It’s never too late to plan for the needs of a healthy spouse
it’s crucial to help families navigate the complexities of Medicaid while preserving their financial security. One effective strategy when one spouse enters a nursing home and the other remains at home is the use of Medicaid Compliant Annuities (MCAs).
Yes, a Medicaid Compliant Annuity (MCA) can be purchased even after one spouse has entered a nursing home, and it can still be an effective tool for shielding funds from Medicaid’s asset calculation and estate recovery (often referred to as Medicaid clawback).
In short, even if a spouse is already in a nursing home, purchasing an MCA can help shield the couple’s assets, provide financial security for the healthy spouse, and minimize or avoid Medicaid estate recovery, all while complying with Medicaid’s legal requirements.
Here's how it works:
1. Immediate Medicaid Eligibility:
When one spouse is already in a nursing home, the couple’s combined assets may exceed Medicaid’s eligibility limit for the institutionalized spouse. By purchasing an MCA for the healthy spouse, excess assets can be converted into an income stream that is exempt from Medicaid’s asset limits. This ensures that the institutionalized spouse can qualify for Medicaid without needing to spend down assets unnecessarily.
2. Protection for the Healthy Spouse:
3. Shielding Assets from Medicaid Estate Recovery:
Medicaid may attempt to recover costs from the estate of the institutionalized spouse after their passing. However, funds used to purchase a Medicaid Compliant Annuity are no longer considered part of the institutionalized spouse’s estate, which can help shield those assets from Medicaid’s estate recovery efforts. The annuity provides protection by ensuring that the community spouse retains income, while keeping assets out of reach of Medicaid clawback.
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