Motion Offense & the Restricted Medicaid Annuity

a conversation in our own words…

December 1, 2014

What does a Restricted Medicaid Annuity have to do with Basketball?

motion offense and restricted medicaid annuity

Gates: In basketball, an offense is created through a series of cuts and screens creating the best possible shot with offensive players moving simultaneously. While setting up a Medicaid Annuity is a sanctioned and viable strategy, it should also be considered a wake-up call to producers. We are the offensive team. As financial professionals, we have a fiduciary duty to help clients plan to lead the life they want. That includes working with elder care attorneys to derive strategies for retirement, including living with long term care issues.

Denton: I couldn’t agree more about the importance of long term care planning. The reality is sometimes the best shot is missed. That’s why I want to highlight that this is a permitted product with specific rules laid out in the Deficit Reduction Act of 2005 (DRA) and it has been approved by the states. A restricted SPIA is the only investment product that can immediately qualify a spouse for Medicaid by protecting funds before the spend-down. When properly constructed, a Medicaid Annuity can preserve up to $1,000,000 or more.

Gates: At Clarke, panicking producers contact us after a senior care attorney has called them. The client is in the middle of a catastrophic situation. The spouse is critically ill, and they could lose all of their money and their home. Most people don’t realize how costly long term care can be. You can spend three years in a nursing home and that will eat up $250,000. This is a niche product that requires expert support.

Denton: Most recently, I gave a talk at a broker dealer conference, and it was the same as everywhere else in the country. 90% of advisors haven’t heard of the product or concept. A past and present pitfall has been insurance agents selling immediate annuities promising that income won’t be counted towards Medicaid qualification, and that’s just not the truth. The Medicaid Annuity requires a restricted SPIA with several specific endorsements and restrictions.

G & D: So, here’s what we recommend to get you into the game…

  1. Work with a marketing organization that is an expert in this area. Call us and we’ll educate your advisors and provide the back office support and case management to make sure that your client’s assets are protected.

  2. Always consult with the client’s Senior Care Attorney when working on a case. Additionally, working with such an attorney regularly can provide you with business prospects.

  3. Most importantly, don’t wait until there is a long term care crisis. Take the offense. Contact us and we’ll help you address your client’s long term care needs with hybrid products that offer more than LTC benefits.

Give it your best shot. Contact us at 844.CFG.PLAN (844.245.7526). We’re glad to share our knowledge about The Restricted Medicaid SPIA, and to help you come up with the best offense for your clients with appropriate LTC solutions.


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