Qualifying Extra Help

SportsNut

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Have a F-76, who is an old farm girl and hard headed. When turning 65 she declined Part B, and now 11 yrs later her LEP would be substantial if she were to pick up Part B, but of course she would like to do so. (Next Jan to March, with eff date of July 1, 2014.

She would qualify for extra help on an income basis (1K mo) but she is frugal and has been able to save appx 40K, so that makes her ineligible for the Extra Help. What planning moves can one take to shift the liquid assets to < $ 12, 600...? Would SPWL accomplish this? Or would it have to be in an irrevocable life ins trust...? I suppose pre-paying a funeral surely would help matters. Any other ideas...?

The object is to get her liquid assets below < $ 12K then she would qualify for extra help and be able to eliminate appx $ 100 mo in Part B LEP...
 
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Why not prepay a funeral and then place about 20K into an immediate annuity with it annuitized for some type of period certain. The amount of money it would generate monthly would be nominal and probably would not endanger her assitance and she could probably use the extra income. Once it is annuitized it is no longer her asset.
 
Have a F-76, who is an old farm girl and hard headed. When turning 65 she declined Part B, and now 11 yrs later her LEP would be substantial if she were to pick up Part B, but of course she would like to do so. (Next Jan to March, with eff date of July 1, 2014.

She would qualify for extra help on an income basis (1K mo) but she is frugal and has been able to save appx 40K, so that makes her ineligible for the Extra Help. What planning moves can one take to shift the liquid assets to < $ 12, 600...? Would SPWL accomplish this? Or would it have to be in an irrevocable life ins trust...? I suppose pre-paying a funeral surely would help matters. Any other ideas...?

The object is to get her liquid assets below < $ 12K then she would qualify for extra help and be able to eliminate appx $ 100 mo in Part B LEP...

If she's in Indiana she can set up preneed trusts ($10,000 max) on herself, children and children's spouses.

Sounds like 3 of them would get her there.

Other states don't allow that.
 
Have a F-76, who is an old farm girl and hard headed. When turning 65 she declined Part B, and now 11 yrs later her LEP would be substantial if she were to pick up Part B, but of course she would like to do so. (Next Jan to March, with eff date of July 1, 2014.

She would qualify for extra help on an income basis (1K mo) but she is frugal and has been able to save appx 40K, so that makes her ineligible for the Extra Help. What planning moves can one take to shift the liquid assets to < $ 12, 600...? Would SPWL accomplish this? Or would it have to be in an irrevocable life ins trust...? I suppose pre-paying a funeral surely would help matters. Any other ideas...?

The object is to get her liquid assets below < $ 12K then she would qualify for extra help and be able to eliminate appx $ 100 mo in Part B LEP...

I must be missing something. Why doesn't she just pay the penalty and keep her $40k? I don't see the problem. :skeptical:
 
I must be missing something. Why doesn't she just pay the penalty and keep her $40k? I don't see the problem. :skeptical:

Slippery slope indeed with the possible 5 year look back with Medicaid. They will check out all her income and assets. Be careful. Most states allow one vehicle and some even have a limit on how much that can be worth. She might want to invest in a '14 shiny new pick'em up.
 
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Slippery slope indeed with the possible 5 year look back with Medicaid. They will check out all her income and assets. Be careful. Most states allow one vehicle and some even have a limit on how much that can be worth. She might want to invest in a '14 shiny new pick'em up.

We're not talking about Medicaid here... and their 5 yr lookback period. This is specific to the i1020 app for Soc Sec Extra Help.

It seems that she could pre-pay her funeral, say 7500 bucks, leave 10-12K in savings and buy a 20K SPWL policy and based on the criteria she should qualify. As SAI says, maybe she should just pay the LEP of $ 120 mo and Part D LEP of $ 40 mo; appx $ 160 total penalty. According to her this will deplete her savings, which I suppose is correct because she is likely earning about $ 40 bucks per month in interest on it.

