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  • Writer's pictureAmber Hinds

Do all Insurance Companies Offer Medicaid Compliant Annuities?

No! Only a handful (less than 10) insurance companies nationwide offer Medicaid Compliant Annuities.

If you’re searching for an insurance company that offers a Medicaid Compliant Annuity, it is important to know that a Medicaid Annuity is a specific type of Single Premium Immediate Annuity (SPIA). A SPIA is a contract issued by an insurance company used to convert a one-time lump-sum of money into an income stream. For example, an annuity owner may make a one-time deposit of $200,000 into a SPIA which will return 60 payments of $3,400 back to the owner. Once the SPIA is purchased, the original deposit of $200,000 is no longer available to the annuity owner as a lump-sum, instead he/she is only entitled to the monthly payments of $3,400.

In general, in order for an annuity to be “Medicaid Compliant”, the annuity must be completely irrevocable (all aspects of the contract – annuity owner, payee, payment amount, etc), non-assignable, make equal payments, be actuarially sound, and name the State Medicaid agency as a remainder death beneficiary to the extent Medicaid Benefits are provided.

While hundreds of insurance companies offer SPIAs, less than 10 companies offer MCAs that contain the language outlined above. Therefore, it is important if you are considering purchasing an MCA, that you work with somebody who is knowledgeable of the requirements in your State.

If you have questions about MCAs, please contact us via phone 888.441.1595 or click here!

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