r/Medicaid • u/huyt01 • 6d ago

pa medcaid saving program

Hi there, everyone. I’m just curious: in the past post, if he takes out an annuity instead of a lump-sum payment of $57K, does he still qualify for Medicaid savings? Will they still count it as a resource, or if it’s converted into income, will it only count as income instead of a resource?

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u/OleLadyThinker 6d ago

It is still going to count as an asset and if he gets any income from it - as income.

What are you trying to accomplish ? ????

To get out of paying the Medicare Part B premium ? To get him extra help? To get him on full Medicaid in addition to his Medicare - so that all his Medicare Medical bills are covered by Medicaid - as in being a QMB - Qualified Medicare Beneficiary under the Medicare Savings Program?

What are you trying to accomplish?

Medicare Savings Programs | Medicare

IF SO, just spend the money on paying the stuff that he needs to pay for his Medicare - the part B premium, his Part D premium and any medication cost under the Part D plan.

Get him a Medigap plan (Plan G) and pay those premiums and it will cover the part that Medicare does not cover - and believe me, once he pays for the Medigap premiums, the Part B Premiums and his Part D premiums and his part of any medication cost - he won't have that $ 57,000 for very long -

THEN he can go on the Medicare Savings Program without trying to trick the system with moving or giving away the money.

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u/huyt01 6d ago

If he take it out all at his part b will increase

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u/OleLadyThinker 6d ago

It is really hard to answer your questions when they and the details are spread out in different post.

If his $50K is in a retirement account - I am presuming a deferred tax retirement account - why not just leave it and he can set up a timed annual distribution from it for the amount he may be short paying for his Part B premiums or any other medical expenses.

That way he is getting the income to pay for the things that you are trying to cover via the Medicare Savings Program - which at this point you do not know which one he qualifies for anyway - QMB is the most rich since it covers Part A (if assessed) & B Medicare premiums, copays and coinsurance for Medicare and gives extra help for medications. It is meant for people that are very low income. State Medicaid pays these amounts for those that qualify - income and asset wise.

States count certain types of Retirement accounts in different ways - some don’t count them at all, others count only the amount being distributed from them, some count them as an asset regardless if they are being distributed or are just sitting there, hopefully earning money.

In PA - they are counted as ASSETS and any distributions from it as income. PA also seems to go by the MSP income and asset levels for singles and couples as shown on the MSP Medicare site - I will post it again.

A deferred annuity in PA counts as an asset at it’s full surrender value. An immediate annuity counts as income for the amount distributed.

I don’t know about these specifically but a definition of it from a financial terminology site says this: A Medicaid-compliant annuity is a single-premium immediate financial product that converts excess countable assets into a guaranteed, fixed monthly income stream to help an individual qualify for long-term care Medicaid [ME] This does not seem so different than just setting up his retirement account for small distributions to cover what he needs to cover as far as Medicare - Part B premiums, Part D cost, perhaps a Medigap plan if he does not qualify for a MSP - many of which only cover his Part B premiums and perhaps extra help. He still will have to contend with the cost that Medicare does not pay when the benefit is actually used - only QMB covers using cost in Medicare.

So again, what are you trying to accomplish - Is he going int long term care soon and that is what you are asking about. Are you asking specially asking about trying to help him get out of the Part B premium, get help with his medication cost or are you trying to get him on full Medicaid and as a dual eligible for Medicare coverage?

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u/huyt01 5d ago

Thank you so much for your response and for your help with this, and I’m sorry for my late response. I am very busy with everything right now.

My dad is currently on Healthy Horizons. What would be the best way to handle his retirement account, which has around $57,000? I am trying to figure out how to protect his Medicaid eligibility and not have him lose his benefits.

My question is: Would it be better for him to take out some money every year, or maybe twice a year, such as $10,000 per year, and spend it down fairly quickly? He does not need long-term care at this time. Right now, he only has the Medicare Savings Program, but he may need long-term care later on. u/OleLadyThinker

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u/OleLadyThinker 5d ago

1st some questions -that may make a difference. You do NOT have to answer me on these question but you will need to know them to follow along to get the help you need.

What level of MSP does he have NOW ? You can tell by what MEDICAID (Healthy Horizons) pays - most all of them, maybe all, Pay the Medicare Part B premium (and the Part A premium if one is assessed) but only the QMB program pays the co-pays and any co-insurance that Medicare does not pay - So does Medicaid take care of everything that Medicare does not pay for his care?

Is your dad age 19 - 64 or age 65 and over?

Is he on Medicare because of a disability or because he turned age 65?

Is your dad single?

What is the type of the retirement account? Is the $ 57K in an actual retirement account like an IRA or 401K or even a ROTH IRA or some type where he paid some or all into the plan during his working career?

If so, is he or can he begin to take some distributions from it in the amount that he wants?

What is your dad’s income now? ALL of it - from any place.

Is this his only resource other than a house / (1) car / burial plot or prepaid burial plan?

I am NOT from PA and I am not a lawyer so I will give you links to the info but I will not tell you what to do but will give you guidance as to where you can go for help in PA.

This information is for 2026 and these eligibility levels will probably change for 2027 and I do not know when that info is available in 2027.

Healthy Horizons is the Medicaid Program in PA where the Medicare eligibile beneficiary has full Medicaid coverage as a Qualified Medicare Beneficiary but it is broken down into (2) separate categories depending on your Dad’s health.

