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Posted: October 05, 2005

Professional Caregiving

How Reverse Mortgages Can Help Cover Long-Term Care

One of my jobs for a very long time included working closely with a financial advisor and an elder-law attorney. I learned a lot from both of them and their fields. The most important thing I learned is that long-term care isn’t just about picking a nursing home or a home care agency. Long-term care is also about the legal and financial matters that almost always come up when families are trying to help an aging loved one make choices.

Most families cannot afford to pay privately for nursing home care or in-home care for very long. This typically isn’t planned or budgeted prior to retirement. Planning ahead is getting more popular, but for our older generation, it wasn’t an option for various reasons.

Because of this, I try to make sure I know what all of the financial options are for seniors and their family members. One of them is something that not many of us understand very well -- reverse mortgages.

Reverse mortgages have received a lot of press lately. NBC Nightly News, ABC, CBS . . . they have all run stories. Of course, there are pros and cons to reverse mortgages, but interestingly enough, two large organizations support and advocate them, especially for seniors who need long-term care. The National Council on Aging and AARP both support the use of reverse mortgages in certain circumstances.

A study released by The National Council on the Aging (NCOA) shows that reverse mortgages can be used effectively by more than 13 million Americans to pay for long-term care expenses at home, allowing many to remain independent and in their homes longer.

The Report, "Use Your Home to Stay at Home: Expanding the Use of Reverse Mortgages to Pay for Long Term Care," funded by the Centers for Medicare and Medicaid Services and the Robert Wood Johnson Foundation, also shows how reverse mortgages can alleviate financial pressure not only for individuals and families, but also for state Medicaid programs and the federal government. Increasing the market for reverse mortgages could save Medicaid $3.3 billion (with a 4% take up rate) annually by 2010.

A reverse mortgage is also called a home equity conversion mortgage. These loans are backed by the federal government (HUD and FHA). Seniors age 62 and older are eligible to use this federal program. This is a "non-recourse loan," which means that heirs of the seniors are not responsible for repaying the loan. In fact, a reverse mortgage is a loan that does not have to be repaid unless both homeowners (assuming a couple) leave the home permanently, or both pass away. No monthly payments are required. The senior is the one who gets paid. Finally, the money seniors receive from a reverse mortgage is tax free, and does not interfere with Social Security or Medicare benefits.

As with any financial transaction, there are other things to consider, and reverse mortgages aren’t for everyone. However, for the senior or couple who are having trouble making ends meet, this can be a life saver. Some seniors are using the extra cash flow to pay for in-home care, adult day care, prescription drugs, to pay off credit card debt, and make necessary home repairs so they can live safely and more comfortably.

Find a reverse mortgage specialist in your area, and network with them. They might be able to help a senior you know pay privately for care much longer than expected. And that’s a situation good for all professional caregivers.

For more information, visit,, or


Valerie VanBooven RN, BSN, PGCM, is a registered nurse, professional geriatric care manager, author, and professional speaker. She is a leading expert on long-term care planning and crisis management. Valerie is president of Senior Care Solutions, a private geriatric care management practice in the St. Louis area. Her books include Aging Answers: Secrets to Successful Long-Term Care Planning, Caregiving, and Crisis Management and her website is She can be reached at .

© 2005 Pederson Publishing, Inc. All Rights Reserved.
Commercial use, redistribution or other forms of reuse of this information is strictly prohibited without the prior written permission of Pederson Publishing.

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