Medicaid Case Study

Medicaid Annuity Planning Brief Case Study (Single Person)

For a single person, did you know that if you need a nursing home, you can only keep $2,000 of financial resources?

Mary is single, 85 and in need of a nursing home. She transferred her primary residence years ago to her daughter. She has $250,000 of additional financial resources and receives income of $1,500 per month. If she needs a nursing home, she has to spend $248,000 down.

In her case, Mary’s cost of care will be $10,000 per month. If she does nothing, she’ll have to spend all of her money down. On the other hand, she could work with an elder law attorney, and one of the options may be a “Medicaid Compliant Annuity” (MCA). In Mary’s case, given the numbers, she would be able to gift approximately $140,000 to her children in conjunction with purchasing an annuity. The annuity would pay for her cost of care, and is timed to run out when she is eligible for Medicaid.

Of course, every case is very different and the facts are typically more complex. But it’s important to understand there are options out there, even if you did not engage in any pre-planning. 

Interested in Medicaid planning, either pre-planning or crisis planning? Please contact our office for an appointment today.