Medicare Eligibility and Reverse Mortgages

To qualify for all Medicare programs you must be at least age 65 (or disabled), have worked in Medicare covered employment for at least ten years (or have a spouse who has), and be a legal United States citizen or resident. There are no income or asset restrictions meaning obtaining a reverse mortgage will not impact Medicare qualifications in any way.

Medicare Part A covers the cost of inpatient hospital stays, skilled nursing facilities, hospice care, and some home health care. While Medicare Part A is free to most people, its coverage is limited. For instance, the longest stay in a skilled-nursing facility that Medicare will cover is 100 days. Of this 100 day period, only 20 are fully covered with the remainder requiring a daily deductible. In 2007, the patient’s portion would have come to $9,920 over those 100 days. Many older Americans can find this cost overwhelming and may consider turning to a reverse mortgage to help.

Medicare Part B picks up where Part A leaves off, covering outpatient services such as doctors visits, outpatient care, and some preventative services. Unlike Part A, which is free to qualified individuals, Part B charges a premium which may be based on your income. Because payments received from a reverse mortgage are considered loan proceeds and not income, they will not affect the Medicare Part B premium.

Medicare Part D is the newest addition to the program, covering prescription drugs. There are dozens of available plans, each containing unique characteristics that deserve careful consideration. Everyone who qualifies for Part A and B also qualifies for Part D. There are subsidies available for low income individuals. Again, reverse mortgage proceeds are not considered income and will not effect qualification for Part D subsidies.