Did the Deficit Reduction Act of 2005 totally eliminate the use of Medicaid Compliant Annuities?
No. The Deficit Reduction Act of 2005, which went into effect on February 8, 2006, encouraged the use of annuities if they were deemed "Medicaid Compliant." In order for an annuity to be deemed Medicaid Compliant, it must be irrevocable, non-assignable, actuarially sound, and contain equal payments. Finally, it must have proper beneficiary designations.
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Does every insurance company offer a Medicaid Compliant Annuity?
No. Of the hundreds of insurance companies that offer annuities, only a handful - less than 10, offer a Medicaid Compliant Annuity.
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Does every insurance agent offer a Medicaid Compliant Annuity?
No. Of the thousands of insurance agents located throughout the United States, less then 1% understand the requirements for a Medicaid Compliant Annuity. Krause Financial Services, a national leader in the sale of Medicaid Compliant Annuities, assists elder law attorneys, and their clients, on how to properly use a Medicaid Compliant Annuity.
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Does Krause Financial Services charge a fee to develop a Medicaid Compliant Annuity Plan?
No. Krause Financial Services does not charge a fee to develop a Medicaid Compliant Annuity Plan; this is a complimentary service offered only to elder law attorneys - not insurance agents or financial advisors. We look forward to the opportunity to work with elder law attorneys, and their clients, throughout the United States.
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What makes a Medicaid Compliant Annuity so special?
The reason that Medicaid Compliant Annuities work so well is that they are simple and easy to use. The purpose behind a Medicaid Compliant Annuity is to convert a countable resource - assets at risk - into an income stream. With the assets eliminated, the individual then qualifies for Medicaid benefits.
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Doesn't the monthly income from the Medicaid Compliant Annuity have to be contributed to the monthly cost of the nursing home?
Yes. In the case of an individual - with no community spouse, all of the income attributed to the individual, with the exception of a monthly personal needs allowance and the monthly cost of his or her Medicare supplemental insurance plan, will be contributed to the monthly cost of the nursing home. In the alternative, in the case of a community spouse, all of the monthly income attributed to the community spouse, including that from the Medicaid Compliant Annuity, will be retained by the community spouse.
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I am an insurance agent. Is there any way I can work with Krause Financial Services and receive compensation?
Krause Financial Services will work with insurance agents; however, complimentary Medicaid Compliant Annuity Planning is not available to insurance agents – only elder law attorneys. If an insurance agent wishes to receive a Medicaid Compliant Annuity Plan a $500.00 processing fee is due to Krause Financial Services prior to the development of a Medicaid Compliant Annuity Plan. However, if an insurance agent is familiar with the requirements of Medicaid Compliant Annuity planning, Krause Financial Services is happy to provide them with complimentary annuity illustrations if they are appointed under Mr. Krause’s hierarchy at the respective insurance company.
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In a community spouse scenario, which spouse’s ownership should the annuity be placed in? Who should receive the monthly annuity payments?
In the majority of community spouse cases the Medicaid Compliant Annuity is placed in ownership of the community spouse. Generally, the payments are always directed to the community spouse as well. Depending on the factors of the case, it can sometimes be beneficial to place the Medicaid Compliant Annuity in ownership of the institutionalized individual and then utilize the “name on the check” rule, if the state regulations permit.
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What is the timeline for obtaining a Medicaid Compliant Annuity contract?
Once Krause Financial Services receives an application and funds for a Medicaid Compliant Annuity the documents are immediately processed and sent via overnight mail to the respective insurance company. Depending on the insurance company, an original contract will be returned to Krause Financial Services within five business days to three business weeks.
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Is there a fee due to the insurance company for a Medicaid Compliant Annuity?
The only time an insurance company charges a fee to issue a Medicaid Compliant Annuity is if the period certain of the annuity is less than 12 months in length. In such a case, the one-time fee that is due to the insurance company is worked into any processing fee that Krause Financial Services charges. If the Medicaid Compliant Annuity is 12 months in length or longer the insurance company does not charge any type of fee.
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How does Krause Financial Services receive compensation if the planning is complimentary?
Krause Financial Services receives compensation by way of a commission from the insurance company. With the Deficit Reduction Act of 2005 driving the period certains of Medicaid Compliant Annuities shorter and shorter, it has become necessary in some cases for Krause Financial Services to charge a processing fee if a plan involves a short-term Medicaid Compliant Annuity in that the short-term Medicaid Compliant Annuity provides zero to little commission. For more information please feel free to contact a representative of Krause Financial Services.
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What are the minimum and maximum requirements of a Medicaid Compliant Annuity?
The minimum and maximum requirements of a Medicaid Compliant Annuity heavily depend on the state that the Medicaid Compliant Annuity is issued within. Generally speaking, the minimum required investment amount is $5,000, and there is no cap on the maximum investment amount. The maximum age a Medicaid Compliant Annuity can be issued is to age 100. The minimum period certain available is two months, with no cap on the maximum period certain. Again, these are generalities, and the aforementioned requirements vary from state to state. For more information please feel free to contact a representative of Krause Financial Services.
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