Nursing homes cost a small fortune to provide care, but they might be a necessity for your loved ones. Medicaid limits could make it hard for some to get help covering costs, but annuities may hold the answer you need.

A shared room in a care facility in Rochester will likely cost you nearly $150,000 every year. That number may be so high that help seems impossible, but Medicaid could drop that number by 70%. Not everyone qualifies for government assistance, though handing money over for an annuity could solve your planning problems.

Healthy requirements

Medicaid has several requirements, like being a New York resident or being over the age of 64, but often the most demanding qualifier is the amount of money your loved one has. Getting them under the income and asset limits may seem tough, but putting money into an annuity could solve the long-term problem without losing assets.

Counting care

Annuities work by removing funds from your loved one in a lump sum, then paying them the money back over a period of time. This means the government won’t count the money toward their limit, but there are some things to remember:

  • Irrevocable: Once you pass the money into the annuity, there can’t be any going back. While there are revocable annuities, they probably won’t make the cut when Medicaid takes a look. You must surrender control of the grand total, otherwise it could still count against your family’s funds.
  • Actuarial: The policy has to pay out what you put in and within the limits of their actuarial life expectancy. There are also limits for deals with a set number of payments, as they need to be shorter than life expectancy. You can’t get under income requirements by stretching payments far into the future.
  • Beneficiary: The state might be the first in line to receive compensation from the annuity once your family member passes. You will generally need to name them as the primary beneficiary, but they may move to second after spouses, young children or dependents with disabilities.

Long-term care is incredibly expensive, but your family may not have to foot the bill on their own. Make sure you understand how Medicaid looks at income and assets, and you may have the answer to your planning needs.