7 Ways to Score Free Dental for Seniors on Medicare

Affording dental work can be tough if you’re an older American on Medicare.

That’s because Original Medicare — which covers a majority of beneficiaries — doesn’t include routine dental care.

Congress is considering whether to add dental coverage to Medicare as part of a $3.5 trillion social spending package — but progress has been slow.

For now, older adults are mostly on the hook when it comes to paying for their own oral health care.

Here are seven ways to get free or reduced dental care. We’ll also explain what limited dental benefits Medicare coverage provides, along with other options like private insurers and Medicaid.

7 Places to Get Cheap or Free Dental Care for Seniors

Medicare beneficiaries who use dental services spent an average of $874 a year out-of-pocket, according to an analysis by the Kaiser Family Foundation.

That’s a lot of money, especially if you’re on a fixed income.

Here are a few tips and tricks to save big on oral health.

1. The Dental Lifeline Network

This program by the American Dental Association offers free, comprehensive dental treatment to specific groups, including people ages 65 and older.

You can use this tool on the Dental Lifeline Network website to learn about the specific program details in your state.

Heads up: Due to long wait lists, several states and counties are no longer accepting new applications for the Dental Lifeline Network program. When we did a quick search, states like Texas, California and Kentucky weren’t accepting new applications.

2. Community Health Clinics

Federally funded community health clinics provide reduced-cost or free dental care services to people with low incomes.

Many operate on a sliding scale system while others offer flexible payment plans.

Wait lists can be long, so it’s important to reach out to your local clinic early.

Follow this link to find the nearest community health clinic near you.

3. Dental Schools

Some dental schools offer low-cost cleanings and other routine care to members of the community.

Most of these teaching facilities have clinics that give dentists-in-training an opportunity to practice their skills while providing care at a reduced cost.

You can search for a program in your area by visiting the American Dental Association website.

There’s no guarantee that a dental program in your area currently offers free or reduced dental care. You’ll need to contact each program individually to see what’s available.

When you call, make sure to ask about any fees up front.

4. NeedyMeds.com

This website offers a comprehensive list of dental offices with sliding scale payment options, community health center locations and dental school clinics.

It does a great job breaking down requirements and eligibility (if any) for services in your area, and provides contact information for each service.

Just enter your zip code into this search tool to get started.

5. Talk With Your Dentist

It might be difficult to ask for help, but being honest with your dentist about your financial situation can help.

Your dentist may be able to offer a less expensive treatment, help you set up a payment plan or provide a sliding scale payment option.

Ask if you can receive a discount for referring a friend. Or, see if it’s possible to knock off a few bucks in exchange for a positive online review of the dentist office.

6. Sign Up for a Dental Savings Plan

Dental savings plans aren’t dental insurance, but they may still be able to save you money.

Here’s how it works.

With a dental savings plan, you pay an annual fee, then get a 10% to 60% discount on most dental services such as exams, cleanings, fillings, root canals and crowns.

The plan contracts with dentists who agree to reduce their fees, then you pay the participating dentist directly using your discount.

You’ll still pay out of pocket for those services, but the idea is that you won’t pay as much as you would without the plan.

But let’s be clear: Dental discount plans aren’t free. The average cost for plans in Orlando, Florida, for example, ranged between $135 to $170 a year.

You can visit DentalPlans to find a plan in your area.

7. Shop Around

Dentists can charge widely different prices for the same exact procedure.

When you’re paying out of pocket, it pays to shop around.

You can find average prices in your area by using FAIR Health, a national nonprofit organization. The site lets you search by specific procedures, so you get the average cost for a root canal or teeth cleanings in your area.

Armed with knowledge, call around to different dentist offices for quotes. Ask about senior discounts.

You can also look for discounted dental care on sites like Groupon.

A quick search on Groupon for dental services in Houston, Texas, showed numerous x-ray, exam and cleaning packages for $25 to $50. One office even offered $700 toward dental implants for just $40!

If you live in a high cost-of-living area, driving to a less expensive area is another smart way to save money.

A senior citizen laughs as a dentist shows him dentures.
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Does Medicare Cover Dental Care?

Yes and no.

Original Medicare doesn’t provide coverage for routine dental, vision or hearing benefits.

Original Medicare will only cover dental work if it’s deemed medically necessary, i.e. you were hospitalized after a traumatic injury that also affected your jaw, teeth or mouth.

Here are the other dental services covered by Medicare Part B:

  • Dental services that are critical to a larger procedure like facial reconstruction after an accident.
  • Tooth extraction that is needed to prepare for radiation treatment.
  • Oral exams that are done to prepare for a kidney transplant or heart valve replacement.

So if you’re looking for standard dental care like teeth cleaning, X-rays, fillings, extractions, dentures and more — the cost comes out of your pocket.

Medicare Advantage

Medicare Advantage plans are administered by private insurance companies. They must provide the same basic coverage as Original Medicare, but plans may offer additional benefits, such as dental.

About 94% of private Medicare Advantage plans provide some dental coverage, but the amount of coverage varies by plan.

According to the Kaiser Family Foundation, nearly all Medicare Advantage plans that include dental offer coverage for oral exams, cleanings and x-rays.

But benefits for more advanced dental work like root canals, implants and dentures can carry substantial copays, depending on the plan.

Medicare Advantage plans almost always impose restrictions, including annual dollar caps and how often you can get certain benefits, such as dental implants.

The average annual limit on dental benefits among Medicare Advantage plans that offer more extensive benefits was about $1,300 in 2021, according to KFF.

If you’re in a Medicare Advantage plan, it’s important to check the plan’s summary of benefits or evidence of coverage to see exactly what dental work is covered. It can vary widely from plan to plan.

Other Dental Insurance for Seniors

About half of all Medicare beneficiaries — 47% — did not have any form of dental coverage in 2019, according to the Kaiser Family Foundation.

Besides Medicare Advantage plans, other sources of dental coverage for seniors include Medicaid and private plans, such as employer-sponsored retiree plans and individually purchased dental plans.

Private Dental Insurance for Seniors

A standalone dental policy for people 65 and older is typically $20 to $50 a month, according to AARP. These dental insurance policies usually come with an annual deductible of $50 to $100.

Dental insurance plans usually cover checkups and cleanings 100% but you will probably owe 20% to 50% for other services, such as tooth extractions or dentures.

The devil is in the details with private dental plans: It’s important to shop around and carefully compare benefits to make sure you’re getting the best deal.

Here are a few other things to keep in mind about private dental insurance plans:

  • You can’t enroll in a dental plan through the federal ACA Marketplace if you’re already enrolled in Medicare.
  • ​​Private dental policies usually don’t charge higher monthly premiums if you’re over 65 or in poor health.
  • An insurance company may require you to undergo a waiting period before you can get expensive procedures.
  • Some plans won’t cover pre-existing dental conditions you had before enrolling in coverage.
  • You may be restricted to an in-network dentist, so check to see if your dentist is on the list.

Medicaid

About one in five Medicare beneficiaries is also enrolled in Medicaid, sometimes referred to as being “dual enrolled.”

Medicare usually pays as your primary insurance when you’re dual enrolled. But if you need dental work done or even a yearly cleaning, consulting your Medicaid handbook is a smart move.

If you meet Medicaid low income requirements in your state, you may be able to receive free or low-cost dental care for certain procedures and services.

But it’s not a guarantee. While most states provide at least some emergency dental services, only 36 states and Washington, D.C. offer limited or comprehensive dental benefits for adults, according to the National Academy of State Health Policy (NASHP).

Even if your state Medicaid program includes dental, it may not pay out much. Of the 36 states with routine dental care coverage, only 23 states offer an annual expenditure cap of $1,000 or more.

Adult Medicaid recipients in Arkansas, for example, only receive up to $500 of dental services a year. So if you need a $3,000 root canal and you’re dual enrolled with Original Medicare, you can expect to pay $2,500 out of pocket in that state.

According to Medicaid’s national website, “States have flexibility to determine what dental benefits are provided…There are no minimum requirements for adult dental coverage.”

To find the Medicare office contact information for your state, click here.

Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.

Source: thepennyhoarder.com

Does Medicare Cover Hearing Aids? 6 Ways to Save Money

Affording hearing aids is challenging if you’re an older American on Medicare.

That’s because Original Medicare — which covers a majority of beneficiaries — doesn’t cover hearing aids, fittings or hearing exams.

That’s right — not a dime. And hearing aids are expensive: The average cost for one pair ranges from $3,000 to $6,000.

About 1 in 3 people between the ages of 65 and 74 have hearing loss, and nearly half of people 75 and older have difficulty hearing, according to the National Institute on Aging.

For now, older adults are mostly on the hook when it comes to paying for hearing care.

In this guide, we break down what hearing aid coverage is available to both Original Medicare and Medicare Advantage beneficiaries.

We also explore other ways to save money on hearing care, including Medicaid and nonprofit programs.

Does Medicare Cover Hearing Aids and Exams?

Original Medicare doesn’t cover hearing aids or exams for fitting hearing aids. Some Medicare Advantage plans have hearing aid coverage, but it varies by plan. Some other services are covered under both, however.

Original Medicare

In some situations, Original Medicare coverage may pay for cochlear implants or hearing tests in emergency situations.

Original Medicare covers 80% of the cost of cochlear implants for those who qualify. Cochlear implants are considered medically necessary for the treatment of a severe to profound hearing impairment.

Medicare Part B will generally cover a cochlear implant if you recognize sentences while wearing your hearing aids only 40% of the time or less.

Medicare Part B will also cover 80% of a diagnostic hearing test and balance exams, but only if it is ordered by your doctor or health care provider during an emergency.

For example, a doctor may run these tests to diagnose the cause of dizziness or vertigo.

Need a refresher on how Medicare works? Check out answers to seven frequently asked questions. 

Medicare Advantage

Original Medicare doesn’t provide hearing aid coverage, but many Medicare Advantage plans offer hearing health benefits.

Medicare Advantage plans are administered by private insurance companies. They must provide the same basic coverage as Original Medicare, but plans may offer additional benefits, such as hearing aids.

