Medicare Open Enrollment began October 15th, and continues through December 7th. According to AARP, you are eligible to enroll for Medicare if you are 65 or older, a US citizen or legal resident, and you or your spouse have worked long enough to be eligible for Social Security.1 If you are already enrolled but not happy with your coverage, you can change your current Medicare plan during open enrollment to add prescription drug coverage, supplemental coverage, or opt for an alternative plan.
The standard Medicare plan covers most medical expenses, but some things require third party insurance or out of pocket payment. In fact, about 90% of Medicare beneficiaries purchase some form of additional supplemental insurance to help cover medical expenses.2
Healthcare costs are on the rise with no end in sight, medical expenses for individuals typically double from 70-90 years old.3 These expenses can quickly add up to alarming amounts. When planning for retirement, Fidelity Investment experts recommend saving about $240,000 for future medical expenses.4 Understandably, medical expenses are reported as the number one financial fear for retirees. If you, like many, are unable to save hundreds of thousands of dollars to cover your medical expenses in retirement there are other options to turn to.
If you are a homeowner 62 years or older and have a significant amount of equity, a reverse mortgage can provide the means to access a portion of your home’s equity to help cover medical costs. Reverse mortgages do not require monthly mortgage payments5 and you can receive your loan proceeds as a line of credit that will grow over time6 and can be accessed anytime an unexpected medical expense comes up or as needed. You can get a lump sum7 or draw a small amount at closing to pay off existing medical debts. You can get monthly payments to help cover ongoing medical expenses like prescription drugs not covered by insurance. A combination of these payment methods can also be set up to help you meet your financial goals.
To learn more about how a reverse mortgage can help you cover existing or future medical expenses not covered by Medicare, contact a licensed loan advisor at 1(800) 976-6211 or click here to request a no-obligation eligibility assessment.
1 AARP. Do You Qualify for Medicare? https://www.aarp.org/health/medicare-insurance/info-04-2011/medicare-eligibility.html
2 National Public Radio. Medicare Coverage Explained. http://www.npr.org/templates/story/story.php?storyId=113057385
3 The National Bureau of Economic Research. Total Medical Spending of the Elderly. http://www.nber.org/aginghealth/2015no2/w21270.html
4 AARP. What Health Care Will Cost You. https://www.aarp.org/health/medicare-insurance/info-12-2012/health-care-costs.html
5 You must still live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.
6 The reverse mortgage loan balance grows at the same rate as the available line of credit. Line of credit growth occurs and is only a benefit when a portion of the line of credit is not used. The unused line of credit grows over time and more funds become available during the life of the loan.
7 Only available on a fixed rate loan.