Mortgage News June 9, 2023
According to a recent article by financial columnist Bob Carlson in Forbes, many individuals in the reverse mortgage demographic are worried about ensuring their financial resources endure. However, if someone is unable or unwilling to utilize the equity in their home, these concerns can prompt the exploration of alternative strategies. Medicaid is one such option, but as stated by Carlson, it may not be a feasible choice for a significant number of individuals.
In contrast to Medicare, which provides coverage for the majority of medical expenses for individuals aged 65 and above, Medicaid does not include coverage for long-term care. Nevertheless, Medicaid, a program designed to assist low-income or low-net-worth individuals with medical costs, does cover nursing home care and certain limited forms of home care. However, eligibility for the program is contingent upon meeting strict income requirements.
According to Carlson, Medicaid does not provide reimbursement for assisted living expenses. Since a majority of individuals seeking long-term care coverage reside in assisted living facilities, relying solely on Medicaid for an LTC (long-term care) plan would be inadequate for the majority of people.
According to Carlson, Medicaid offers certain advantages. In his writing, he explains that a recent article highlighted how federal law provides protection against eviction due to nonpayment of rent and other expenses for Medicaid beneficiaries living in nursing homes. However, this protection does not extend to non-Medicaid recipients or Medicaid beneficiaries receiving different forms of long-term care, such as those residing in assisted living residences.
Carlson added that there are alternative options for financing long-term care. He explains that one possibility is self-funding, which involves utilizing a combination of income sources such as Social Security and pensions, tapping into home equity through a sale or reverse mortgage, and managing an investment portfolio. Another option he suggests is obtaining a long-term care insurance policy to cover some or all of the anticipated long-term care expenses. He mentions that individuals can opt for a traditional long-term care insurance policy that provides coverage for various types of long-term care but does not offer any benefits if long-term care is not needed.
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