Annuity Income Stream is Not an Asset for Medicaid Eligibility Purposes

After John moved into a nursing home, his wife Amelia bought an annuity. Soon after, John applied for Medicaid. The state directed Amelia to sell the income stream from the annuity to a potential buyer that the state found. Amelia refused, and the state denied Medicaid benefits to John. John appealed.

The U.S. District Court for the District of Connecticut held that since the annuity company did not allow Amelia to assign the annuity income stream, it could not be counted as an asset. The court further found that if the annuity company did allow assignment of the income stream, “it would be incongruent with the principles of [Medicaid law] to permit a state to characterize even an assignable income stream as an asset.”

Income Stream from Annuity is Not Asset for Medicaid Eligibility Purposes, ElderLawAnswers, Sept. 7, 2010 (quoting Lopes v. Starkowski (U.S. Dist. Ct., Dist. Conn., No. 3:10-CV-307, August 11, 2010)).