About 93% of Medicare Advantage plans provided some hearing aid coverage in 2021, according to the Kaiser Family Foundation.

But how much coverage each Medicare Advantage plan provides varies.

For example, the KFF analysis found that about 60% of enrollees are in plans that require cost sharing for hearing aids, which ranged from $5 up to $3,355 in 2021.

Most plans also include coverage limits and restrict you to a specific network of physicians.

Make sure you calculate your potential out-of-pocket costs when choosing a Medicare Advantage plan.

Remember: Even with a good Medicare Advantage plan, you may still face out-of-pocket costs, such as premiums and deductibles as well as copayments to see an audiologist for fittings.

6 Ways To Get Cheap Hearing Aids

Medicare beneficiaries who accessed hearing care services spent an average of $914 out-of-pocket in 2018, according to an analysis by the Kaiser Family Foundation. For many, that’s simply out of reach.

Some national organizations cover hearing aids for people with low incomes and limited resources. These programs often have strict eligibility criteria and may be difficult to qualify for.

There are other ways to get affordable hearing aids, including shopping around and asking your audiolist for sliding scale payment options.

1. Miracle-Ear Foundation’s Gift of Sound Program

The Miracle-Ear Foundation’s Gift of Sound program helps provide hearing aids for adults with hearing loss.

The program is available to individuals with significantly limited incomes under 200% of the federal poverty level who have exhausted all other financial resources.

You need to contact your local Miracle-Ear store before starting an application. Supporting documentation from a hearing care professional and an application fee of $150 is required.

You can find more information about the Gift of Sound program along with eligibility requirements here.

2. Help America Hear Program

The Help America Hear program provides hearing aids for adults with limited financial resources.

The program can provide both new ReSound behind-the-ear and receiver-in-canal digital hearing aids.

There are three qualifying tiers based on gross household income, personal assets and health insurance coverage.

Every applicant is required to pay a fee, which can range from $125 to $500 for one hearing aid, to $250 to $1,000 for two hearing aids.

The application process is extensive and requires medical documentation, proof of income and proof of health insurance (if any).

The entire application process can take two to six months, according to the organization’s website.

If you qualify, you are still responsible for the cost of the hearing evaluation, batteries, accessories as well as extended loss and damage warranties.

Click here to check out the Help America Hear program application.

3. Check Out Costco

Comparison shopping is important if you want to save money on hearing aids.

Wholesale clubs like Costco offer great deals on hearing exams, fittings and devices.

Costco’s private brand, Kirkland Signature, sells hearing aids for about $1,400 per pair — about half the price you’d pay elsewhere for a name-brand equivalent. They also offer free hearing tests.

Not every Costco location has on-site audiologists or hearing specialists and you’ll need an appointment. You’ll also need to sign up for a Costco membership, which starts at $60 a year.

4. Talk to Your Doctor

It never hurts to ask for a discount.

It may sound like a no-brainer, but simply asking your health care provider for a more affordable price can really help.

According to Consumer Reports, almost half of all hearing aid users in their survey who asked for a lower price on their hearing aids ultimately received a discount.

Most audiologists and hearing care professionals offer financing plans and some offer sliding scale payment options.

Wherever you go to purchase your device, try bargaining or asking for a lower-priced model.

The price of a hearing aid is sometimes “bundled” to include the device plus other costs, like the audiologist’s services for fittings, adjustments and follow-up care.

Asking your provider to unbundle their services and provide you with an itemized list of charges can help you save money because you’ll only pay for what you need.

5. Keep an Eye Out For Over-the-Counter Hearing Aids

Hearing aids may get much more affordable in the near future thanks to an FDA proposed rule issued in October 2021.

The rule would create a new class of over-the-counter (OTC) hearing aids available without an exam or fitting by an audiologist.

OTC hearing aids would be available from any seller — and at a fraction of the cost. Consumers could pay about $600 per pair instead of upward of $5,000 per pair, according to Harvard Health Review.

It would also cut the red tape many consumers face: Currently, patients must see a licensed hearing professional and obtain a prescription before they can buy hearing aids.

OTC hearing aids will be available to adults with mild to moderate hearing loss, and will be equipped with the same basic technology as traditional hearing aids.

The FDA is currently finalizing its proposed rule. OTC hearing aids are expected to hit the market by the end of 2022, according to The New York Times.

Local Organizations and Programs

Some local and regional nonprofit programs provide financial assistance or discounted hearing aids to those who qualify.

You can call United Way’s 2-1-1 social services number or contact your local Area Agency on Aging to see what’s available.

To find the contact information for your local Area Agency on Aging, enter your zip code into the Eldercare Locator tool operated by the U.S. government.

Other Hearing Care Insurance

Medicare coverage for hearing aids may be limited but Medicaid and VA benefits can help pick up the cost if you qualify.

Medicaid

About one in five Medicare beneficiaries is also enrolled in Medicaid, sometimes referred to as being “dual enrolled.”

Medicaid is a federally-funded health insurance program for people with low incomes. It’s administered at the state-level, so each state determines its own hearing benefits and limitations.

About half of states offer some hearing benefits and coverage for hearing aids.

What’s covered varies even among states with hearing aid benefits. In Florida, for example, you can receive a pair of hearing aids once every three years but in North Dakota, Medicaid recipients are entitled to hearing aids only once every five years.

In some states, like New Jersey and Massachusetts, hearing aids are only available with specific Medicaid plans.

You can see what benefits your state offers along with any limitations and requirements by visiting this comprehensive list from the Hearing Loss Association of America.

Or call and ask the Medicaid program in your state to see if you qualify.

Veterans’ Benefits

Veterans may qualify for hearing aids through the U.S. Department of Veterans Affairs (VA).

You must enroll in the VA Health Benefits program to qualify.

Once enrolled (or if already enrolled), you can schedule an appointment at an Audiology and Speech Pathology Clinic for a hearing evaluation.

If the doctor recommends hearing aids, you can receive the devices for free so long as you maintain VA eligibility for care.

The VA will also provide necessary maintenance of any hearing aids you receive, including replacement batteries, cleaning and adjustments.

If you live more than 40 miles from a VA clinic or if you can’t get an appointment for at least a month, you may qualify to see a private audiologist through the VA’s Choice Program.

The VA provides hearing aids to the following veterans:

  • Former Prisoners of War.
  • Purple Heart recipients.
  • Those rated permanently housebound or in need of routine care.
  • Those with any service-related disability.
  • Those with hearing loss resulting from a disease or medical condition for which they receive VA care or disability.
  • Those who have hearing loss severe enough that it hinders their ability to participate in their own medical treatment or daily living.

Even if you don’t use the VA for your other health care needs, it’s smart to use it for hearing aids. It’s one of the only programs that provides high-quality devices at no cost.

To apply, visit your local VA office, go online or call 877-222-VETS (8387).

Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.

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Source: thepennyhoarder.com

Medicare Vision Coverage: How to Save Money on Eyeglasses and Exams

These services are free to qualifying older Americans. It’s one of the only national programs that offers free eye exams for people on Original Medicare.
Members of AAA and AARP can get the following discounts at LensCrafters:
Like Walmart, Costco eye exam costs vary, but you can expect to pay anywhere from to 0 for an exam.
Medicare Advantage plans also restrict the vision benefits they offer, including:
Finally, numerous local nonprofits offer free eye exams throughout the year. Call United Way’s 211 service to see if a program exists near you. Or Google “free eye exams near me.”

How Medicare Covers Vision

Plans are generally inexpensive — usually to a month — and premiums usually don’t increase with age like other types of health insurance.
Medicare Part B covers 80% of the cost for: 
Ready to stop worrying about money?
You can see if you qualify and apply for the program by filling out this form.

Original Medicare

The OneSight Vision Voucher program helps people in need receive free eyewear if they’re not able to cover the cost of eyeglasses with insurance.
Both retailers also offer a wide selection of eyeglasses in the to range.
Some diseases and conditions — such as lupus and shingles — can affect your vision even though they aren’t traditional eye diseases. Medicare Part B covers treatment for your eyes if you have one of the many conditions on this list from the U.S. Centers for Medicare & Medicaid Services.

Medicare Advantage

Original Medicare does not cover routine vision exams, eyeglasses or contact lenses. Lasik surgery isn’t covered either.
Retailers like Costco and Walmart offer optical centers with affordable pricing on eye exams and glasses.
Veterans can also qualify for free eyeglasses or contact lenses by meeting one of the following criteria:

  • how often you can replace glasses and/or contact lenses.
  • how often the plan will pay for eye exams.

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Older people with low incomes may also qualify for free or reduced eye exams at their local county health department.

Need a refresher on how Medicare works? Check out answers to seven frequently asked questions. 

Medicare Coverage for Other Eye Treatments and Conditions

There is also a program that provides free eyeglasses to those who qualify — but be prepared to jump through some hoops first.
In states that do provide vision benefits, basic eye exams are covered. Prescription glasses with basic frames are also usually covered, but each state has specific caps.
Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.
Students at optometry schools sometimes provide free or discounted eye exams during clinics.

  • Certain treatments for serious eye conditions, including micro-invasive glaucoma surgery.
  • Cataract surgery. Medicare will pay to implant a conventional intraocular lens. It will also cover one pair of standard-frame eyeglasses or a set of contact lenses after cataract surgery.
  • Detached retina treatment.
  • Treatment for certain dry eye conditions.
  • Eye exam for people with diabetes to detect glaucoma and diabetic retinopathy.
  • Annual glaucoma test for people at high-risk of developing the disease or with a family history of glaucoma.
  • Some tests and treatments for age-related macular degeneration.
  • An eye prosthesis (artificial eye) for patients with absence or shrinkage of an eye due to birth defect, injury or surgical removal.
Pro Tip
If you have an eye disease that causes low vision, such as macular degeneration or glaucoma, Medicare Part B will cover screening tests and standard treatment.

Here’s how it breaks down.

