If your spouse has recently been admitted to a nursing home, there is planning that can be done to qualify your spouse for Medicaid benefits. Medicaid is the joint state and federal program that pays for the costs of long term care in a nursing facility. The average monthly cost of nursing home care in Pennsylvania is over $8000. If your spouse does not qualify for Medicaid, much of the family savings can be exhausted paying for your spouse’s care. Qualifying for Medicaid is difficult given the limit on resources that a person may own when their spouse enters a nursing home. These “excess resources” typically need to be spent on nursing home care before the spouse in the nursing home will qualify for Medicaid.
However, the use of an irrevocable immediate annuity can help shelter these excess resources for the community spouse and qualify the institutionalized spouse for Medicaid. Annuities are contracts where a financial institution agrees to return the principal invested with interest either in a fixed sum or at intervals at some point in the future. The annuities used for Medicaid qualification return the sum invested immediately in equal monthly payments over a number of years, not to exceed the life expectancy (as determined by the Social Security Administration) of the person who acquires the annuity.
To qualify the spouse in the nursing home for Medicaid, the excess resources are invested in an immediate annuity for the benefit of the healthy spouse who is residing in the community. The community spouse then receives a monthly sum from the immediate annuity that can be added to his or her income and used for living expenses. The purchase of these Medicaid Qualifying Annuities is done at the time the spouse in the nursing home needs the Medicaid benefits. The terms of the annuity must meet very stringent Federal and State requirements.
If your spouse or parent is facing a nursing home placement and is in need of Medicaid qualification, don’t hesitate to contact Marshall, Parker & Weber to schedule a consultation and learn more about Medicaid Qualifying Annuities or other planning techniques.