Pennsylvania uses their own life expectancy tables, here.

ANNUITY RULES

According to the Pennsylvania Bulletin, Document Number 07-353, entitled Provisions of the Deficit Reduction Act of 2005 on Medicaid Eligibility for Long-Term Care Services:

1. The purchase of an annuity by an applicant or applicant’s spouse on or after February 8, 2006, that does not meet all of the following requirements, will be treated as a transfer of assets for less than FMV:

a. The annuity must be irrevocable and non-assignable.
b. The annuity must be actuarially sound.
c. The annuity must provide for payments in equal amounts, with no deferral and no balloon payments made.
d. The annuity must name the Department as the remainder beneficiary in the first position for at least the total amount of medical assistance paid by the Department on behalf of the recipient. The annuity must name the Department as beneficiary in the second position when there is a community spouse, minor child, or blind or permanently and totally disabled child for at least the total amount of Medical Assistance paid by the Department on behalf of the recipient and must name the Department in the first position if the CS or a representative of a minor child, or a representative of a permanently and totally disabled child disposes of any remainder for less than FMV.

A non-qualified annuity that meets the requirements above and provides the CS with a monthly income that, when combined with all other available income to the CS, is equal to or less than the Community Spouse Monthly Maintenance Needs Allowance, shall be treated as income. If the combined available income exceeds the Community Spouse Monthly Maintenance Needs Allowance, the annuity shall be treated as an available resource.

Note: A reputable attorney states the Department follows the Richman and Weatherbee cases and the above language from the manual regarding CS income in excess of the MMNA should be disregarded (10/4/12)

A qualified annuity owned by a community spouse is not considered an available resource.

ANNUITY DECISION

• Pennsylvania’s Community Spouse Court Decision (2009)
• Pennsylvania’s Community Spouse Court Decision (2013)
• Zahner v. Mackereth (2013)

View Pennsylvania’s Long Term Care Handbook to learn more.

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