How does a reverse mortgage affect NH care if the person has only SS and VA financial assistance for income? - AgingCare.com

How does a reverse mortgage affect NH care if the person has only SS and VA financial assistance for income?

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Can the remaining spouse stay in their home and what income would she have to live on?

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Monthly payments from a reverse mortgage do not count as "income" for Medicaid purposes, but any payments not consumed or converted to a non-countable form by the end of the month of receipt are then counted as an asset in the following month. In most cases, a reverse mortgage is not advisable for a single person who may move to a nursing home soon, because it will have to be repaid within 12 months of vacating the house. However, if there is a spouse at home, then sometimes a reverse mortgage can be helpful to that spouse to pay the bills, go on vacation, etc. I have a section on reverse mortgages in my book, "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets" (www.MedicaidSecrets.com), in which I also discuss a new technique called a reverse private mortgage.
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Whoa! If Medicaid is paying for the nursing home, they will suck up every penny of the reverse mortgage. Don't do it!! The remaining spouse gets to stay in the house, gets to keep their SS check, but any attempt to sell or mortgage triggers a penalty.
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First are you asking about a long term care in a nursing home? This is important because Medicare will pay for a stay in a nursing home for 20 days if preceded by a 3 day stay in a hospital.That stay can be increased by no more than another 80 days but requires the patient to pay a copay. As regards a long term stay in a nursing home, it seems qualifying for Medicaid is advisable. Under Medicaid regulations the primary residence is protected for the spouse living in the community. If that spouse no longer lives in the community, the home is no longer protected. Medicaid allows the community spouse to retain a certain amount in resources and income. This can vary from state to state. As regards the reverse mortgage proceeds, protecting them for the community spouse may very well be possible. As there are many variables to consider and the Regulations are daunting, I suggest consulting with an elder law attorney to learn more about NH Medicaid Regulations and what you are allowed to do under those regulations to protect assets in the event of long term care in nursing home. If you need a referral, feel free to contact me.
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