Many beneficiaries wonder if owning their home will affect their Medicare benefits. Medicare doesn’t limit enrollment based on resources or income. Unless the sale of your home is taxable income, your Medicare won’t be affected. If you sell your home for taxable income and make a hefty profit, there may be an increase in your Part B or Part D premiums.
Effects of owning a home with Medicare
Your home is a resource, and Medicare eligibility isn’t based on the appraisal of your home. Also, the state generally can’t take your home to recover Medicare debts.
Now, some people do deplete their liquid assets to qualify for Medicaid. Medicaid is a low-income medical program; since Medicare doesn’t cover Long-Term Care, people who need Long-Term Care try to spend down to meet the limits for Medicaid.
Under the Community Spouse Resource Allowance, married applicants can transfer larger sums of money to their spouse, and amounts vary by state.
The value of your home isn’t counted towards Medicaid eligibility if your spouse lives in the house and the home equity does not exceed a certain amount. Medicaid is not Medicare; Medicare is a federal program, whereas Medicaid is state-specific.
Effects of selling my home with Medicare
If there is an increase in your taxable income from selling your home, you may see a higher monthly Medicare premium.
Selling your home only affects your Medicare if the sale pushes your taxable income into the “high-income earner” threshold. But less than 5% of Medicare recipients fall into the “high-income” category.
If your modified adjusted gross income exceeds $91,000 per year as a single or $182,000 for married couples filing together, then Medicare considers you a high-income earner.
The higher premium amount is the Income Related Monthly Adjustment Amount (IRMAA) for Part B and Part D. The IRMAA bases its premiums on income tax earned two years ago.
If you owe the IRMAA, the Social Security Administration will notify you. In many cases, if you see an income reduction and disagree with their decision, you can file an appeal.
The Income Related Monthly Adjustment Amount is based on your income from two years prior.| Beneficiaries who file individual tax returns with modified adjusted gross income: | Beneficiaries who file joint tax returns with modified adjusted gross income: | Income-Related Monthly Adjustment Amount | Total Monthly Premium Amount in 2023 |
|---|---|---|---|
| $97,000 or less | $194,000 or less | $0.00 | $164.90 |
| $97,000 to $123,000 | $194,000 to $246,000 | $65.90 | $230.80 |
| $123,000 to $153,000 | $246,000 to $306,000 | $164.80 | $329.70 |
| $153,000 to $183,000 | $306,000 to $366,000 | $263.70 | $428.60 |
| $183,000 to $500,000 | $366,000 to $750,000 | $362.60 | $527.50 |
| $500,000 or above | $750,000 or above | $395.60 | $560.50 |
Medicare effects of owning a home FAQs
If I sell my house, will I lose Medicare?
You won’t lose your Medicare benefits from selling your home. But, if you move to a new address, you may need to change your supplemental Medicare plan.
Medicare is for those aged 65 or older and those qualifying for disability. The federal program is not income-based.
What happens if I sell my house while on Medicare?
Selling your home only affects Medicare Part B and Part B costs if the sale is taxable and the adjusted gross income exceeds Medicare limits. Otherwise, there is no effect on the cost of your Medicare.
The more you make in gross income, the higher the IRMAA. For example, someone in the first “high earner bracket” only pays $12.40 a month plus the cost of the Part D premium. Further, the Part B increase is only $68 more than the standard monthly Part B premium.
Do capital gains affect Medicare premiums?
Capital gains taxes may apply if you profit from investments, including real estate sales. But the IRS does allow a specific portion of real estate capital gains to be excluded. Singles may exclude up to $250,000, and married couples may exclude $500,000.
Be sure to talk to your accountant about when capital gains exclusions don’t apply. Also, confirm your taxable income to understand if you already fall in the “high-income” category.
How to find a new policy when you move into a new home
When moving to a new home, you may need to change your Medigap, Part D, or Medicare Advantage plan. A new zip code usually means different plan options.
If you’ve recently moved, you could qualify for a Special Enrollment Period that allows you to change your plan outside the Annual Enrollment Period.
Give us a call at the number above to discover your options today. Or fill out an online rate comparison form to see your options now.
