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Francis Said:

how does a reverse mortgage affect medicaid benefits?

We Answered:

Technically it's not income, so it shouldn't affect income based relief.

However, a reverse mortgage is set up to ensure the bank gets it's money back, so it's always a rotten deal for the home owner. Look, she's out of money now, getting a reverse mortgage will just make this worse.

Excessive fees to set it up.
Excessive interest rate.
Onerous terms--she must insure, pay the property taxes and maintain the property or they get the property.
Onerous terms--should she go temporarily to a nursing home, they get the house.

If the house is worth $150,000 and she sells it, she'll clear $140,000. Yes, she'd have to find an apartment for $1500 a month, but the $140,000 should pay for 93 months or 7 years.

If she keeps the house and gets a reverse mortgage, she'll only clear $50,000 to $70,000, will still have excessive housing expenses and will eventually lose the house anyway.