How to Save Money on Vision Care Costs

If you are also enrolled in Medicaid or Veterans Affairs health benefits, you may qualify for free or low-cost vision care.
Original Medicare does cover eye care related to illness or injury, including cataract surgery and glaucoma screenings. More on that shortly.
Many of these sites offer virtual “try on” features and come with convenient return policies so you can find frames and lenses that work for you.

How to Save Money on Eye Exams

If you have a serious eye disease like cataracts or glaucoma, Medicare Part B will generally pay for treatment.
You can use this tool to search for schools in your area — although the eye exams and care provided vary from school to school.

Discounts for AAA and AARP Members

To receive your AAA or AARP member discount, make sure to present your membership card at participating locations. 
Buying eyeglasses online is a cheap alternative to paying hundreds of dollars for a fancy pair at your optometrist’s office.

  • 30% off comprehensive eye exams.
  • 50% off a complete pair of eyeglasses (frame and lenses) and prescription sunglasses. Valid in-store and online.
  • 10% off disposable contact lenses.
  • 30% off non-prescription sunglasses.

According to a recent survey from Consumer Reports, people who bought glasses online paid a median of , while those who shopped in-store spent 4.

  • $55 comprehensive eye exam at participating independent eye doctors (Use this tool to find a location near you).
  • $10 off best in-store offer on a complete eyewear purchase at Target Optical.
  • 10% off contact lenses at Target Optical.
  • $10 off non-prescription sunglasses at Target Optical.
  • 30% off a complete pair of glasses at Glasses.com (Use code RP_30OFF_GL at check out).
Pro Tip
Source: thepennyhoarder.com

Costco and Walmart

Medicaid will cover eye exams for adults ages 21 and older in most states — but not all.
Talk to your VA primary care provider or contact your nearest VA medical center or clinic for more information.
Here are the steps you need to take:
So how do you know, in your own case, what’s covered and what’s not?

EyeCare America

Its Seniors Program provides comprehensive eye exams and up to one year of followup care for any eye condition diagnosed during the initial exam.
The services above are covered whether you have Original Medicare or a Medicare Advantage plan. 
Fortunately, several programs and organizations offer free or discounted eyeglasses and exams for older adults.
EyeCare America is the public service arm of the American Academy of Ophthalmology.

  • Be age 65 or older.
  • Be a U.S. citizen or legal resident.
  • Not belong to an HMO or have eye care benefits through the VA.
  • Not have seen an ophthalmologist in three or more years.

Medicaid is a federally funded health insurance program for people with low incomes. It’s administered at the state-level, so each state determines its own vision benefits and limitations.
By law, both Original Medicare and Medicare Advantage must cover the same basic vision services for eye diseases and chronic conditions.

Lions Club International

Check out OneSight’s website to learn more about its vision voucher program.
Research your specific state’s Medicaid vision coverage or contact your local Medicaid office for more information. Speaking with a local Medicaid office and your individual plan provider is the best way to understand your specific vision benefits.

Optometry Schools and Senior Discounts

If you’re enrolled in Medicare, routine vision care isn’t guaranteed.
Finally, to get these vision benefits, you will need to use certain eye care professionals and services within your specific Medicare Advantage plan network.
If you have VA health care benefits, the program will cover your routine eye exams and preventive vision testing.
At Walmart, eye exams average about , but prices vary by location.
Copays for eye exams with Medicaid are affordable, usually or less.
Here are some of the best ways to reduce your out-of-pocket costs on routine vision care when you’re enrolled in Medicare.

A man tries on eyeglasses.
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Where to Get Free or Cheap Eyeglasses

For more information, reach out to your local Lions Club chapter.
Just a heads up: This program does not cover the cost of eyeglasses.

OneSight Vision Voucher Program

Medicare may not be your only form of insurance.
Here are a few ways to keep more money in your pocket without forgoing important eye care.

  1. Get a referral letter from a nonprofit organization verifying your visual and financial need for glasses. The letter must be written on company letterhead and include the Tax ID# of the nonprofit organization. Recommended nonprofits include churches, the Lions Club, Prevent Blindness, Red Cross and United Way.
  2. You’ll need a valid prescription from an eye doctor. If you don’t have a prescription that is less than two years old, you can ask the onsite doctors at a Luxottica Retail location if they can donate a free eye exam.
  3. Take your referral letter and prescription from an eye doctor to a participating Luxottica Retail location — which includes LensCrafters, Target Optical and Pearle Vision corporate stores — to get your free pair of eyeglasses.

Some privately administered Medicare Advantage plans cover eyeglasses and eye exams.

Cheap Online Eyeglass Retailers

Medicare beneficiaries can purchase private vision insurance to help offset the cost of eyeglasses and routine eye exams. According to KFF, medicare patients spent an average of 0 out of pocket on vision care in 2018.
The following groups can also qualify for free eyeglasses through the VA:
But that’s not the case for routine exams and eyeglasses.
You should carefully examine any private vision insurance plan benefits and costs before signing up. Make sure the plan actually saves you money on eyeglasses and routine exams.

Does It Make Sense to Buy Private Vision Insurance on Medicare?

But Original Medicare — which provides health insurance to about 37.7 million Americans — doesn’t pay for your new eyeglass frames or an annual vision exam.
Privacy Policy
Another option is asking local vision care providers if they offer any senior discounts or in-house financing plans. Make sure to call ahead and ask before scheduling an appointment.
To qualify for the EyeCare America Senior Program, you must:

Does the VA or Medicaid Cover Eyeglasses and Eye Exams?

You’ll pay 20% of the Medicare-approved amount for these covered treatments and services after meeting your Part B deductible.
The national average cost of a comprehensive eye exam is , according to All About Vision and other sources, but the figure can vary from to 0.

Medicaid Vision Coverage

However, vision benefits are pretty modest — plans offer about 0 worth of eyewear and eye exam coverage a year on average, according to an analysis by the Kaiser Family Foundation (KFF).
AARP members also receive these discounts through other providers:
These undergraduates are closely supervised by faculty members, so it can be a cheap way to score a routine vision test.

  • At least 42 states offer some coverage for optometrist services.
  • At least 33 states offer some coverage for eyeglasses.

Some online retailers, like Zenni Optical, offer single prescription glasses starting at just . You’ll pay more for special coatings, progressive lenses and other add-ons.
For example, 47% of Medicare Advantage plans limit beneficiaries to one pair of eyeglasses every two years, according to the KFF analysis.
However, private insurance monthly premiums, copayments and deductibles may not make it worthwhile.
Once you’re clear on your coverage, make sure your eye doctor accepts Medicaid before scheduling an eye exam.

VA Vision Coverage

AAA and AARP members can receive discounts at participating LensCrafters and other retail locations nationwide.
Affordable eyeglass lenses and frames are easy to find online or at large retail stores like Walmart and Costco.
You’re on the hook for the full cost unless you have a separate private vision care policy or secondary insurance like Medicaid.

  • Have a disability linked to your military service for which you’re receiving VA disability payments.
  • Are a former prisoner of war,
  • Were awarded a Purple Heart.
  • Receive benefits under Title 38 United States Code (U.S.C.) 1151.
  • Receive an increased pension because you’re permanently housebound and in need of regular aid.
  • Experience vision problems caused by another  illness — such as stroke or diabetes — for which you’re receiving VA care.
  • Suffer from geriatric chronic illnesses (long-lasting illnesses that affect the elderly).

Eyeglasses and routine vision exams are pricey for Original Medicare beneficiaries.

  • Veterans with significant functional or cognitive impairments.
  • Veterans with a vision impairment severe enough that it interferes with their ability to participate in their own medical treatment.
  • Veterans who have service-connected vision disabilities rated 0%.

Whether you’re new to Medicare and wondering what to expect at your next eye exam, or you’re a long-time beneficiary trying to save money on glasses, our guide to Medicare vision coverage and affordable eye care is here to help.
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Nearly all Medicare Advantage plans — which are administered by private insurance companies like United Healthcare and Cigna — include some routine vision coverage.

Home Birth vs. Hospital Birth Costs – Is Natural Birthing with a Midwife For You?

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Additional Resources

When preparing to have a child, it’s crucial to consider the financial aspects. It may not be as costly as financing an adoption, but pregnancy and childbirth bring a financial burden. And the total cost largely comes down to whether you choose a home birth or hospital birth. 

As soon-to-be parents, you naturally want to make the choice that gives your baby the greatest chance to survive and thrive. However, the cost of giving birth in the United States is high, and health insurance plans are complicated. 

While there are many personal and emotional reasons to choose home or hospital birth, you must also consider the financial implications.   

Home Birth vs. Hospital Birth Costs 

When deciding between giving birth at home or in a hospital, look at the cost of having a baby in either situation. Four primary factors are involved: pregnancy and prenatal care, labor and delivery, a hospital stay, and postpartum care. 


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Home Birth Cost Factors

Home birth seems like it should be less expensive than a hospital birth. But the costs can add up quickly if you go in unprepared.

Insurance Coverage for Home Births

Some states’ insurance allows coverage for home births — but not all of them. As of May 2020, only 21 states covered home birth under the Medicaid program, for example. 

As you’re preparing, a couple of things are essential: asking your insurance carrier what types of birth they cover and ensuring you choose something that fits the bill. Some insurance companies may only cover a home birth with a certified nurse-midwife attending, while others may only cover a midwife if you give birth in a birthing center. 

So it’s key to communicate clearly with your insurance provider. Find out what your out-of-pocket costs are for any deviations from their typical requirements. 

Home Birth Prenatal Options

Home birthers typically receive a similar level of prenatal care as those having a hospital birth. However, when you decide on a home birth, you might work closely with a midwife, doula, or both. Each birth assistant has different roles and responsibilities.

  • A doula is a guide who provides physical and emotional support before, during, and after childbirth. They may be doula-certified, but they are not necessarily medical professionals. 
  • A midwife is a trained professional who assists healthy individuals in childbirth and provides prenatal and postnatal care. Training varies, but certified nurse-midwives have completed a training program, making them the safest (and most expensive) option.