Anyway, just looking for a way for her to get beyond the LEP here... maybe it makes sense and maybe not. Also not entirely sure she would buy a 20K SPWL policy to avoid the penalty... I will know more about this next week... but just looking for a potential solution then let her decide what works for her... She is an unusual person to say the least and will likely forgo the Part B if she has to pay the penalty. Of course I will educate her of her savings being at-risk due to unpaid med bills with no health insurance... A lot doesn't make sense here... but she is an old Dutch farm girl and hasn't lived in the real world much.

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For applications effectively filed January 1, 2010, or later, and initial determinations effective on or after January 1, 2010, in-kind support and maintenance (ISM) does not count as income and for purposes of determining eligibility for Extra Help, the cash surrender value of life insurance does not count as resources. Source
 
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We're not talking about Medicaid here... and their 5 yr lookback period. This is specific to the i1020 app for Soc Sec Extra Help.

It seems that she could pre-pay her funeral, say 7500 bucks, leave 10-12K in savings and buy a 20K SPWL policy and based on the criteria she should qualify. As SAI says, maybe she should just pay the LEP of $ 120 mo and Part D LEP of $ 40 mo; appx $ 160 total penalty. According to her this will deplete her savings, which I suppose is correct because she is likely earning about $ 40 bucks per month in interest on it.

Anyway, just looking for a way for her to get beyond the LEP here... maybe it makes sense and maybe not. Also not entirely sure she would buy a 20K SPWL policy to avoid the penalty... I will know more about this next week... but just looking for a potential solution then let her decide what works for her... She is an unusual person to say the least and will likely forgo the Part B if she has to pay the penalty. Of course I will educate her of her savings being at-risk due to unpaid med bills with no health insurance... A lot doesn't make sense here... but she is an old Dutch farm girl and hasn't lived in the real world much.

_____________________________________________________________________________

For applications effectively filed January 1, 2010, or later, and initial determinations effective on or after January 1, 2010, in-kind support and maintenance (ISM) does not count as income and for purposes of determining eligibility for Extra Help, the cash surrender value of life insurance does not count as resources. Source

So you think she would be willing to deplete her savings now to save $160 a month? Maybe $260 if she gets the part B premium paid too. I feel like I'm missing something because this seems like a no brainer to me.
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Is she able to save money now with her current income? If she is she could put enough money into a spia to make up for her extra costs and continue saving. I'm not sure how accurate this calculator is but it's saying she could get $295 a month for her $40k. That's with a life only option.
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http://www.annuityquickquote.com/results.aspx?state=Indiana&age=76&gender=Female&spousegender=&spouseage=&receive=&invest=$40000
 
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So you think she would be willing to deplete her savings now to save $160 a month? Maybe $260 if she gets the part B premium paid too. I feel like I'm missing something because this seems like a no brainer to me.
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Is she able to save money now with her current income? If she is she could put enough money into a spia to make up for her extra costs and continue saving. I'm not sure how accurate this calculator is but it's saying she could get $295 a month for her $40k. That's with a life only option.
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http://www.annuityquickquote.com/results.aspx?state=Indiana&age=76&gender=Female&spousegender=&spouseage=&receive=&invest=$40000

You are calculating an annuity and an annuity will not work here. It will have to be a spwl policy and hence the cash surrender value does not count against her... although we know she could surrender the policy or in part surrener to withdraw funds if need be...

Her situation is she make 1K mo... does not feel that she can afford the Part B AND the LEP... which she may well be right... although she could subsidize her income from her savings but it is not her nature to do so. (old habits). I am not sure what a spwl would look likke in terms of growth for her compared to what she is doing right now; CD's... but if it did remove 20-25K from her balance sheet and she did qualify w/o the LEP her immediate return on the WL would be an annual savings of $ 2220*; or appx 9-11% cash on cash return... (not bad)... plus whatever the life ins return was.

