Is an Annuity Protected from Medicaid?

Q: I was told, by a senior financial advisor that an annuity is a way of safe guarding your money so Medicaid can not touch it and count it as an asset if you take it out five years before needing to go into a care home. He said it used to be 3 years, but Medicaid change the duration to 5 years.

A: I'm not sure I would want to trust an insurance agent on this one. Think about it... The government isn't going to allow people to put their money into an annuity where they can still have access to it and then allow them to receive Mediciad.

This tactic was being used before the recent change in legislation. My understanding is that a contract that is annuitized won't affect Medicaid eligibilty, but that's because the monthly payment must get used before Medicaid pays anything.

If in doubt, call the Medicaid office and ask them.

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