Doula and midwife fees vary greatly based on geographic location and services provided. It’s usually more expensive in cities and higher-cost-of-living areas. 

For example, in a large city in the Dallas-Fort Worth, Texas, metro area, you can find doula packages ranging from $1,600 to $2,500. But in a significantly smaller city like Abilene, Texas, they’re less than $1,000. But going to an even higher cost-of-living area like New York City may mean a minimum of $2,000.

Typically, the doula fee includes a specific number of prenatal visits, prenatal support and information, assistance during labor and delivery, and at least one postpartum visit. Typically not included are prenatal vitamins, any required lab work, or any type of hospital visit. 

Midwives are generally more expensive. Because of the wide variance in things like certification status, it’s hard to put a solid number on midwife costs. But expect to pay on the high end of doula costs at a minimum. But some midwives may charge $5,000 or more.

Note that the fees for doulas and midwives may not include necessary medical exams like regular OB-GYN visits and ultrasounds. And those cost just as much as they would for a hospital birth if they’re not included as part of your package (some midwives and doulas work with OB-GYNs).

You also need prenatal vitamins, which are relatively inexpensive. For example, many prenatal vitamins range from about $0.08 to $0.48 apiece at Walmart. Over nine months of pregnancy, that’s only between about $20 and $130. Fortunately, you don’t need a prescription, so there’s no added cost for a doctor’s visit.

Home Birth Labor & Delivery Costs

Fortunately, if you’re electing for a home birth, you’re skipping one of the most significant expenses associated with childbirth: the hospital stay. That’s a major benefit many expectant parents appreciate about the home-birth option. Ideally, you’d incur zero hospital costs. 

And doula and midwife packages typically include labor and delivery. 

A midwife will usually provide equipment like IVs, sterile gloves, gauze pads, a thermometer, and waterproof bed covers. You may want to ask your midwife just to be sure, though. Doulas may provide some of this equipment, but they’re not authorized to insert IVs unless they’re also medical professionals. 

You may also have to purchase special equipment if your doula or midwife doesn’t provide them. Costs vary, depending on the types of supplies you need. 

Even if your midwife or doula doesn’t provide them, simple items like waterproof mattress covers cost under $40 on Amazon. But if you need a birthing tub, you’re looking at $100 or $200 and up at a retailer like Oasis or La Bassine. You can also look into renting one, though you may not save much money if you need to keep it for several weeks.

Fortunately, midwife and doula fees include some services hospitals may ask you to pay for, such as facilitating skin-to-skin contact. Even if it doesn’t cost much, it’s annoying to pay to hold your own baby.

If your home birth expenses come down to just a few thousand dollars paid to a midwife, that may sound like a simple decision from a financial standpoint. 

But you need to consider the safety of both the mother and baby. The infant mortality rate for babies born at home is several times higher than the rate of babies born at hospitals, according to a 2010 to 2017 study featured in the American Journal of Obstetrics and Gynecology. 

And just because you plan to give birth at home doesn’t mean it will turn out that way. So plan your ideal situation and have a Plan B in case complications arise. Have enough money saved for a hospital stay for both Mom and Baby. If things go smoothly, just add it to Junior’s college fund.

Postpartum Care After a Home Birth

Most doulas and midwives include some form of postpartum support and care in their packages. Your specific agreement may vary, but it’s fairly standard to offer at least one postpartum checkup. (Babies should see a pediatrician for their post-birth care.) 

Those with postpartum depression or psychosis must seek mental health treatment from a source other than their doula or midwife unless they’re also qualified therapists. That treatment may include talk therapy, medication, or a combination of the two.

You may also wish to seek the advice of a lactation consultant. Most midwives and doulas are trained to help, but a board-certified lactation consultant may provide further assistance if you need it. A home visit can be around $200 or more per hour, depending on your location. 

Insurance may cover some of these costs, but you can also get free online assistance at La Leche League. 

The U.S. Department of Agriculture also offers WIC breastfeeding support. Online resources are freely available to anyone, though you must qualify for the Special Supplemental Nutrition Program for Women, Infants, and Children to get personalized support. Your local health department may have resources as well.


Hospital Birth Cost Factors

Hospital births are often more expensive than home births, but that may not necessarily be true. In general, insurance covers hospital births more thoroughly than home births, meaning a home birth could lead to higher out-of-pocket costs. 

But a hospital birth costs considerably more than a home birth unless your insurance covers the majority. Know what your insurance pays for and what it doesn’t. 

Hospital Birth Insurance Coverage 

Under the Affordable Care Act (ACA), pregnancy, maternity, and newborn care are essential benefits that qualified health plans must cover. That said, if you’re a dependent on a parent’s or guardian’s policy, coverage may vary, so look into that sooner than later.

Note that its status as an essential benefit doesn’t prevent insurers from charging copays, coinsurance, or deductibles, so that doesn’t necessarily mean insurance covers the full cost.

But if you’re tempted by a home birth only for the cost savings, your insurance could drop the amount for a hospital birth to a very comparable number. So check into your coverage and do the math.

Some policies cover prenatal care at a higher level than others. Additionally, high-risk pregnancies require a greater level of care and could cost more, even with insurance. But you should likely opt for a hospital birth anyway.  

Whatever type of insurance coverage you have, know how much your deductible is, the length of hospital stay covered, and what doctors and hospitals are in your network to achieve maximum coverage. 

Additionally, if you require prenatal tests your insurance doesn’t cover, be mindful that you may incur those costs and can ask your doctor how much they are. For example, not all plans cover genetic testing.

Fortunately, there’s a cap on how much you can pay out of pocket on all medical care each year. On the most affordable Bronze level ACA insurance plans, the maximum individual out-of-pocket cost in 2022 is $8,700 for in-network medical services for an individual ($17,400 for a family). The max gets lower as you buy more expensive plans.

However, your pregnancy will last around nine months, meaning you could easily straddle two plan years, making the maximum overall individual out-of-pocket potential on the lowest plan $17,400. So that’s another factor to consider.

If you don’t have health coverage through an employer or your spouse, go to Healthcare.gov to see if you qualify for a special marketplace enrollment period based on a qualifying life event, such as losing your employer-sponsored health benefits or changes of state of residence.

While pregnancy is not a qualifying life event, it may give you access to programs like Medicaid or the Children’s Health Insurance Program (commonly known as CHIP). And even if you only qualify for open enrollment toward the end of your pregnancy, it can still save you significant cash.

Hospital Birth Prenatal Care Options 

The Kaiser Family Foundation says prenatal care totals an average of about $2,000, including about 12 doctor’s visits at $100 to $200 each if you don’t have ACA-compliant health insurance.

Hospitals also often provide free childbirth and infant care classes, so take advantage of those opportunities, especially if you’re a first-time parent. 

Your obstetrician will recommend prenatal vitamins and other preventative strategies to ensure your and the baby’s health throughout the pregnancy. The vitamins cost the same as they would for a home birth at around $21 to $130 for the whole pregnancy unless your doctor prescribes something special. 

When charged separately, ultrasounds range in cost from an average of $319 in New Jersey to $2,295 in Florida, according to a 2021 survey by Hospital Pricing Specialists. The national average cash price for an ultrasound came out to $745, so research prices in your area carefully.

General office visits to your obstetrician during pregnancy run about $207 if out-of-network or uninsured and $105 if insured and in-network, according to Fair Health Consumer. 

Prenatal care packages at hospitals and birthing centers typically detail how many visits and ultrasounds they include and what types of additional care they offer, which can save you money on those costs. But if you have insurance, ensure your plan covers a package before you buy it.

Hospital Birth Labor & Delivery Costs

Despite the cost, there are advantages to a hospital birth. It allows you to have an epidural, even if you initially planned against it. Epidurals will put the cost of a vaginal birth toward the upper range of any uninsured rate estimates. 

At the hospital, you can choose a cesarean delivery if it becomes medically necessary (even a certified nurse-midwife cannot legally perform a C-section). 

And that’s important because the type of delivery you have can also influence the cost. For example, health care cost transparency advocate Fair Health Consumer states that the national average charge for a vaginal delivery is $12,290. The national average charge for a C-section is $16,907. (That’s as of 2018.)

But those are just averages. How much it truly costs varies widely based on where you live and what services you want or need. 

For example, Fair Health Consumer puts the average uninsured cost of a vaginal delivery with pre- and post-delivery care in New York City’s priciest Manhattan zip code at between $12,380 and $24,666, depending on the specific care you need. But in Boise, Idaho, it’s only $4,180 to $16,269.

Note that those numbers don’t include prenatal or newborn care, which Fair Health Consumer shows comes in at several hundred (potentially close to $1,000) dollars per day, assuming there are no complications.

The Fair Health Consumer site can give you a ballpark idea of how much you’ll pay if you search based on your specific location.

Skin-to-skin contact is another aspect of the birth experience that might incur a charge. Although it may seem silly, after a surgical birth, the mother may be unable to safely hold her baby, making it necessary to have an additional nurse on hand to assist her.

Most hospitals allow parents and babies to have skin-to-skin contact as a matter of routine, but it never hurts to ask. It’s unclear what the average cost is, but the charge that went viral was $40. 

Postpartum Care After a Hospital Birth

If you’ve chosen a hospital birth, you should have plenty of help in the realm of postpartum care. Most hospital birthing packages include at least one follow-up visit soon after the baby is born. You should take the baby to a pediatrician for their follow-ups, which is an entirely separate charge.

If you experience a high-stress birth, such as having emergency surgery, you will need greater care in the following days and weeks. It may be as simple as family members assisting you after the cesarean procedure so you don’t overexert yourself. But it could be something more costly. 

Even if the delivery went smoothly, your OB-GYN will screen you for potential post-birth issues, such as postpartum depression. Postpartum depression could lead to serious expenses. Insurance should cover much of the cost of treatment, but if you’re uninsured, the rates can rack up fast.

In most areas of the country, one session with a psychologist runs between $100 and $200. It’ll cost even more if you need to see a psychiatrist (a medical doctor who can diagnose and treat mental disorders and prescribe medication). Rates per session are similar to a psychologist’s, but an initial visit could be $300 to $500.

