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Oh, But That We All Could Live Forever In Our Homes . . . .

Updated: Jun 19, 2023

A perfectly planned retirement will leave you with plenty of money to live out your days in style, pay for medical and even nursing care, and leave a nice little nest egg for your loved ones. So, how many people do you know who have a perfectly planned retirement?


If you're like me, you don't know too many. The fact is, most people do not have adequate savings to cover that last decade of life, despite their best efforts. Most people do not live near family who are able to care for them when they have significant medical challenges--as often happens to seniors who live a long time! Many people require full time or part time care, but their savings do not cover that care. They need assistance from both Medicare and Medicaid.


But what happens when you sell mom and dad's house or when they inherit late in life, causing a bump in liquid assets? Can they lose a shot at Medicaid assistance?


The short answer is, yes. There are several workarounds for this, including funeral trusts/funeral insurance policies and annuities, aimed at "spending down" those assets.


A group of senior citizens in an exercise class with arms outstretched

Medicaid Compliant Annuities in Kansas


A Medicaid compliant annuity is a special type of annuity that is designed to help people qualify for Medicaid benefits. Medicaid is a government program that provides health insurance to low-income individuals and families. In order to be eligible for Medicaid, you must meet certain income and asset requirements.


If you have too many assets, you may not be eligible for Medicaid. However, if you purchase a Medicaid compliant annuity, the value of the annuity can be used to meet the asset requirements for Medicaid. This can allow you to qualify for Medicaid benefits even if you have a significant amount of assets.


There are a few things to keep in mind if you are considering purchasing a Medicaid compliant annuity. First, the annuity must be purchased from an insurance company that is licensed to do business in Kansas. Second, the annuity must meet certain requirements set by the Kansas Medicaid program. These requirements include:

  • The annuity must be irrevocable. This means that you cannot change the terms of the annuity or cancel it once it has been purchased.

  • The annuity must be non-assignable. This means that you cannot sell the annuity to another person.

  • The annuity must be actuarially sound. This means that the insurance company must be able to pay out the benefits promised under the annuity.

  • The annuity must provide equal payments. This means that you will receive the same amount of money each month from the annuity.

  • The annuity must name the Kansas Medicaid program as the first remainder beneficiary. This means that the Kansas Medicaid program will receive the remaining value of the annuity if you die before the annuity has paid out all of its benefits.

If you are interested in purchasing a Medicaid compliant annuity, you should talk to an attorney or financial advisor who is familiar with Medicaid planning. They can help you determine if a Medicaid compliant annuity is right for you and can help you find an insurance company that offers these annuities.


Benefits of Medicaid Compliant Annuities


There are several benefits to purchasing a Medicaid compliant annuity. First, as mentioned above, a Medicaid compliant annuity can help you qualify for Medicaid benefits. This can be a significant benefit if you need help paying for long-term care. Second, a Medicaid compliant annuity can provide you with a steady stream of income. This income can be used to pay for your living expenses, medical expenses, and other costs. Third, a Medicaid compliant annuity can protect your assets. If you purchase a Medicaid compliant annuity, the value of the annuity will not be counted as an asset for Medicaid purposes. This can help you avoid having to spend down your assets in order to qualify for Medicaid.


Drawbacks of Medicaid Compliant Annuities


There are also some drawbacks to purchasing a Medicaid compliant annuity. First, annuities can be expensive. The cost of an annuity will depend on a number of factors, including your age, health, and the amount of money you want to invest. Second, annuities are long-term contracts. Once you purchase an annuity, you cannot get your money back unless you surrender the annuity. This means that you could lose money if you surrender the annuity before it has paid out all of its benefits. Third, annuities are subject to market risk. The value of an annuity can go up or down, depending on the performance of the underlying investments. This means that you could lose money if the value of your annuity goes down.


A medical professional assisting a man who is reading a braille book in his wheelchair

Conclusion


A Medicaid compliant annuity can be a valuable tool for people who are looking to qualify for Medicaid benefits. However, it is important to understand the risks and benefits of annuities before you purchase one. If you are considering purchasing a Medicaid compliant annuity, you should talk to an attorney, financial advisor, and accountant, all of whom can help you make the best decision for your needs. If you think you cannot afford an attorney, you can also begin by reaching out to KanCare for referrals to experts who can help get the ball rolling.


This post was created with the assistance of Bard, an AI technology from Google.

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