Find out if a Medicaid annuity is right for you

The preferred provider of the HarborMaster annuity series designed for compliance with Medicaid & VA benefit rules

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Protect Your Family's Savings

Medicaid has strict limits for the patient receiving care and despite these strict eligibility rules, Whitehall Bay can help make sure your family doesn't go broke paying for a Nursing Home.

Avoid Financial Disaster

Medicaid Applications are not easy to understand and are time consuming.  Any little mistake can be financially devastating, which delays funding. 

Get Funding Faster

Time is important and our team can save you several thousand dollars of savings by expediting your Medicaid Application to access your funds.

Medicaid Planning Guidance

Qualify hassle free by letting us navigate the complex world of Medicaid and Government Benefits.  

How Medicaid Safe Harbor Annuities Can Work For You

How can Medicaid's safe harbor help me?

If you or a loved one is facing the spenddown of assets towards the cost of long-term care expenses, it can be very helpful to take advantage of Medicaid’s safe harbor rules.  Assets that are earmarked for spending on care can be diverted to safe harbor assets as a way to reduce the overall exposure to the spenddown. Avoiding the spenddown can be done in a number of ways. For instance, money available to spend down can be used to purchase a pre-paid funeral or make other arrangements for burial. Because the pre-paid funeral is part of the safe harbor if set up properly, this can be a way to take assets that would have to be spent on care and preserve them in the form of a funeral contract. In some instances, the exclusion on vehicles or home ownership equity can also be used to take extra resources to buy a spouse a new car or pay off a mortgage.  Special safe harbor annuities can also be used to convert excess assets into income.

How can a safe harbor annuity help a community spouse?
The advantage of using a safe harbor annuity is that it takes an asset that is part of the spenddown and converts it into an income. This income can usually be directed towards the community spouse who, in most states, does not have to contribute any portion of his or her income towards the cost of care. Most people use the safe harbor annuity to take excess resources and convert them into an income for the community spouse. The purchase of the annuity is considered a valid spenddown of the assets to get the couple below the resource limit for assistance. This helps support the community spouse with assets that would otherwise have been quickly depleted.

The purchase of a safe harbor annuity is typically done only after someone enters a nursing home and the amount of excess resources and the resource allowance are both identified.  Because a majority of states use a formula to determine the resource allowance for a community spouse, the amount of resources to be used to purchase the annuity is often unclear until the snapshot date has been set by a hospitalization or a nursing home level placement event. The end result of using a safe harbor annuity is typically to avoid full economic catastrophe for the surviving spouse who may be around for years to come and may need those resources for living.

How can a safe harbor annuity help a single patient?
A safe harbor annuity can also be an effective way for a single patient to avoid being totally wiped out financially by the cost of care. In many instances, a single patient can give away a large sum of money, typically to a family member.  Because gifts and transfers create penalty periods when the person is otherwise eligible for Medicaid, they must still get below the resource limit to apply for Medicaid and start the penalty.  In this case, the patient wants to start the penalty and can calculate the penalty based on the size of the gift divided by the applicable penalty divisor for his or her state or region. The remaining spenddown is achieved by the purchase of a safe harbor annuity with a relatively shorter duration than full life expectancy.  In fact, the term is set to match nearly identically the length of the penalty period.  For instance, if a patient gives away $50,000 and the divisor is $5,000/month, the penalty period will be 10 months.  A corresponding annuity can be purchased for a 10-month term to help pay for nursing home expenses during the penalty period. This process is known as the Modern Half-a-Loaf and can be done in any state that does not have a limit on how short a safe harbor annuity term can be. Only Oregon, Washington, and North Dakota have such limits.

How can I decide if a safe harbor annuity is right for me?

Medicaid Planning is complicated. A safe harbor annuity is not always the best solution. We always advise that you work with a knowledgeable professional who can assist you with your planning. The services of an elder law attorney or Certified Medicaid Planner are invaluable to help decide your best course of action. Because annuities are an insurance product, the HarborMaster annuity can only be sold by a licensed insurance agent.  If you are not already working with an advisor skilled in long-term Medicaid planning, we can help get you connected with someone qualified to determine if a safe harbor annuity is right for you.


Let Our Attorney-Led Planning Team Help You Protect Your Assets With A Benefit-Compliant Annuity

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Common FAQs

About Medicaid

How do Medicaid asset limits work in my state?

The asset limit in most states is $2,000 (though some states have higher and lower limits). This means that a care recipient will not qualify to receive Medicaid if he or she has more than $2,000 in total assets. However, there are numerous exceptions to the Medicaid asset test that can protect significant amounts of your family’s assets. For example, in many states if you are married and receiving nursing home care through Medicaid, your spouse is allowed to keep $119,000 as a community spouse benefit. Additional asset exclusions exist, which means that the $2,000 limit can be very misleading. We can help you understand opportunities to access Medicaid nursing home benefits by utilizing the exceptions and exclusions to the Medicaid asset limit rules in your state.

Am I allowed to keep my house if my spouse goes on Medicaid?
Each state has different rules.  You can often keep your house if the house is a primary residence and you intend to return to it.  Additionally if your spouse is living in the house it is likely to be viewed as an excluded or non countable asset.  This is important to acknowledge and be aware of because Medicaid may seek repayment from the estate of the care recipient, so it is crucial to understand your family’s options for protecting that asset.

How long does it take to qualify for Medicaid?
The application process is very complex and time consuming. Securing an approval from Medicaid can sometimes take months, though benefits will be available retroactively to the month in which the application was submitted. Speed is crucial in accessing Medicaid funds. For example, an application submitted on March 31st will be eligible for one more month of benefits than an application filed on April 1st. Also, should Medicaid reject your application or ask for additional information, timely and appropriate responses to Medicaid are crucial. Having an advisor complete and support your Medicaid application on your behalf within the Medicaid system can save your family tens of thousands of dollars.

How does the Medicaid gifting rules and look-back period work?

Medicaid assesses a penalty for the total amount of transfers.  The penalty is assessed in terms of how long the person is ineligible for state assistance with the cost of their long-term care.  This period of ineligibility is based upon the amount of money given or transferred for less than fair-market-value in the last five years.  This waiting period is known as the Look Back Period.

Timing is very important.  Medicaid will look back five years prior to making an application for assistance.  If someone has given away assets in such a way that could cause a penalty period, it is possible to apply for Medicaid too early.  Typically, the look-back must be waited out on all transfers before making application. There are some strategies, however, where you might apply early and intentionally trigger a penalty period.  This is usually coupled with techniques like buying a short-term annuity or returning a portion of the gifted asset to pay for care so as to reduce the penalty period.​

For example, dad gives away $100,000 4.5 years ago.  The kids he gave it to have long since spent it.  He goes into a nursing home. Because he’s broke, the nursing home recommends filing for Medicaid. If an application is filed today, he would not be eligible for state assistance with his long-term care bills for at least 16 months (depending on which state he’s in, since the calculation is based on the average cost of care in a state). However, if he waits 6 months to apply, then not only will Medicaid start paying the bills but they a will also use his monthly cost-sharing amount to pay off the accrued balance at the nursing home. A dramatic difference!

How do I determine whether my loved one has a medical need for a nursing home?

Typically an evaluation is involved to assess the level of care required. This assessment may be performed by your doctor, a medical professional at the hospital, a social worker, or by the nursing home itself. Common characteristics that suggest a nursing home level of care include: need for daily medical attention, disability, blindness, Alzheimer’s or advance dementia, or assistance with multiple activities of daily living such as bathing, dressing, grooming, eating and ambulating.