Postpartum care may also include physical therapy and pelvic rehabilitation to help restore pelvic floor muscles. The cost for these can vary by location, but expect to pay between $150 and $400 per 45- to 90-minute session.

Many mothers also seek lactation assistance. It can save money in the long run if your baby breastfeeds instead of needing formula, so the investment in a consultation (around $200 per hour) can be well worth it. 

But you might get plenty of lactation help through your hospital as well. Some offer one or more free sessions initially and quite reasonable follow-up visits. For example, Baptist Health of Lexington, Kentucky, offers one free lactation consultation and follow-up visits for $25. 

And you have the same free or low-cost options as you would for a home birth, including the La Leche League, WIC breastfeeding support, or your local health department. 


The Verdict: Should You Choose Home Birth or Hospital Birth?

Overall, home birth costs are typically lower than those of hospital births. But the decision-making process isn’t as simple as looking at the numbers. 

It doesn’t help when you consider that hospitals negotiate rates based on factors like a patient’s insurance, whether you pay in cash, or whether you’re out of network. It’s tough to know the “official” cost of childbirth.

But there are things you can consider to help you make the decision.

A Home Birth Makes Financial Sense If…

Finances shouldn’t be the only reason you choose a home birth. But they can play a significant role in your decision. A home birth makes financial sense if:

  • You Need to Save Money. Home births are often cheaper. But if possible, don’t allow money to be the sole deciding factor in your birth plan. You must also consider your and your baby’s health and safety and your personal preferences. 
  • You Don’t Have Any Health Risk Factors. If you don’t have underlying risk factors like obesity or diabetes that could put you or your baby in danger, a home birth is less likely to result in emergency hospital expenses. 
  • You Have a Solid Backup Plan. Even if you don’t have risk factors, you need to prepare for an emergency hospital trip. That means setting up an emergency fund. If you don’t use it, you can spend it on the baby or set up a college fund.
  • You Live Near a Hospital. Don’t plan for a home birth unless you can get to a hospital quickly if something goes wrong during delivery. Emergency care will probably be more expensive than a hospital package, especially if you have to be air-lifted.
  • You Have a Trusted Midwife and Amazing Support Team. A doula or midwife with solid credentials (ideally a certified nurse-midwife) can save you money by providing similar care for less money, working with (not against) your medical team, and calling for medical intervention as early as necessary.
  • Your Insurance Covers Home Births. If your insurance covers home births, crunch the numbers to determine how much it can save you. While home births are already cheaper than hospital births, insurance can make it even cheaper.
  • You Don’t Have Insurance. If you’re uninsured, a home birth can save you a ton if you’re healthy. But it’s still a gamble. Complications could land you in the hospital anyway. It may be better to see if you qualify for open enrollment or wait until you do to try to become pregnant.

A Hospital Birth Makes Financial Sense If…

There are some circumstances in which a hospital birth is the best choice. In fact, medical professionals overwhelmingly recommend hospital births. Regardless of the cost, you should have your baby in a hospital or birthing center in the following situations. 

  • You Prefer the Greatest Level of Access to Medical Care. Opting for a hospital birth means having licensed OB-GYNs available on-site and top treatment and surgical options. Many things can impact labor and delivery, and the hospital can provide access to a C-section and pain medication as needed.   
  • Your Insurance Has Better Hospital Birth Coverage. Insurance can make hospital birth competitive with home birth. And you can always have a midwife or doula with you in the delivery room. 
  • You Have Contraindications to Home Births. If you have risk factors like diabetes or obesity, are carrying multiples, have had a prior cesarean delivery, or there are any issues with the fetus, plan a hospital birth. Home birth won’t save you money if you have to go to the hospital anyway, and it’s safer to be there from the beginning.

Both Make Financial Sense If…

Both home and hospital birth can be a high-quality childbirth experience as long as you have top-notch care. Choose the one that makes the most sense to you in these situations.  

  • You Have a High Income. If your household income is high enough that the cost difference between a home and hospital birth doesn’t matter, go with your preference. 
  • Cost Is Equal in Both Situations. Some people will find that the financial cost of using a midwife to facilitate a home birth is quite comparable to that of a hospital birth. If the cost is similar for both options, go with your personal preference. 
  • You Want the Best of Both Worlds. A hybrid approach in which you do much of the laboring process at home and then move to the hospital as labor progresses may lessen the amount of time spent in the hospital since early labor can be quite a long ordeal. 

Final Word

The choice between home birth and hospital birth isn’t purely a financial issue. 

A home birth has other distinct advantages: the potential for greater freedom in choosing your birth plan, a more intimate experience, and a more comfortable environment in which to bring your baby into the world. 

If you’re underinsured and worried about the costs of a hospital birth, in some situations, a home birth can be a safe alternative, especially if you’re healthy and build your emergency fund to cover unexpected hospital expenses. 

On the other hand, hospital births are safer, and infant mortality is much lower. You have access to more advanced care and licensed physicians, which can bring immense peace of mind during what can be a very uncertain and emotional few days. And insurance coverage can help lower hospital costs, even if you need a C-section.

Overall, the decision is an important and personal one. Examine your insurance coverage to help you evaluate the options and choose the right birth plan for your family.

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GME is so 2021. Fine art is forever. And its 5-year returns are a heck of a lot better than this week’s meme stock. Invest in something real. Invest with Masterworks.

Kate Underwood is a former high school French and English teacher who has turned her obsession with personal finance into a career. Her work is featured at Money Crashers and elsewhere on the web, covering side hustles, debt payoff, investing strategies, and more. She loves making finance more accessible to everyone. In her free time, she loves to hike and hang out with her husband and kids.

Source: moneycrashers.com

Dear Penny: Can My Deadbeat Son Fight My Decision to Disinherit Him?

Dear Penny,

I am 73 and have one son who is unmarried and lives in the same town. I also have five siblings. I am very close to my youngest sister who is on disability. I paid my home off two years ago, and I have some 401(k) savings. 

I am planning on leaving my home and all of my 401(k) and savings accounts to my sister. I owe no money to anyone. I have a $10,000 life insurance policy I put in my son’s name. 

I know he will be upset, but he has been stealing from me for years as he did with his dad when he was living. He has a set of master keys and gets in even after I’ve changed my locks and also stole my extra car key! Can he fight my decision in court to get the money and house after I pass on?

-L.

Dear L.,

I can’t promise you that your son won’t fight your decisions in court. But it’s actually quite difficult to win such a challenge. Still, there are a few things you can do to make it even harder for your son to successfully contest your final wishes.

Your son probably has standing to contest your will and beneficiary designations. That doesn’t mean he’d actually win — it just means he’d have the right to make the case. In many states, any close relatives who would automatically stand to inherit assets from someone if they died with no will can mount a challenge, as can anyone named in a previous version of the will.


Winning is much more difficult. Your son would probably have to prove that you lacked mental capacity or were under improper influence when you made your estate plan. Or he’d have to prove that the relevant documents weren’t signed in accordance with your state law. He doesn’t have a right to an inheritance just because he feels entitled to one.

One way to avoid a court dispute is to keep as many assets out of probate as possible. Retirement accounts, like your 401(k), pass directly to whomever you name as your beneficiary. So as long as your sister is listed, that money will avoid probate and go directly to her.

You can also make your bank accounts payable on death to your sister so they can bypass probate as well. It’s a little more complex when you’re dealing with your home. One option to explore is putting your home in a revocable trust and making your sister the beneficiary. You could also use a revocable trust to pass personal property, like your car, furniture and any valuables, to your sister.

It’s still possible for your son to contest your beneficiary designations, but it’s harder to do. Unlike probated property, assets that pass through beneficiary designation won’t become part of the public record. Your son obviously knows you have a home and would be able to see that it was transferred to your sister through property records. But he wouldn’t know what retirement and bank accounts exist since the details would be private.

Assuming you have a will, you may want to revise it to explicitly state that you don’t want your son to receive anything beyond the life insurance money. Attorneys often recommend taking this step in case the disinherited person tries to claim they were accidentally left out of the will.

It’s essential to name a contingent beneficiary, who will receive your property if your sister dies before you do. Assets that typically avoid probate will be distributed by a court if there’s no living beneficiary. In that event, it’s quite possible your son would inherit your home or money. If you aren’t close with your other siblings or family members, you could name a close friend or charity.

Hiring an attorney to review your estate plan is worthwhile here, given your concerns that your son may try to fight. But since your sister is on disability, you should also discuss how an inheritance will affect her finances. An inheritance wouldn’t jeopardize her disability payments, but it could put certain other benefits, like Medicaid, at risk.

I’d also suggest investing money in a home security professional who can help you equip your house and car against your son’s future break-ins. The fact that he has such easy access makes me worry for your safety.

The odds of your son clawing money out of your estate are pretty slim. If your estate is relatively small, it may not even be worth it for him to fight, given the substantial costs involved. But for peace of mind, consult with an attorney to be sure your estate plan is as airtight as possible.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].

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Source: thepennyhoarder.com

How Much Does It Cost to Adopt a Child?

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Additional Resources

Adoption is a life-changing journey. Whether the choice to adopt comes after years of expensive infertility treatments or is a route you’ve always wanted to take, the choice to welcome a new family member is rarely a financial one, but rather a decision of the heart.

But at some point, prospective adoptive parents have to consider the costs. It’s unlikely your decision to adopt will boil down to numbers. But it helps to know what to expect. 

The figures can vary depending on your adoption journey, from almost nothing to upward of $70,000. But you can use them as a baseline to help you financially prepare for starting a family and to make an informed decision about which type of adoption makes the most sense for you.


How Much Does It Cost to Adopt a Child?

There are three basic types of adoption: domestic infant adoption (sometimes called private adoption), international adoption, and public adoption. 


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But if you’re looking to adopt a baby, private and international adoption are the only two real options. Because of the way the foster care system operates, it’s exceedingly rare to be able to adopt an infant through public adoption. Their primary goal is reunifying families whenever possible, which can take years.     

