Person needs a SNF; they own a property but have no other cash/capital resources and need funds to pay the SNF once Medicare runs out and/or funds to assist in paying the medicare deductible after day 20 of 157.50/day.
How would a reverse mortgage affect the spend down and are there options other than a reverse mortgage that would take advantage of the equity without disqualifying Medicaid and spend down?
So is the stay in the SNF permanent after day 20 OR is this more about coming up with $ just for continued rehab from day 21 for a few days (or weeks) till rehab is over & then the situation is they move back home but need additional funds to pay for their regular living costs plus in-home caregivers and all costs on the property required by the RM that is totally affordable from the RM and their income. The answer will be a big factor as to whether an RM is feasible from the start imho. If this is possibly the plan, please have a clear talk with their PT, OT and nursing staff as to their ability to truly return home to live and what degree of caregivers are needed. Often in-home caregivers can cost as much if not more than a NH.
Funds from the RM is usually considered income and can keep them from even qualifying from medicaid if the monthly RM income added to their SS & retirement takes them over the maximum monthly income allowed. You need to check with your state's Medicaid program to see how this is handled.
Personally I think an RM is too often a band-aid on a much bigger financial problem. RM is debt and debt that has to be repaid and requires the owner to continue all costs on the property and live at the property and then upon their death the RM has to be repaid in full plus interest in fees if family ever wants to inherit the property. If they have no savings to pay towards the $ 157.50 a day co-pay, how are they able to pay for repairs, taxes, insurance, etc on the house?
Why not sell the house and use the proceeds from the sale for the spend-down to get them to the point of qualifying for Medicaid?
If there a reason to keep the house, they can do so as most Medicaid programs allow for them to continue to own their homesteaded property. But if so, is there family who can pay all costs on the property from now till the elder passes away and then through the probate & MERP process? The elder will have no income to cover any of the costs on the home as Medicaid requires a co-pay (their SOC = share of cost) of all their income less a small personal needs allowance (ranges from $ 35 - 105 a month). So family will need to cover all house costs once they are on Medicaid.
Most families sell the home & use the $ to private pay and then when those funds run down to 2K, then they apply for NH Medicaid.