Reverse Mortgages And Long Term Care Solutions

6/26/2007

posted by N. Sioris

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Money received from a Reverse Mortgage can be used for any purpose the homeowner chooses. One of the more popular choices for some seniors, is to fund long term care insurance. Tapping home equity gives retirees the purchasing power they need to buy comprehensive long term care insurance that can provide services for in home care as they age.

Many Americans are under the mistaken impression that Medicare covers in-home care and nursing home care on a long term basis. This however, is not the case. Medicare is designed to pay for hospitalization and other needed care on a short term basis. It does not pay for nursing home or in-home care, unless it is a part of a plan of rehabilitative or skilled care.

Medicaid, the federal/state program for low income individuals, does provide some assistance with long term care, but for people that have assets they must first "spend down" their assets before they can receive assistance on a long term basis.

With the advent of 78 million baby boomers on the verge of retirement age, many are predicting a disaster looming ahead for these entitlement programs. As it is right now Medicare's "trust fund" is filled with nothing but IOU's and Medicaid is "pay as you go" out of general tax revenues. Neither program is setting aside anything for the future. And no one can predict whether they will be solvent in years to come.

Consequently, older Americans need to be proactive in addressing their own long term care needs, and not rely on government entitlement programs. Reverse Mortgages can help with the expense of funding a long term care insurance policy and give seniors the peace of mind to know that when they need assistance, it will be there for them. And, it will be quality assistance of their own choosing. AARP, NRMLA (National Reverse Mortgage Loan Association) and NCOA,(National Council on Aging) have all published excellent consumer reports on the use of Reverse Mortgages to fund health care. All of these reports are available here.