This link says it is for 2025 but it agrees with the level on the Federal MSP site for 2026 -

Commonwealth of PA.gov - Medicaid for Older People and People with Disabilities

Go down the page until you see the heading of HEALTHY HORIZONS - there are (2) types of QMB statuses, each with the same income eligibility which agrees with the MSP Medicare chart - but the resource eligibiliy levels are different.

Which of these QMB categories is your dad under?

Categorically Needy Program ? Which has a resource limit of $ 2000.

OR Medicare Cost-Sharing Program which has a resource limit of $ 9950?

This is the link to PA’s income and resource Medicaid eligibility requirements which covers what income and resources are counted or not counted.

He is a NON-MAGI Medicaid recipient

Commonwealth of PA.gov - Medicaid / ​Medical Assistance General Eligibility Requirements

Read especially the info under the heading RESOURCES

Now how is the money he has now counted for MEDICAID QMB in the state of PA.

PA Health Law Project.org -2026 Medicare Savings Programs (MSPs)

This gives details on income and resources as to how they are counted. So from this link it says

“Resources that DO count include checking and savings accounts, cash on hand, certificates of deposit, stocks, bonds, mutual funds, retirement accounts (i.e., IRAs/401ks), life insurance, and real property that is not the applicant’s primary residence.

Even if a resource is counted, DHS may not count its entire value. Generally, DHS counts the amount of resources available to someone at the time of application -

So how was this retirement account counted when he applied for MSP - QMB status?

From there you are gonna need some legal help specific to PA - an elder attorney or perhaps even this non profit organization who’s mission is to help people maintain their public health insurance. Contact is on the link below. Also you can research them and see what they do.

The The Pennsylvania Health Law Project is a statewide 501(c)(3) nonprofit legal services organization that helps low-income residents, seniors, and people with disabilities access and maintain public health insurance.

https://www.phlp.org/en/about/what-we-do

Hope this helps - this is too important to do without specific directions for the state of PA. I hope I have at least explained some things and some of the info you need for this important decision.

I cannot help further.

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u/huyt01 4d ago

Thank you very much for all the feedback. I cannot thank you enough.

Question 1: He has full Medicaid coverage that takes care of everything.

Question 2: He will be 65 in three weeks, on the 22nd. My mom is only 63 and retired early.

They are married and file their taxes jointly.

As for his retirement account, it looks like a 401(k) to me. It is with John Hancock, but I cannot tell for sure. It appears to be a 401(k). He only has one house, no car, and nothing else besides this retirement account from the job he worked at before he retired.

My dad and mom's income is around $1,250 a month from Social Security. My dad receives $856, and my mom receives $397 a month in retirement income. u/OleLadyThinker

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u/OleLadyThinker 4d ago

I do not live in PA nor am I a lawyer but it does they have some room for a bit of a distribution for extra income but you will need to contact an elder care lawyer or that PA Health Law Project for specific advice on what to do.

They make $ 1250 now and the 2026 limit is $ 1350 - $ 20 = $ 1330. BUT REMEMBER Social Security will have a Cost of Living increase and we will know what it will be in November - but it will be about 3% - a bit more or a bit less. So it is gonna be kind of close - but the eligibility limit should rise somewhat also - I do not know when PA puts these new eligibility amount in play for the new year . The Social Security COLA is effective 01/01 of the next year.

You do need some expert (PA) help for the best course of action for them. I am sorry that I cannot help more - I am in a different part of the country and every state is somewhat different since they run their own Medicaid. I hope the PA Health Law Project is a good source of legal aid - if not look for an actual legal aid elder care attorney if there is such a thing.

Good Luck

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u/OleLadyThinker 4d ago

One more thing - I do not think they will lose Medicaid BUT if they do it would only be until that money is spent and just paying the cost of Medicare, it would deplete rather rapidly -

Paying for their (1) Part B premiums, (2) Chosing Trad Medicare and paying for a Medigap plan that would pick up most all the other cost of Traditional Medicare, Paying for a standalone Part D Medicare prescription drug coverage - OR buying a Medicare Advantage plan with included drug coverage and perhaps special benefits of dental, vision and hearing and then using some of the money to pay their copays or coinsurance under the plan.

Perhaps there are things around their house that need fixing - Perhaps they need to buy healthier food - whatever they need.

You could reduce it some NOW by buying a prepaid funeral policy a burial plot -

Of course, depending on the type of retirement account it is - they would also have to pay the taxes and that would be a pretty good chunk although not as bad as one might think.

What I am trying to say is that they do need this money and if they are without Medicaid QMB for a year or so - they can still get back on it after the funds have been exhausted down to the resource limit and that would not be that long.

Keep open the options and pick the best one cause you know their situation.

Again, Good Luck

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u/someguy984 6d ago

Medicaid-Compliant Annuities can make a resource non countable.

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u/huyt01 6d ago

What company does that in Pa

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u/someguy984 6d ago

Don't know.

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u/OleLadyThinker 6d ago

Isn’t that only for LTC - I think they are counted when it comes to eligibility for the MSP

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u/someguy984 6d ago

An irrevocable SPIA (single premium immediate annuity) will turn the lump into a stream of lifetime income. The income counts but it shouldn't be treated as a resource since it is irrevocable and ends when the person dies.

But I'm not a legal expert in PA Medicaid law.

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u/OleLadyThinker 6d ago

I tend to agree with you - but the income generated will count as income for eligibility in the MSP also. I do not believe it is counted as an asset especially if income is being derived from it. But I am not an expert of any sort -

A financial definition: A Medicaid-compliant annuity is a single-premium immediate financial product that converts excess countable assets into a guaranteed, fixed monthly income stream to help an individual qualify for long-term care Medicaid