Can Medicaid Claim Your own Immediate Annuity as an Asset for Payment of your respective Spouse’s Medicaid Benefits?

A judgment by Third Circuit Court regarding Appeals (affecting New Jersey, Pa and Delaware) addressed Pennsylvania's Department regarding Public Welfare (DPW) claim that your immediate annuity paid to a wife of the man in a nursing home may be considered as an asset with which to spend his Medicaid costs.

The problem was whether an institutionalized wife or husband (i.e. husband within the nursing home) will qualify for Low income health programs assistance since a state may consider a married couple's assets * including cash, stocks, bonds and house for payment. The community partner (i.e. the better half at home) is afforded a portion of the assets to live about. But any excess is actually deemed an 'available asset' that can be used to cover nursing home costs. Medicaid starts once that 'excess' money has been fatigued. Interestingly, though, the law discourages the state from considering the income with the non-institutionalized spouse - known as the neighborhood spouse - in that calculations.

In the case, Robert James had been admitted to a Wilkes-Barre nursing home. During those times, he and his wife acquired total assets of $381,443, ones roughly $278,000 was looked at as 'available assets' useable for Robert's care. The actual wife, Josephine James, bought a good immediate annuity for herself with $250,500 of these assets, leaving simply no available assets for her husband's treatment under Medicaid rules.

The lady claimed that her annuity ended up being now an 'income stream' for the local community spouse. So it's no longer the asset and can't be counted when figuring out the institutionalized spouse's Medicaid eligibility. The particular DPW argued it was because the lady could sell the 'income stream' for the lump sum.

The Appeals courtroom said Medicaid rules claim that an asset can only be looked at as 'available' if the owner has the ability to liquidate the idea without incurring legal legal responsibility. But, her immediate annuity was non-transferable and non-revocable. Consequently selling it would break anything, subjecting her to authorized liability. Therefore the court dominated her immediate annuity couldn't be considered an asset. Josephine gained.

But, Pennsylvania amended it's law to forbid dealers of income annuities from including a offer that makes them non-transferable and thereby let income annuities to be sold without legal culpability. Such immediate annuity can be considered assets pertaining to Medicaid purposes.

Will your current immediate annuity in your state be considered an asset regarding Medicaid purposes? It depends on your own state.