Hello, A Medicaid Annuity comes about for people who are expected be a nursing home for long period of time. A Medicaid Annuity takes your assets and transfers them third part insurance company and gives you a lifetime monthy payment. This asset does not count against liquid assets limit of $2,000 and then Medicaid will step in a pay the difference between your monthy payment and the cost of care. If you later don't need nurrsing home care you will receive the monthy payments but will never be able access the principle investment for any reason. Regular medicaid makes you spend down all of your assets until you have less than $2,000 before Medicaid helps you with your medical cost, in most states a home can be exempted from the asets. Advantages are if you end up spending a shorter time in the nursing home than expected you will receive benefit of your assets for the remainder of your life instead up spending all of your assets out at the beginning of your illiness leaving no assets when you get of the nursing home. Thanks Tom Please click accept.