J.G. Wentworth Gives States Ammo with Secondary Market for Annuities
For years seniors seeking to qualify for Medicaid benefits have been steered into so-called “Medicaid friendly” annuities – many times unknowingly – to hide assets from Medicaid authorities. But many states are now clamping down on this scheme – and the financial planners who drive it – requiring annuities to be evaluated for purchase in the secondary market, and saving the states millions in taxpayer dollars in the process.
J.G. Wentworth is working directly with many states to help combat this growing issue.
“Clearly, states don’t want to deny Medicaid benefits to bona fide applicants,” said John Zepeda, who works with elder law attorneys, financial planners and state and county administrators. “But at the same time, many individuals place assets in these Medicaid annuities to ensure Medicaid eligibility, even though these assets in most cases can be sold on the secondary market, thus providing additional resources to provide for long-term care.”
J.G. Wentworth reviews many of these cases each week, providing a quick and accurate assessment of an annuity’s value and a determination of saleability. The net result, says Zepeda, is that an individual pays for care commensurate with their resources before the state steps in, potentially saving taxpayers thousands of dollars on each Medicaid applicant.
Indeed, an article in Investment News in December highlighted the pitfalls of hiding assets in annuities in order to qualify for Medicaid: Said David Guttchen, director of the Connecticut Partnership for Long-Term Care, “In Connecticut, we’ve always treated annuities on a case-by-case basis, never allowing vehicles like Medicaid-friendly annuities. We have always told the financial planning community that if they wanted to use annuities to shelter assets, it’s a risky venture. There’s no guarantee they can provide that this won’t be seen as an improper transfer.”
For further information, please contact John Zepeda at 484-434-2224 or johnz@jgwentworth.com