Those who follow the news have been hearing all about Medicaid expansion. Since its introduction in 2014, 40 states (including DC) have embraced the new federal regulations. Of the 11 states that have not, Wisconsin is a unique case because despite rejecting the Medicaid expansion, the state does not suffer the coverage gap affecting numerous other states that have done likewise.
Generally, the Affordable Care Act’s (ACA) Medicaid expansion extends coverage to all adults with incomes up to 138% of the Federal Poverty Level. As a result, millions who previously did not qualify for the program but could not afford insurance premiums are now able to access coverage. In states that have rejected the expansion, many low- (but not low enough) income individuals fall through the cracks. However, not in Wisconsin, which covers the gap by providing subsidies. This works, but it breeds confusion.
Many Wisconsinites assume that because theirs is not among the expanded Medicaid states, they are excluded from qualifying for Medicaid when this is not true. This leads a lot of people to overlook the need for Medicaid planning when doing so would be in their best interest.
Medicaid Eligibility: Ensuring You Qualify for Coverage When the Need Arises
Access to Medicaid coverage is important to adults of all ages who may otherwise be ruined by the crippling costs of healthcare. However, aging Americans are one demographic for whom this is especially true. The longer you live, the greater your risk of needing custodial or nursing home care. Often, this comes at a staggering cost that few families can afford. Medicaid is the answer but only if you have organized your finances in a way that ensures you qualify for the program.
In Wisconsin, just like everywhere else, Medicaid qualification is contingent upon meeting certain income and asset limits. As explained, Wisconsinites with an income above the poverty level but below that needed to pay insurance premiums may qualify for subsidies. Meanwhile, middle-income families can gain coverage with a little strategic financial planning as long as they work with time on their side.
Medicaid-compliant annuities are one tool that helps individuals with excess resources meet the Medicaid eligibility criteria without sacrificing their quality of life. When you invest in a Medicaid-compliant annuity, you convert liquid assets into an irrevocable, non-assignable lifelong income stream for you or your spouse.
One of the biggest benefits of using an annuity to meet Medicaid’s eligibility requirements is that doing so does not violate the so-called five-year “look back” period the program uses when assessing applicants. This refers to a policy wherein Medicaid’s administering agency reviews the last five years of a person’s financial history to ensure they have not simply given away assets to qualify for the program. However, investing in a Medicaid-compliant annuity isn’t a transaction subject to penalty as doing so converts rather than disposes of assets.
Nevertheless, it’s important to know that the rules governing annuities are very strict and detailed. A lot of vendors will sell you an annuity but not all of them will provide one that works for Medicaid eligibility purposes.
A financial services firm specializing in insurance solutions is your best resource for ensuring that the energy you invest in Medicaid planning is well-spent and effective. Legislation is always changing and not everything you read online is accurate. As is clear from the confusion stemming from Wisconsin’s rejection of the Medicaid expansion, seeking professional counsel is crucial to gaining accurate information.
To learn more about how you can be sure you have access to the care you need as you age, do not hesitate to reach out to AshBer either by using the contact form on our website or by calling us at (888) 441-1595.