Since Medi-Cal is an asset-tested government program (i.e. California’s version of Medicaid), you should be very careful about how you take the reverse mortgage proceeds.

Getting a reverse mortgage in and of itself should not disqualify you from any income or asset based programs. However, if you take the proceeds as a lump sum and put that money in the bank, most programs will look at your high bank balance and come to the conclusion that you don’t need their assistance – regardless of the fact that the funds were borrowed.

If you take the reverse mortgage proceeds as a line of credit you should be OK with Medi-Cal. Just be sure to immediately spend any money you draw from the line of credit and don’t let it sit in your bank where it could be considered a countable asset. I am by no means an expert on Medi-Cal so you should consult an elder law attorney prior to getting a reverse mortgage to ensure that your eligibility is not affected.