Thursday, October 10, 2013
I have been seeing and hearing a fair number of inquiries about the effect of reverse mortgages on an individual's eligibility for Medicaid, with suggestions the answers differ both by type of reverse mortgage contract and by state. That sparked my curiosity about whether there is emerging scholarship about reverse mortgages as a tool for financing long-term care. Here are some of the articles I found, with a few notes about the substance:
Bradley Schwab, "The Birth of a Real Right: An Overview and Analysis of the Recent Revision of Book III, Title X of the Civil Code," 73 Louisiana Law Review 821 (2013):
The title of this article probably means a lot in Louisiana, but I have to say I would not have realized it was an entire article about annuity contracts, until my research discovered the author's conclusion for why annuity contracts are often "more appropriate than a reverse mortgage for those who eventually need long-term nursing home care." An impressive analysis -- from a recent graduate. Perhaps another example of an Elder Law student who "rocks?"
Paul Black, "Reverse Mortgages and the Current Financial Crisis," 8 NAELA Journal 87 (2012):
Starts with a detailed outline of the mechanics of reverse mortgages, before moving into analysis of the potential risks to borrowers, including predatory lending tactics, the recent prohibition on "bundling" of reverse mortgages with deferred annuities, and the potential for unintended consequences for Medicaid eligibility. Turns out the author, a 2010-11 Borchard Foundation Fellow, is a fairly recent graduate and this article is actually an expanded version of a paper he first wrote as a law student. Another Elder Law student who "rocks?"
Andrew Hyer et al., "Paying for Long-Term Care in the Gem State," 48 Idaho Law Review 351 (2012):
While surveying financing alternatives for long-term care in Idaho, the co-authors who are academics at Boise State, caution that studies suggesting use of reverse mortgages "saves" the state money on Medicaid. while interesting, could be based on out-of-date information.
It strikes me that I might be missing more recent analyses of reverse mortgages impacting Medicaid. Please don't hesitate to send me links to thoughtful pieces.