[vimeo id=”29508282″ width=”601″ height=”338″]
One expert points out that home equity should be required to be utilized before certain individuals can qualify for Medicaid. Learn how the system discourages savings and what could be done.
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Editor in Chief: HECMWorld.com
As a prominent commentator and Editor in Chief at HECMWorld.com, Shannon Hicks has played a pivotal role in reshaping the conversation around reverse mortgages. His unique perspectives and deep understanding of the industry have not only educated countless readers but has also contributed to introducing practical strategies utilizing housing wealth with a reverse mortgage.
Shannon’s journey into the world of reverse mortgages began in 2002 as an originator and his prior work in the financial services industry. Shannon has been covering reverse mortgage news stories since 2008 when he launched the podcast HECMWorld Weekly. Later, in 2010 he began producing the weekly video series The Industry Leader Update and Friday’s Food for Thought.
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4 Comments
Having been a long time advocate of self reliance rather then relying on government or any other source for the necessities for life, I say yes. Let the senior use the rescources they have built up for themselves to take care of themselves. Most would tell you they don’t want to be a burden on their kids, this isn’t any different.
I agree, anything we can do to reduce the draw on government assistance would benefit the masses, whereas leaving untapped equity to heirs benefits few.
Yes, I agree with Tyler’s comment above and that the look-back period should be extended; however, I believe that medicaid benefit eligibility as impacted by reverse mortgage proceeds needs to be revisited in an effort to maximize the use of those reverse mortgage dollars without penalty.
The flaw in this argument is that the bulk of Medicaid spending is for long-term care — that is, nursing home costs. I don’t need to remind you that individuals who have permanently moved from their home into long term care cannot qualify for a reverse mortgages, since the home is no longer their principal residence. To qualify for nursing home Medicaid, the individual has to have low assets (varies by state) and income that is less than the cost of their care. If you get Medicaid, virtually all of your income, except for a very small personal needs allowance, has to go to the nursing home. So yes, people who get Medicaid are effectively VERY low income. It’s true that they don’t count the value of your home as long as you say you might return, but that seems appropriate to me. The government DOES try to recover the cost of your care from the state after your death, though, so the heirs don’t just walk away with the full value of the home.