Example of assets and Medicaid annuity
1. Using $200,000 as the base 'assets'; split it into $100,000 to purchase a qualifying medicaid annuity and $100,00 into an irrevocable trust
2. Purchase $100,000 annuity and establish $100,000 trust (let's assume annuity runs for approx 14 months) June 1st, 2012
3. Apply for Medicaid July 1st, 2012
4. Medicaid performs review and claims $50,000 in gifts were made in previous 5 years and should be counted -- what exactly happens at this point?
Can the original $100,000 annuity be adjusted upwards to become a total of $125,000 with a total of a 16 month penalty
or can you purchase a 2nd $25,000 annuity and stick the rest into the irrevocable trust (or a 2nd trust) with a 2 month penalty?
or does Medicaid say, sorry, you can't do anything with that $50,000 except use it all to extend the original penalty period for
$50,000 / 8112 = 6 more months on top of the original 14 for a total of 20 months?
or is there something more that Medicaid does at that point?
5. As the result of step #4, when does the penalty period start and how long until Medicaid payments begin?
6. What actions does Medicaid take if my mother lives several years, uses up the annuity, begins receiving Medicaid payments and then dies after 1 year?