“Can you use home equity to pay for long-term care?,” by Linda Bell, Bankrate
“Medicaid does cover long-term care for individuals – provided they meet strict income and asset requirements. According to the NRMLA, while more than half of older Americans say Medicaid will be a source of support, only a small percentage will actually be eligible. In 2025, single seniors who need to receive nursing home Medicaid can’t have an income in excess of around $2,901 a month (the actual amount varies depending on the state). For married couples applying, it’s $5,802. What about the seniors who have or make “too much” money? They will be forced to spend down their income and assets in order to qualify. But if you think you can just gift large sums of money to other people or charities, or offload some or all of your assets (like your home), think again. In most states, Medicaid has a five-year look-back period for long-term care, in which it reviews all your financial transactions. Any large gifts or asset transfers within that time frame will swiftly put you on the denial list. “It’s not that Medicaid is a terrible program,” says Marc Cohen, co-director of the LeadingAge LTSS Center at UMass Boston, which researches the challenges of the older population. “In fact, it’s a pretty darn good program in many states.” But the fact remains that, in order to receive Medicaid, seniors are put in the position of slowly having to bankrupt themselves, leaving their heirs with nothing when they pass away.”
LTC Comment, Stephen A. Moses, President, Center for Long-Term Care Reform:
“Can you use home equity to pay for long-term care?” Of course, but nobody does because Medicaid exempts the home and pays for most LTC. Even well-to-do people qualify for Medicaid LTC benefits easily without spending down assets. It’s easy to remove countable assets by using them to purchase exempt assets. Most large assets seniors own are exempt, such as home equity, tax-favored retirement savings, a business, a vehicle and many others. Income is rarely a problem because Medicaid deducts private medical expenses, including the cost of nursing home care, from income before applying a low-income test. So high income people with high private health expenses easily qualify. For the truth about Medicaid and LTC, read the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution” and watch this “virtual LTC event” featuring age wave visionary Ken Dychtwald and leading LTC researchers. To find ample private funds for LTC, check out Medicaid’s $100+ Billion Leak.