Veteran's Benefits and Other Ways to Get Long-Term Care Coverage

Part 4, Chapter 14: Specialized Situations: Coverage for Long-Term Care Page 11

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In a home equity loan, the individual generally receives either a single large payment or a line of credit. The amount of the payment or credit line that's available depends on a number of factors. As with a reverse mortgage, those factors include the amount of equity you have in your house, the interest rate you are paying, fees, and closing costs.

If you are considering the possibility of applying for either a reverse mortgage or a home equity loan to cover the costs of home health care, it's important to review the mortgage carefully. In addition to making certain that you understand the mortgage rules in detail, it's also important to make certain that you understand how the loan may affect your tax situation. Given the complexity of existing tax laws and the complicated economic issues involved, it's essential to discuss the possibility of a reverse mortgage or a home equity loan with family members and with an accountant and an attorney before making a decision.

There are other ways to provide for long-term care, as well. If you are a veteran, you may be able to arrange coverage for home health care or for long-term care through veterans' benefits, particularly if you have a service-connected disability. Eligible veterans may also be able to obtain prescription medications at low cost from the local Veterans' Administration clinic. (See Appendix B for a list of additional sources of information about veterans' benefits.) Depending on the area, an individual may also be able to obtain a variety of services -- including housekeeping meals, and transportation -- through various local community agencies. (See Table 18 for a review of possible sources of coverage for both home-based care and long-term care in a residential facility for eligible individuals.)

If you have limited assets, you may also be able to rely on Medicaid for coverage of your medical needs under certain conditions. However, if you have significant assets, you should be aware that there are existing laws that relate to the issue of assets and Medicaid eligibility. Given the complexity of those laws, it's important to discuss the issue with an attorney before making any decisions.

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