to those receiving long-term care.

 

EXEMPT v COUNTABLE

 

EXEMPT ASSETS

NOT considered when determining Medicaid eligibility

Primary residence

One vehicle

Personal effects

Funeral Expense Trusts (up to $15,000)

COUNTABLE ASSETS THAT

ARE considered when determining Medicaid eligibility:

Checking/savings accounts

CDs, stocks, and bonds

Deferred annuities

Additional real estate and vehicles

IRAs (in most states)

Ryan Begley

Benefits Specialist