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Bill regarding Medicaid and annuities

New York residents who are recipients of Medicaid should know that a proposed bill would toughen the rules covering annuities calculations for Medicaid coverage formulas. The bill, which is referred to as the Close Annuity Loopholes in Medicaid Act, or CALM Act, was proposed by a congressman from Oklahoma who asserts that numerous individuals who are able to pay for nursing home care are hiding their assets by placing their money into annuities.

According to an essay published by the congressman, the Government Accountability Office reported that some people who are on Medicaid are shielding assets of over $1 million. He stated that policies such as the CALM Act can be used to ensure that Medicaid is available for those truly in need instead of those who are hiding their significant incomes.

Medicaid is a program that was created in 1965 and that uses a combination of state and federal funds to cover the costs of health care for poor individuals and for nursing home care for residents who qualify. An individual's or couple's assets can often be structured so that they are able to qualify for Medicaid benefits for nursing home care, the cost of which can be as high as $80,000 per year. Under the bill, Medicaid would be required to count towards the cost of long-term care half of the income from an annuity that was purchased by a couple within the last five years. Any annuities that were purchased five years or before would be exempt.

Medicaid planning can be complex, and qualifying can be difficult in some instances. Having the assistance of an attorney can be helpful for people who are being forced to deal with long-term care issues.

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