Crunching the numbers when it comes to planning your long-term care can be frustrating and confusing. There are rules and regulations abound, but if done correctly, you could secure long-term care assistance that you would never have thought possible.

Terms for Medicaid in Massachusetts, called MassHealth, can be strict. If you don’t make the grade, you may not qualify for long-term benefits. That can end up costing you, with the average daily price of a nursing home coming in at over $400 in the Salem area. Fortunately, there are ways to work around guidelines like asset limits with options like immediate annuities.

Immediate annuities

When you buy a Medicaid Compliant Annuity, you are handing over a sum of money to purchase a stream of income. The idea is that you take the money that puts you out of the range of Medicaid assistance because of asset limits, then accept it back in payments small enough to keep your eligibility intact regarding income limits.

Stipulations

Your annuity probably won’t qualify for Medicaid if the state classifies it as a transfer of funds. You’ll have to set it up so it counts as an investment that pays out. This can happen when you meet a certain number of standards:

  • Irrevocable: A revocable trust can be altered or canceled, but that won’t work in this case. You can’t adjust the annuity or take funds out, except in the form of your monthly income. You also can’t reassign your annuity to another person or re-sell it.
  • Actuarially sound: Your annuity’s term can’t be longer than your life expectancy, according to actuarial tables. Also, the monthly amount the annuity pays needs to add up to at least the initial cost.
  • State beneficiary: You’ll likely need to name the state the primary beneficiary of the annuity. This is according to the Deficit Reduction Act of 2005, which lays out the stipulations of making your investment Medicaid compliant. In the event of your passing, MassHealth could be entitled up to the amount for benefits paid on your behalf. Exceptions can arise concerning circumstances involving married couples and children.

Getting Medicaid to assist in your long-term care can be a complicated process, but it can also an important one. Make sure you know the rules regarding requirements heading into your planning stages, and you could come out on the other side with all the health care help you need.