Medicaid Life Expectancy Tables Updated
[April 20, 2006]
Donald N. Freedman

Among other requirements, annuities, loans, care contracts and certain other financial arrangements entered into prior to filing an application for MassHealth must be "actuarially sound." This means that it must be statistically likely that the terms of the arrangements will not extend beyond the individual's life expectancy. For example, if an individual's statistical life expectancy, based on sex and age, is eight years at the time of the purchase of an annuity, and the terms of the annuity call for payments over 10 years, then the purchase of the annuity will, in part, be considered a transfer, resulting in a period of ineligibility for certain MassHealth services.

The Social Security Administration has recently updated its "Period Life Table," that is, the life expectancy table referenced under the Social Security Act and used for these purposes. The table reflects longer life expectancies.

As a practical matter, the update is helpful and will afford greater flexibility in MassHealth planning. because a longer life expectancy translates to greater potential to save additional money by using annuities, loans, care contracts and the like. For example, under the old tables if a 75-year-old male wanted to purchase an annuity with excess assets, the annuity must be paid back based on his life expectancy, or 9.24 years, for MassHealth purposes. Under the new table a 75 year-old male's life expectancy increased to 9.83 years.

The update was announced by the Social Security Administration on April 6, 2006, and can be accessed at http://www.ssa.gov/OACT/STATS/table4c6.html

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