But regardless of your adopted child’s age, some costs are common to all three, such as the expense of a home study, which involves visits by a social worker and background and financial checks. Other costs are unique to the adoption route you choose, such as the travel expenses involved with international adoption.

And the costs vary wildly, so it’s crucial you understand the ins and outs of each adoption type.


Domestic Infant Adoption

When adopting a baby in the United States, you have two options: adopting through an agency or independent adoption.

Costs of Adopting an Infant Through an Agency: $25,000 – $70,000 

Adopting through an agency is more expensive, but there’s also a higher success rate. Also, some agencies offer a sliding scale for those who need help affording adoption, which can potentially save you a few thousand dollars, depending on your income. However, each state has its own laws that regulate adoption fees, including sliding scale fee structures. 

Average Costs of Domestic Agency Adoption

Agency Fees $15,000 – $45,000
Legal Fees $2,500 – $6,000
Birth Mother Expenses $4,000 – $16,250
Home Study Fee $2,750

Adoption agencies are typically full-service operations. Thus, their fees generally include everything involved in the adoption process, which can be complex. The journey to bring a child home involves many parties, including attorneys, social workers, physicians, counselors, government administrators, and adoption specialists. 

There are also costs associated with matching birth parents and adoptive parents. For example, there are advertising expenses to find expectant mothers. And then there are medical expenses and court costs to ensure the health of the mother and child during pregnancy as well as the safety and security of the child after placement.

When you adopt through an agency, it typically completes the entire process from beginning to end, hence the expense. 

Adoption agencies that charge more include more services. For example, if you find an agency with fees at the lower end, it’s likely because their fee doesn’t include the costs of hiring an attorney, unlimited advertising for birth parents, certain birth mother expenses, or adoption disruption insurance (a guarantee you won’t lose your money if the birth mother changes her mind).

So always ask for a written, line-by-line breakdown of the agency’s costs to see what services its rate covers before signing with it. 

Costs of an Independent Adoption With an Attorney Only:  $10,000 – $40,000

If agency adoption is too expensive but you’d still like to adopt a newborn, you can save a lot of money by hiring an attorney to facilitate an independent adoption. Independent adoption happens when prospective parents locate a birth parent on their own and use an attorney to process the necessary paperwork.

Average Costs of Independent (Attorney) Adoption

Legal Fees $3,000 – $6,000
Advertising Fees $0 – $1,000
Birth Mother Expenses $6,000 – $30,000
Home Study Fee $1,000 – $4,000

The cost of an independent adoption can range from $10,000 to $40,000, though it could go higher based on your circumstances. The final bill depends on how much you need to spend to find an expectant mother and how much you pay for medical and living expenses, which may be regulated by state law. 

Further, adopting independently is a bit like trying to sell a house without a realtor. You must find a birth mom on your own, which means advertising for and vetting birth moms without help. 

So, while it can be cheaper, you still have to go it alone. And if you have trouble finding a birth mother, your costs can quickly add up. Agencies give a flat rate no matter how much advertising it takes. If you have trouble finding someone, you could quickly blow past the $40,000 mark.

Another reason independent adoption costs can vary more widely than those through a private agency is because in most states, adoptive parents won’t have their costs reimbursed if a birth mother changes her mind, what’s commonly called a disrupted adoption. Most adoption agencies build disruption insurance into their fee structures. 


International Adoption: $26,500 – $73,000

Those unfamiliar with the adoption process often believe it’s less expensive to adopt a child from another country. But the reverse is more often true. 

Average Costs of International Adoption

Agency Fees $15,000 – $30,000
Legal Fees $500 – $6,000
Immigration Application Fee $1,000 – $2,000
Dossier Preparation and Clearance $1,000 – 2,000
Home Study Fee $1,000 – $4,000
In-Country Adoption Expenses $2,000 – $10,000
Travel Expenses $5,000 – $15,000
Child’s Passport, Visa, Medical Exam $1,000 – $4,000

The cost of an international adoption can range from just over $20,000 to more than $70,000. The wide variance is due to the different requirements of each country. 

International adoption (also called intercountry adoption) has some similarities to domestic adoption. But it has its own unique steps and expenses that can quickly escalate beyond the cost of domestic adoption.

The costs of international adoptions can include immigration processing and court costs (both in the foreign country and the U.S.), travel expenses, foreign and domestic legal fees, foreign agency fees, passport and visa fees, medical examinations, and in-country adoptions expenses (such as foster care for the child, donations to the orphanage, and payments for the in-country adoption liaisons).

The costs also depend on whether a government or private agency, orphanage, nonprofit organization, attorney, or a combination of entities is managing the adoption. 

Additionally, some international adoptions are finalized in the child’s country of origin, while others must be finalized in the U.S., depending on the laws of your state, further adding to the total cost. And depending on the country’s regulations, you may have to plan an extended stay, which means time off work and (potentially) lost wages.


Public Adoption: $0 – $2,500

The least expensive route to growing your family is unquestionably public adoption, or adopting through the foster care system. It’s very difficult to adopt a baby, though. So this option is best for those who wish to adopt an older child.

Public adoption costs next to nothing because the government subsidizes many associated fees and expenses. 

Average Costs of Public Adoption

Agency Fees Usually $0
Legal Fees $0 – $2,000
Home Study Fee $0 – $500

Federal and state financial adoption assistance programs exist to encourage the adoption of children with special needs that make them difficult to place, such as older children, sibling groups, or those with physical or mental disabilities. 

Thus, most prospective parents who are adopting through public agencies will find their state is often willing to waive most or all of the fees associated with adopting through the foster care system, including both the home study fee and attorney fees. 

Additionally, if you become a foster parent and apply to foster-to-adopt, the government subsidizes some of your future adopted child’s living expenses while you await finalization. 

But if you have your heart set on adopting a newborn, foster care adoption isn’t the route for you. It’s nearly impossible to adopt an infant that way. 

Some babies in the foster care system were abandoned by their biological parents or taken by the state due to abuse, neglect, or drug addiction. But no child in the system — infant or otherwise — is immediately available for adoption. 

The state’s No. 1 priority is to reunite children with their biological families. That includes extensive sessions with counselors and social workers. If that effort ultimately proves unsuccessful, the state next tries to place the child with a biological relative. 

Only after these efforts — which could take several years — are children placed for adoption. Thus, by the time babies in foster care become eligible for adoption, they’re no longer babies. But if they were placed with a foster family, that family gets the first chance at adoption. 
However, if you’re interested in adopting an older child and are prepared to help them work through the trauma, the rewards can be immense. My parents adopted my little brother from foster care at the age of 6, and his presence has enriched our family in myriad ways.

Happy Family Son Saving Money In Piggy Bank Budgeting Teaching Saving

Factors That Influence Adoption Costs

Every adoption is unique, and though adoption agencies typically try to work within your budget, unforeseen costs can occasionally raise the base projected cost. And that can have a significant impact on your overall family budget.


Birth Mother Expenses

Depending on your state’s adoption laws, a birth mother may be eligible for coverage of certain expenses. You may have to pay medical expenses related to the pregnancy, including insurance coverage if she’s not already covered or eligible for Medicaid.

If you work with an agency, they should take care of helping her find coverage. But you may still be responsible for some medical expenses, such as doctor copays. Once you’re matched with a birth mother, her medical expenses become your medical expenses. 

Adoption agencies typically work these into their overall fee structure but allow for variances that could affect your cost. For example, you may pay more or less depending on what stage of pregnancy the mother’s in when the agency matches you. If you’re matched in the ninth month, there will be fewer expenses.

And if you’re adopting independently, some or all of the medical costs the birth mother incurs as a result of the pregnancy may be your responsibility as defined by the laws of your state. Consult with an adoption lawyer for more information.  

Additionally, in some states, you may need to cover other birth mother expenses. Birth mother expenses are court-approved funds adoptive families provide to help prospective birth mothers with pregnancy-related expenses. In addition to medical care, costs could include living expenses like maternity clothing, groceries, rent, and transportation. 

Some states that allow birth mothers to request living expenses cap the total amount. For example, Ohio caps the amount birth mothers can be reimbursed for living expenses at $3,000 and Connecticut at $1,500. Other states have no cap but permit a judge to set one on an individual basis. 

Thus, these expenses can vary widely from one adoption to another.


Advertising

The longer you have to wait for a birth mother match, the more money an agency must pay toward advertising to find you one. Ask the adoption agency how they deal with this variable cost. Some charge one flat fee regardless of the amount of advertising required; others set a variable cost.

And if you’re doing an independent adoption, you’ll be covering this expense on your own. If you don’t already know a birth mother to adopt from, you’ll need to find one. That means drawing on your personal connections, using social networks or community organizations, utilizing adoptive family websites, posting print ads, or seeking referrals from adoption attorneys. 

It could take a long time to find a birth mother if you don’t have extensive networking options. And that can substantially drive up your adoption costs. Depending on how long it takes you to find someone, fees for print and online advertising can range from several hundred dollars to tens of thousands. 


Attorney Fees

Lawyers are necessary for dealing with the legal aspects of any adoption. These include the original consent to adoption and termination of parental rights as well as the court proceedings to finalize the arrangement. 

However, the fees can vary considerably based on the type of adoption you opt for. Attorney fees can also vary depending on other factors, including:

  • The Complexity of the Case. Will they need to represent you multiple times in court? All adoptions must eventually be finalized before a judge. But some adoptions — such as international adoptions or those in which birth mother expenses must be court-ordered — could require more paperwork or court appearances than others.
  • The Number of Hours the Attorney Works on the Case. Lawyers charge by the hour. Even if you don’t have to appear in court more than once, adoption can involve a lot of paperwork.
  • The Number of Additional Attorneys or Support Staff Needed. Depending on the complexity of your case or who you hire, you may be represented by a law firm rather than a single attorney. Additionally, your lawyer may use a support team to fulfill basic tasks like clerical work.

Depending on your case, rates are often negotiable. And while attorneys often charge by the hour, many offer a flat fee for certain types of cases. 

