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What is a Medicaid annuity?

My Dad is being constantly contacted by mail, e-mail, and phone by marketers trying to convince him to get a Medicaid annuity. Are Medicaid annuities a scam?
Status: Open    Jun 01, 2015 - 04:38 AM


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Expert Answers

Jul 29, 2015 - 10:48 AM

First thing to know: Annuity salesmen are salesmen and they feed their families on the commissions they generate. They are also not usually attorneys, so their knowledge of Medicaid is minimal at best. While Medicaid annuities do exist, they have very specific applications and the salesman will be long gone by the time you learn that your's doesn't work. Some states do not even allow Medicaid annuities at all.

My recommendation is to sit down with an Elder Law attorney in your area and discuss annuities along with any other concerns that you might have. The Elder Law attorney can recommend whether the annuity is beneficial or not.


Jul 31, 2015 - 08:04 AM

A Medicaid compliant annuity is a way to spend down money for the purpose of qualifying for Medicaid. It converts a lump sum of money to an income stream. Medicaid annuities are not scams if done properly. Your dad should be sure to talk with an experienced elder law attorney before purchasing any such annuity because there are complicated requirements from Medicaid that must be satisfied in order to qualify. In addition, an elder law attorney may be able to suggest better or more appropriate planning techniques than a Medicaid annuity if dad thinks he may need long term care in the future.
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