If you are petitioning for Medicaid coverage of nursing facility care and services, you may find yourself subject to a five-year "look-back" to assess your assets and finances, as well as an evaluation of your current assets to decide eligibility for coverage. When you took out a life insurance policy, also known as an annuity, you never thought it might factor into assets determining eligibility for Medicaid coverage. Yet now an assessment is questioning that annuity, so is it officially an asset under New York state law?
Yes. The New York State Department of Health outlines how annuities work when dealing with transfer of assets during application for Medicaid coverage. In short, the value of the annuity must be evaluated before the annuity itself is adjusted to make the state the remainder beneficiary of the annuity upon policy execution, covering the amount of Medicaid paid out during the period of coverage. This means that when your life insurance policy takes effect, part of the payout will go to the state to cover your Medicaid costs.
This may change if you have a spouse or surviving child who is also a beneficiary. In this cause the state becomes a remainder beneficiary in the second position; that is, the concerns of payment in the amount of Medicaid coverage are secondary to disbursement of life insurance funds to your surviving spouse and children. You are required to disclose all annuity information during the application and review process.
This has been an educational blog post designed for information purposes, and is not a substitute for legal advice.