For example, a family law attorney might charge a flat fee for a straightforward adoption case that requires a simple filing of paperwork and one court appearance. But they might charge by the hour for a more complex case, such as an international adoption.

Regardless, most lawyers offer payment options so clients can find an arrangement that works for their budget. And all lawyers have fee agreements informing clients of costs upfront. So ensure you thoroughly read the agreement beforehand. 


Time Off

Unfortunately, in the U.S., paid parental leave isn’t guaranteed by law, and many workplaces don’t have this benefit. Even when they do, it may not apply to adoptive parents. So check with your human resources department about whether your workplace offers adoption benefits. 

Whether your employer offers paid time off, all adoptive parents are entitled to up to 12 weeks (three months) of leave through the Family Medical Leave Act. The act equally guarantees maternity and paternity leave for biological and adoptive parents.

But it only guarantees your job and health insurance. It doesn’t guarantee paid time off. If your company doesn’t provide paid parental leave, you need to plan for lost wages.


Final Word

The costs of adoption may feel formidable, especially if you have your heart set on adopting an infant through domestic or international adoption. But they don’t have to be insurmountable.

Many resources are available to help families afford to adopt, including options for post-placement reimbursement, like the adoption tax credit. Talk with adoption professionals to explore your options before completely ruling it out. 

Also, talk with other families who’ve adopted. Many are happy to share stories of how they were able to afford adoption, especially if it helps others fulfill their dreams of a family.

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Sarah Graves, Ph.D. is a freelance writer specializing in personal finance, parenting, education, and creative entrepreneurship. She’s also a college instructor of English and humanities. When not busy writing or teaching her students the proper use of a semicolon, you can find her hanging out with her awesome husband and adorable son watching way too many superhero movies.

Source: moneycrashers.com

How to Negotiate Medical Bills: A Step-by-Step Guide

The hospital bill arrives in the mail, and you’re tempted to throw it away (again) without opening it. After all, you don’t have the money to pay for that trip you took to the emergency room.

Ignoring medical bills isn’t going to make them go away, and the longer you wait — much like the cough that turned into pneumonia — the worse it’s going to get. But there is some good news: You can negotiate medical bills so that you pay a fraction of the amount you were charged.

It’s probably of small comfort, but you’re not the only one facing steep medical costs. In 2019, a quarter of adults skipped medical care, such as a visit to a doctor or dentist, because they couldn’t afford it, according to a Federal Reserve 2020 report. And 18% of those respondents had unpaid medical debt of their own or from a family member.

Those expenses aren’t limited to the uninsured — with co-pays and deductibles reaching four-figures, even people with insurance can face medical bills they can’t afford.

Craig Antico and Robert Goff, authors of the book “End Medical Debt: Curing America’s $1 Trillion Unpayable Healthcare Debt,” spoke with The Penny Hoarder about how to negotiate medical bills you can’t afford and how to pay them off before they do more harm to your finances.

How to Negotiate Medical Bills That You Can’t Afford

As hard as it may be to believe, healthcare institutions aren’t out to intimidate you and take all your money. At least, not in the beginning. And almost all of them will accept less than the full amount owed.

“If you say something up front, you can generally work out an arrangement at a lower rate,” Goff said. “If you don’t, then the full maximum amount is pursued — and it’s pursued aggressively.”

As many as 80% of medical bills contain errors, so you should make correcting billing errors your first priority. Then follow these step-by-step strategies.

1. Stop Procrastinating

First of all, you need to open the envelope. Seriously. We understand that it’s easy to get overwhelmed after a medical crisis, but the clock is already working against you.

Even if you walked out of the hospital without speaking to someone about your financial situation, you still have a window of time during which you can plead your case, according to Antico, co-founder of the national charity R.I.P Medical Debt.

“They’ve got about three or four months to talk to the hospital,” he said. “As soon as they get a bill from the hospital, a light has to go on that I must read this bill, as hard as it’s going to be.”

First, understand if this is a bill from your health provider or health insurance company. Health insurance companies may send scary-looking statements that indicate how much they paid and how much is still owed, but that amount is not necessarily how much you have to pay.

It’s best to reach out to your healthcare provider and ask them how much you still owe. You can also request an itemized bill. If you still don’t understand what you’re looking at, make them explain each charge in detail — you have the right to demand to know what you’re paying for.

2. Ask for Help (the Earlier the Better)

You’ll have a greater chance of obtaining financial assistance if you ask earlier rather than later — especially if you’re already struggling financially. If you owe a hospital money, check its website for its financial assistance policy to find out if you qualify for a discount or charity care.

Pro Tip

If you make less than the federal poverty level, ask your hospital about its charity care program, which covers the cost of healthcare for low-income patients.

“They can switch a bill from being billed to charity care within the first 90 days,” Antico said. “Even if you make more than two to three times the poverty level, they’ll give you a discount.”

3. Calculate What You Can Afford

Setting a goal to pay off medical bills rather than avoiding them is the best way to help your financial situation long-term.

But when facing a bill — or pile of bills — that seems insurmountable, it’s easy to panic and whip out your credit card to make it all go away. That’s a big mistake, since there are alternatives to handling medical debt that don’t involve the double-digit interest rates that credit cards charge.

Instead, plan your payoff in a responsible way by determining how much you can afford to pay.

“There’s a rule of thumb that I have: Only pay about 3% of your gross income toward these bills,” said Antico, who added that if you live with your parents rent-free or don’t have a car payment or insurance, you can bump up that amount to as much as 15%.

Your gross pay is your pre-tax and pre-deduction income. It includes your regular hourly or salaried pay plus any overtime.

Medical debt doesn’t accrue interest, so making hefty payments beyond your means can leave you in more dire circumstances than if you paid off other debts you owe — like those pesky credit card balances. If you don’t have one already, it’s a better idea to put at least some of that money toward starting an emergency fund.

However, deciding how much your budget can handle is essential before you call your medical provider.

4. Talk to Your Provider (or Debt Collector)

Most medical providers are willing to work with a patient who can’t afford their services — even after the services have been rendered.

So once you’ve reviewed your bill and know how much you can afford to pay, it’s time to call your provider. Typically, you’ll need to speak to an office manager at the doctor’s office or the billing department at a hospital.

Pro Tip

Even if you have multiple medical bills, avoid the temptation of a consolidation loan for the convenience of a single payment. Remember: Medical debt usually doesn’t accrue interest, but a loan will.

Speaking with a human being is the best way to present your case, whether it’s explaining you didn’t pay because the bill got lost in a move or proposing that you pay a portion of the bill in cash to have the rest of the debt forgiven.

After all, it’s in the provider’s financial interest to talk to you rather than turning over your bill to collections and potentially losing even more money.

Even if you’ve heard from a debt collection agency, there is still hope to negotiate with the provider. The collection agency at that point is working on behalf of the provider, who may be willing to make a deal with you.

“I would start by going back to the originating provider — not dealing with the bill collector,” Goff said. “If the provider can’t or won’t negotiate, then ask the bill collector if you can settle the bill for a lesser amount.”

Two people set up a payment plan.
Getty Images

5. Set Up a Payment Plan

If you’re not in a position to make a huge cash outlay to erase your medical debt, ask your provider about potential payment plan options.

Working directly with the provider to arrange a payment schedule is definitely in your best, ahem, interest.

“If you make a payment plan with a hospital, they don’t charge you interest — you just pay the principal amount that you owe the next two, three, four, five years,” Antico said. “And they’ll take almost any payment plan that someone wants to pay.”

In exchange for reliably getting paid on time, your provider might also agree to a further discount if you offer to put your installments on automatic payments.

6. Learn From Your Mistakes

Just because you’re in debt doesn’t mean it always has to be that way. You can learn from your mistakes and not put yourself further in debt.

Before your next trip to a medical provider, find out if you qualify for Medicaid or charity care — up to one-third of U.S. residents qualify for charity care, according to Antico.

If you do have health insurance, understanding your health benefit plan is essential to preventing unwanted surprises. That includes finding out what services you might not realize are covered.

“We’re actually seeing people avoid going for preventative services, although it’s not even subject to even a copay or a deductible,” Goff said. “You’re losing out on the benefit, including an opportunity to avoid greater illness.”

More than anything, both Goff and Antico stressed that early action can make the difference between paying off medical bills and sinking into financial ruin.

“When a patient doesn’t pay attention and goes anywhere, does anything, and then wakes up to, ‘Oh my god, I have all these bills and they’re not going to be covered,’ they’re already behind the eight ball,” Goff said. “If you’re going to run into an economic problem, say something early to your physician.”

After all, it’s easier to feel better when you have the remedy for your financial health, too.

Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.

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Source: thepennyhoarder.com

Everything You Need to Know About a Reverse Mortgage: Pros and Cons

Reverse mortgages can help older homeowners free up cash in retirement by borrowing against the value of their home.

It can help retirees age in place while producing a stream of income for everyday expenses.

But reverse mortgages are complex and controversial. Strict rules must be followed to avoid foreclosure, and the costs can outweigh the benefits.

If you’re considering a reverse mortgage for yourself or someone you know, it’s important to understand the advantages and disadvantages involved.

In this guide, we break down everything you need to know about how reverse mortgages work and who can benefit from this type of loan.

What Is a Reverse Mortgage?

A reverse mortgage is a type of loan that allows property owners ages 62 and older to convert home equity into cash.

Unlike a regular mortgage, you don’t need to make monthly loan payments. Instead, your lender pays you, and your debt increases over time.

The loan is settled or repaid when you sell the home, move out or die.

According to The Brookings Institute, the average maximum claim amount on reverse mortgages is about $275,000, and the average borrower age is 73.

Types of Reverse Mortgages

There are three types of reverse mortgages.

Home Equity Conversion Mortgages

These are the most common type of reverse mortgage loan and are only available to homeowners ages 62 and older.

HECM loans are backed by the Federal Housing Administration (FHA), and must meet strict rules and lending standards.

HECM loans are non-recourse loans. This means you’ll never owe more than what your house is worth — even if its market value drops.

