What Are Medicaid Qualified Annuities? 
Medicaid qualified annuities , or `` Medicaid friendly annuities '' , are annuities that can sometimes be used by couples when one person in the couple enters a nursing home . One spouse is able to keep half their assets and the home he/she lives in , the other spouse must spend down the other half on nursing home care before becoming eligible for Medicaid . Rather than spend down those funds , the spouse entering the nursing home transfers the money to the other spouse , who puts it in an irrevocable , immediate annuity that is set to pay the at-home spouse an income up to the number of years left in his/her life expectancy . Consult a knowledgeable elder law attorney in your state to see if this is allowed in your state , and to know all the pro 's and con 's before endeavoring to take out a Medicaid qualified annuity . 