A common concern among reverse mortgage applicants is whether or not their Medicaid benefit will be affected by a reverse mortgage. Medicaid is a government-sponsored program that is intended to provide healthcare to low-income individuals. Unlike with Social Security and Medicare, Medicaid eligibility can be affected by a reverse mortgage.
What is Medicaid?1
- Medicaid is the nation’s public health insurance program for people with low income. Medicaid provides health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities.
- 65.9 Million People are covered by Medicaid.
- Medicaid is administered by states according to federal requirements.
- The program is funded jointly by states and the federal government.
What Services Are Covered with Medicaid Benefits?1
- States establish and administer their own Medicaid programs and determine the type, amount, duration, and scope of services.
- Federal law requires states to provide certain mandatory benefits which include inpatient and outpatient hospital services, physician services, laboratory and x-ray services, and home health services, among others.*
- States are allowed the choice to cover other optional benefits such as prescription drugs, dental services, and optometry services to name a few.*
A reverse mortgage can be helpful to senior homeowners who are looking for additional funds. Borrowers are not automatically disqualified for Medicaid with a reverse mortgage. However, the homeowner has to be careful with the amount of reverse mortgage funds they have readily available every month. Therefore, determining Medicaid eligibility with a Reverse Mortgage can become quite complicated.
Seniors should contact their state’s Medicaid administrator to determine exactly how to comply with the Medicaid eligibility requirements if they take out a reverse mortgage. Having an expert advise you can help you make a more informed decision.
*A complete list of Mandatory and Optional Medicaid Benefits can be found at https://www.medicaid.gov/medicaid/benefits/list-of-benefits/index.html