Private (Proprietary) Reverse Mortgages

These reverse mortgages are much riskier because they are not insured by the federal government. They’re typically designed for borrowers with higher home values.

Single-Purpose Reverse Mortgages

These loans are offered by some state and local governments and nonprofit agencies to help homeowners fund a specific need, such as home improvements or property taxes.

These loans aren’t available in all areas and only homeowners with low to moderate incomes may qualify.

Reverse Mortgage Process: How Does It Work?

If you’ve built considerable equity in your primary residence (usually at least 50% of the property’s value), you can work with a reverse mortgage counselor to find a lender and a program that meets your needs.

Remember: You must attend a HUD counseling session administered by an approved counseling agency to qualify for a HECM loan.

Next, the counselor would tell you how to apply for a loan through a specific program.

The lender will perform a credit check and review your property (including the title and appraised value).

Your home needs to be in good shape to qualify for a reverse mortgage. If it doesn’t meet certain property standards, the mortgage lender may require that certain repairs be made before approving a reverse mortgage loan.

If everything checks out and you’re approved, the lender funds the loan.

Like a regular mortgage, a reverse mortgage can have either a fixed rate or an adjustable interest rate.

Pro Tip

Reverse mortgages tend to have higher interest rates than traditional mortgages. 

A woman looks out the window of her home while sipping coffee.
Getty Images

Reverse Mortgage Cost and Fees

Reverse mortgage fees can be substantial.

These costs include:

  • Mortgage insurance premium
  • Origination fee
  • Servicing fee
  • Interest on the loan
  • Third-party charges

Interest and fees are added to the loan balance each month. Unlike a regular mortgage, the amount you owe on a reverse mortgage increases over time.

This means you’ll get charged interest and fees on top of the interest and fees that were added to your previous month’s loan balance.

But remember: You don’t need to repay the loan until you move out, sell the home or pass away.

Receiving Reverse Mortgage Proceeds

How much money you receive from a reverse mortgage depends on your age, the interest rate on your loan and the value of your home.

Loan proceeds can pay out in one of the following ways:

  • A lump sum.
  • A line of credit.
  • Yearly, quarterly or monthly payments.

You choose how funds are paid out. Most reverse mortgages are processed within 30 to 60 days.

If your home isn’t fully paid off, reverse mortgage funds must be used to pay off the existing mortgage.

Repaying a Reverse Mortgage

You can choose to make payments on the loan to reduce your debt — but it’s not required. You don’t need to make monthly mortgage payments like you would with a traditional mortgage.

You’re still required to pay homeowners insurance, property taxes and HOA fees. Otherwise, you can face default or even foreclosure.

Many reverse mortgage loans aren’t repaid by the borrower. Instead, when the borrower dies, the borrower’s heirs repay the loan or sell the home to satisfy the debt.

The borrower (or their estate) gets any leftover money from the sale after the loan is paid.

Reverse Mortgage Pros and Cons

Taking out a reverse mortgage can help older people age at home. But it comes with costs and risks.

It’s important to understand both the benefits and disadvantages of a reverse mortgage before you sign on the dotted line.

You should consider all of your borrowing and housing options —  including a home equity loan, refinancing or downsizing — before you get a reverse mortgage.

An elder law attorney or financial advisor can also help you explore these options.

Reverse Mortgage Pros

Here are some advantages to getting a reverse mortgage.

You Get To Stay In Your Home

You get to keep the title to your property, and stay in a familiar place. You can use proceeds from the loan to pay for home improvements and other needs.

The home loan balance isn’t due until you move out, sell the property or pass away.

The Money You Receive Isn’t Taxable

The Internal Revenue Service (IRS) doesn’t consider money from a reverse mortgage income. Instead, it’s categorized as a loan advance, which means you receive the money tax-free.

This is unlike other retirement income, such as distributions from a 401(k) or IRA.

It Can Help Fund Your Retirement

Unexpected financial shocks are common in retirement. Reverse mortgages were originally designed for older homeowners on a fixed income who struggle to cover living expenses but who have a lot of wealth built up in their homes.

These seniors are often referred to as “house-rich and cash-poor.”

If an unexpected job loss, health issues or death of a spouse leaves you with limited savings, monthly payments from a reverse mortgage can help supplement your retirement income.

Reverse mortgages can also help pay off debts. For example, you can use funds to pay off an existing mortgage if the balance is low.

Reverse mortgages aren’t a perfect solution for retirement money problems, though. It’s possible to default on the loan and lose your home to foreclosure if you don’t meet certain requirements.

Different Payout Options

You can receive money from a reverse mortgage in a single lump sum, periodic payments or as a line of credit. The last option lets you tap reverse mortgage funds when you need them.

A Single-Purpose Reverse Mortgage Could Serve Your Needs

A single-purpose reverse mortgage is a special type of home loan generally offered by state agencies and nonprofit organizations.

This kind of reverse mortgage tends to offer lower fees and interest rates. Unlike HCEM loans — which can be used for any reason — a single-purpose reverse mortgage restricts how the funds are spent. For example, you may only be able to tap funds for home improvements or to pay property taxes.

A senior citizen looks stressed out while sitting at his kitchen table.
Getty Images

Cons of Reverse Mortgages

Violating the terms of your reverse mortgage agreement can result in foreclosure — and leave you on the street.

It’s critical to understand the disadvantages of reverse mortgages before you enter into an agreement with a lender.

A Reverse Mortgage Isn’t Free — Or Cheap

You’ll need to maintain homeowners insurance, taxes and HOA fees.

You also need to pay an upfront mortgage insurance premium at closing which can equal 2% of your home’s appraised value.

According to the Consumer Financial Protection Bureau, other closing costs can include an appraisal, title search, surveys, inspections, recording fees, mortgage taxes and credit checks.

You’ll also face origination fees when you sign up for a reverse mortgage. Origination fees are capped at $6,000 and vary based on your loan amount.

You can pay these closing costs and fees in cash or by using the money from your loan.

While you have the option of rolling these costs into your loan balance, you’ll end up receiving less money as a result.

Aside from these upfront costs, there are also ongoing expenses added to your loan balance each month.

This includes yearly mortgage insurance premiums equal to 0.5% of the outstanding mortgage balance. These insurance premiums are charged by the lender and are paid to the Federal Housing Administration.

Mortgage insurance premiums are paid in addition to your homeowners insurance.

You Could Lose Your Home to Foreclosure

Reverse mortgage lenders can foreclose on your home for several reasons.

The most common are:

  • You fail to pay property taxes, homeowners insurance, HOA fees and other costs associated with owning your home.
  • The home is no longer your primary residence (you don’t live there for at least six months out of the year).
  • You don’t keep up with repairs or maintain your home as required by your lender.

If you fall into one of these situations, you could default on the reverse mortgage and lose your home to foreclosure.

Your Heirs Probably Won’t Get The House

If you leave the house to your heirs, they will need to repay the total reverse mortgage balance or 95% of the home’s appraised value — whichever is less — to keep the property.

This leaves your heirs with the following options:

  • Pay out of pocket to cover the loan.
  • Get financing to pay off the loan.
  • Sell the home.
  • Turn the home over to the lenders to satisfy the debt.

Once the debt is satisfied, there may not be any equity left for your heirs.

Roommates and Family Could End Up On The Street

Any friends, non-spouse relatives or roommates who live with you will likely need to vacate the home after you die. The same applies if you leave the property for more than a year.

Non-borrowing spouses can remain in the home following the death of a reverse-mortgage holder. So can a surviving borrower listed on loan documents.

(Keep in mind no one living with you under the age of 62 can be a borrower on a reverse mortgage.)

It Could Affect Your Medicaid And Other Benefits

A reverse mortgage can impact your eligibility for government need-based programs.

The money you receive from the loan can cause you to violate asset restrictions for Medicaid and Supplemental Security Income (SSI).

This is more likely to happen to reverse mortgage borrowers who receive the loan as a lump sum and don’t spend the money down after 30 days.

If you’re currently enrolled in one of these government programs, it’s best to speak with a social worker, benefits specialist or elder law attorney before getting a reverse mortgage.

Reverse Mortgage FAQs

Who Qualifies for a Reverse Mortgage?

To qualify for a Home Equity Conversion Mortgage, you must be at least 62 years old and a homeowner. 

Here are other requirements you must meet to qualify for a federally-backed reverse mortgage:

  • Your home must be your principal residence.
  • Your home must be in good condition. 
  • You must own your home outright or have a low mortgage balance. 
  • You need to have the financial resources to keep up with property taxes, insurance premiums and HOA fees. 
  • You can’t be delinquent on any federal debt, including federal income taxes and federal student loans. 
  • You must undergo counseling from a HUD-approved reverse mortgage counseling agency.

Who Is a Good Fit For a Reverse Mortgage?

A reverse mortgage is best for older Americans who plan to age in place at their current home until they pass away. 

While it can free up income for retirement, this type of loan is best for people who can afford other financial obligations, such as homeowners insurance and yearly property taxes. 

It’s also suitable for people who don’t want to pass down their home to their children or other family members. 

When Is A Reverse Mortgage a Bad Idea?

Reverse mortgages aren’t a good idea if you already struggle to afford your property taxes, insurance payments and upkeep on your home. 

These expenses don’t go away when you get a reverse mortgage. You can set aside reverse mortgage funds to pay for these expenses, but that will reduce the amount of liquid cash available to pay other costs. 

Reverse mortgages are also a bad idea if you plan to move anytime soon. It doesn’t make sense to throw away thousands of dollars in home equity if you plan to sell your home in the next few years. 

If you decide to sell your home while you have a reverse mortgage, you must repay the entire loan you borrowed plus interest and fees. 

Finally, if your spouse isn’t at least 62, getting a reverse mortgage can be a bad idea. 

Federal laws protect your non-borrowing spouse from losing the home if you die first — but they can’t receive any additional mortgage proceeds after you pass away. Losing these monthly payments or line of credit could make it impossible for your spouse to make ends meet. 

Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.

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Source: thepennyhoarder.com