* The savings of the Part B and Part D LEP, being $ 160 per month, plus the savings of the Part D premium = $ 185 appx, or $ 2220 annually. On a $ 20,000 deposit that is 11% return, on a $ 25,000 deposit that is 9% return. The savings and return could be greater if she qualified for Part B subsidy by St of IN.

Again, whether this makes any sense or not would depend upon what the surrender chg would be in the SPWL policy but if it is not be more say 3K... she would nearly save that in LEP first yr, and every yr thereafter.

Again, she would have paid her funeral pre-need at $ 7,500, still have 10-12K in savings cash on hand, and have the cash surrender value of the spwl policy too. Does this make sense... the more I look at it, the more sense it seems to make. She is very healthy, could pass u/w on a fully u/w UL product, and just have min face amount based on that single deposit of 20-25K... and the c/v would likely grow at least as much as her CD is growing now, wouldn't it...? I haven't yet the illustration for the product yet, hopeing to have some genious here suggest what is best...
 
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You are calculating an annuity and an annuity will not work here. It will have to be a spwl policy and hence the cash surrender value does not count against her... although we know she could surrender the policy or in part surrener to withdraw funds if need be...

Her situation is she make 1K mo... does not feel that she can afford the Part B AND the LEP... which she may well be right... although she could subsidize her income from her savings but it is not her nature to do so. (old habits). I am not sure what a spwl would look likke in terms of growth for her compared to what she is doing right now; CD's... but if it did remove 20-25K from her balance sheet and she did qualify w/o the LEP her immediate return on the WL would be an annual savings of $ 2220*; or appx 9-11% cash on cash return... (not bad)... plus whatever the life ins return was.

* The savings of the Part B and Part D LEP, being $ 160 per month, plus the savings of the Part D premium = $ 185 appx, or $ 2220 annually. On a $ 20,000 deposit that is 11% return, on a $ 25,000 deposit that is 9% return. The savings and return could be greater if she qualified for Part B subsidy by St of IN.

Again, whether this makes any sense or not would depend upon what the surrender chg would be in the SPWL policy but if it is not be more say 3K... she would nearly save that in LEP first yr, and every yr thereafter.

Again, she would have paid her funeral pre-need at $ 7,500, still have 10-12K in savings cash on hand, and have the cash surrender value of the spwl policy too. Does this make sense... the more I look at it, the more sense it seems to make. She is very healthy, could pass u/w on a fully u/w UL product, and just have min face amount based on that single deposit of 20-25K... and the c/v would likely grow at least as much as her CD is growing now, wouldn't it...? I haven't yet the illustration for the product yet, hopeing to have some genious here suggest what is best...

Is her goal to leave her savings behind for an inheritance or is she wanting to spend it before she checks out? If she is wanting to leave someone some money I can see your strategy. I she is worried about her lifestyle then it isn making much sense to me.

The annuity option I gave wasn't to try and help her qualify for a subsidy. It was to off set the penalty. She could put in 20-25 k to pay the penalty and still have the rest left over for emergencies and a small whole life policy-single pay or life pay. Life pay sounds better to me.

But as usual, it doesn't matter what I or you think is better.
 
I she is worried about her lifestyle then it isn making much sense to me.

What she wants to do is buy health ins... well she's already elibigle (sort of) for the best health ins on the planet... she just doesn't want to pay the penalty. So what she wants to do is buy a health ins plan... duh, at 76 not happenin. So my point is IF I can show her how to eliminate the penalty(s) and get her on M'care effective 7/1/14, w/o penalties, this is her best option.... So I am looking for a solution that she might take a liking to, side stepping the penalties and still getting M'care next yr.

Currently her savings is at-risk big time, one illness could wipe her out with NO Part B covg... so she needs to do some planning that will eliminate the risk as best she can, and work toward getting onto M'care; hopefully w/o the $ 185 mo penalty. None of the SPWL has been discussed with her, she thinks we are going to talk about some golden health ins plan for her... What is there for a 76 yo not on M'care; Hosp indemnity or Adv Plus (jazzed up)...? I get-em, don't I...
 
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