Newly Proposed House Bill H.R. 181 Impacts Medicaid Compliant Annuities

Krause Financial

Disclaimer: With Medicaid, VA, and insurance regulations frequently changing, past blog posts may not be presently accurate or relevant. Please contact our office for information on current planning strategies, tips, and how-to's.

On January 3, 2017, Oklahoma Congressman Markwayne Mullin (Republican) – the same congressman who introduced a similar bill H.R. 1771 in 2015, introduced Bill H.R. 181 in an effort to change the way payments from Medicaid Compliant Immediate Annuities (“MCIA”) would be assessed for Medicaid eligibility purposes.

Under the present law, payments from an MCIA made solely in the name of the community spouse (i.e. the healthy spouse residing in the community) are treated as 100% their income. Under the proposed bill, those same MCIA payments made solely in the name of the community spouse, would be assessed as 50% of each payment belonging to the institutionalized spouse (i.e. the spouse receiving custodial nursing home care).

Based on an analysis of proposed regulation, it is my opinion that if the bill passed, it would not change the economic result for most clients. However, it would encourage the use of DRA Compliant Promissory Notes which have an almost identical structure to MCIAs. The passage of the bill would not provide any real economic relief to the Medicaid Program and would just result in additional unneeded regulation.


Medicaid Compliant Annuities Update:

During the new healthcare proposals aimed to replace the Affordable Care Act, H.R. 181 did not find it’s way into the initial draft.


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