Report: Reverse mortgages may not be the answer for long-term care

Share this article:

Linking reverse mortgages with long-term care insurance may not be the answer to solve financial crises, a new report released by Health Strategies, Inc. says.

The Pew Charitable Trusts funded the Retirement Security Project in response to a policy passed in 2000 by the Department of Housing and Urban Development. The policy says homeowners will have incentives to use reverse mortgages to finance long-term care insurance. The report is part of a series to educate consumers and policymakers the policy's weaknesses.

 

"Our analysis indicates that this policy will not be effective in moving substantial numbers of people to purchase LTC insurance, and we are concerned that this linkage may not be appropriate for many people," the report says.

 

Under the policy, in order for consumers to get the insurance premium waived, reverse mortgage loan proceeds can only be used to purchase long-term care insurance. Homeowners may not use home equity to pay long-term care costs that exceed those covered by their insurance policies. The report points out that counseling for the policy is not yet available. It also contends that long-term care insurance policies need to have protections, such as against medical inflation.

 

Regulations for the policy are expected to come out in the next few weeks.

Share this article:

More in News

Antipsychotics reduction goal is 25% by end of 2015, CMS and provider groups announce

Antipsychotics reduction goal is 25% by end of ...

Long-term care providers are being asked to reduce the use of antipsychotic medications among residents by 25% by the end of 2015, and 30% by the end of 2016. Providers ...

CDC issues new guidelines on pneumococcal vaccine, says LTC flu vaccination rates remain low

CDC issues new guidelines on pneumococcal vaccine, says ...

Long-term care workers continued to have low rates of flu vaccination last season, despite there being 92% vaccination coverage overall among physicians and nurses, the Centers for Disease Control and ...

AL operators accused of withholding $2M in unpaid overtime, minimum wages ...

Four California assisted living operators are facing eight felony charges related to wage theft, tax and insurance violations, according to local reports.