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Medicaid Income First Rule

Medicaid Income-First Rule-Community Spouse Income

The new law also restricts the use of annuities. Previous law would not count annuities that were "actuarially sound" as resources for determining Medicaid eligibility. Being "actuarially sound" merely meant that an annuity would pay out in full during the life expectancy of the applicant. Some states would permit `balloon' annuities, which would pay out small distributions, but provided for the annuity to be paid in full with a large balloon payment in the final month of the annuitant's life expectancy. These `balloon' payments are no longer allowed. Furthermore, in order for an annuity to qualify, the annuitant must name the state an irrevocable beneficiary for the annuity to qualify. If the applicant has a spouse or disabled or minor child, then the state must be named irrevocable contingent beneficiary after the spouse or disabled or minor child.
A recent landmark case in a Federal Pennsylvania court may have changed many of the rules described above. Contact your Medicaid expert advisor to find out more.
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