March-April 2021

Securities and advisory services offered through Mutual of Omaha Investor Services, Inc. Member FINRA/SIPC. Danny Smith, representative. Daniels Financial Group and Mutual of Omaha Investor Services are not affiliated. Around 2007, when Hipp first started doing reverse mortgages, a client was losing his eyesight and took out a reverse mortgage to pay for surgery that saved his sight. “I don’t think we mention these types of cases enough for those looking for specialized treatments for cancer or other illnesses that they cannot afford,” Hipp says. Shelley Giordano, director of enterprise integration with Mutual of Omaha Mortgage, says members of her team pointed out to her that clients sometimes ask about reverse mortgages because of dental care, in-home care or paying for institutional care for one member of a cou- ple. One of Giordano’s team members also notes that the reverse mortgage is available to people without the need for medical underwriting, which would make it an attrac- tive option for some people. Future of Medicare As for the future of Medicare, the experts expect changes under a Biden Administration, but the details are far from being worked out. While President Joe Biden supports increasing Medicare eligibility require- ments, the costs could be high, so it becomes a matter of how to pay for an expansion. Workers currently pay 1.45 percent of their earnings to fund Medicare, and the employer matches that amount for a total of 2.9 percent. A premium of 0.9 percent must be paid on wages that exceed $200,000. But there is no wage base limit for Medicare, as there is with Social Security, so all covered wages are subject to the Medicare tax, accord- ing to IRS.gov. Steve Vernon, consulting research scholar at Stanford University’s Center on Longevity, supports dropping the eligibility age to 60. “Of course, there are big challenges in paying for that,” Vernon says. “But my general view is that having universal healthcare is a good goal, and Medicare is the only universal healthcare system we have.” Realistically, he adds, dropping the age to 60 might be more practical politically than universal healthcare, so any movement in the right direction would be good. “Ideally 60, but if 62 is all we can afford, let’s take that step. And that does jibe with when you can start taking Social Security, so there is some rationale for that,” Vernon says. Even before the pandemic, people often were forced into retirement earlier than they planned. “If you’re in your early 60s and you’re losing a job and you were intending to work several more years, healthcare is just crucial. We need to expand coverage.” The pandemic focused attention on issues that should help lower healthcare costs over time—primarily re-em- phasizing that a healthy lifestyle is important. “Survey after survey shows how good health is either No. 1 or No. 2 for enjoying your retirement, but then peo- ple don’t seem to get around to exercising and reducing stress and getting proper nutrition,” Vernon says. “I think the pandemic is really focusing a spotlight on the people who are most at risk. And I’m hoping that people will look at the pandemic and think, ‘Wow, now I really get it, and I need to improve my health.’ A lot of people knew they should be taking care of their health. Now, they really, really know.” REVERSE MORTGAGE / MARCH-APR I L 2021 27