Medicare vs. Medicaid: Which Pays for What?

Medicare vs. Medicaid:

Which Pays for What & How Do They Relate to Long Term Care?

Medicare and Medicaid are two government entitlement programs many Americans misunderstand or misinterpret, especially as they relate to skilled nursing care.  Each program is commonly mistaken for the other; or, many are simply unsure of what each program is designed to do and how each program works.

What is Medicare?

Medicare is a federal health insurance program for the elderly and disabled.  It is meant to cover medical expenses for individuals over the age of 65, as well as individuals with certain disabilities or conditions under the age of 65.  Like any other health insurance plan, the insured is responsible for any services not covered under Medicare as well as being responsible for any applicable deductible.

How Does Medicare Relate to Long-Term Care?

Medicare Part A will cover up to 100 days of coverage in a skilled nursing facility if the patient was admitted to a hospital for at least 3 days and entered the skilled nursing facility within 30 days.  Though Medicare will cover up to 100 days of stay, it is important to note it will not cover all expenses associated with this stay.  Medicare will fully cover the first 20 days of the patient’s stay, and will only partially cover the remaining 80 days.  Therefore, the patient is still likely to incur large out-of-pocket costs during this time.

Practically speaking, Medicare coverage is not guaranteed after three days if the patient is not classified as in-patient for those three days. Furthermore, Medicare rarely pays for the partial coverage for the remaining 80 days since it is unlikely that patient will still be “recovering”. Please contact our firm if you have any questions about this as soon as possible after a loved one has been admitted to the hospital.

In short, Medicare actually does not relate to long-term care at all.  Medicare provides limited coverage to those entering a skilled nursing facility for the purpose of rehabilitation.

What is Medicaid?

Medicaid is a jointly-funded federal and state program meant to provide medical coverage to those in financial need, regardless of age.  Each state administers its own Medicaid program and each state employs its own qualifications for Medicaid eligibility, however, in general, eligibility relies on the individual’s income and total assets.

Medicaid is designed to cover a wide variety of medical expenses for those who qualify.  This applies to individuals of all ages, including, but not limited to, the blind, the disabled, the elderly, individuals under the age of 19, women who are pregnant, and families with children.  Medicaid is not strictly meant for those over the age of 65 or those who are disabled like Medicare is designed for.

How Does Medicaid Relate to Long-Term Care?

Medicaid will pay for long-term care costs for the elderly, blind, and disabled in a Medicaid-approved facility.  There is no expiration on this coverage, so long as the Medicaid applicant remains within the parameters of eligibility.  Many states have various waiver programs which can allow for an eligible individual to receive Medicaid benefits while residing in an assisted living facility or participating in an at-home care program.  Therefore, some states may offer a wider variety of Medicaid-approved facilities than simply skilled nursing facilities.

In order to qualify financially for Medicaid, individuals must have nominal asset levels ($2,000 or less in most states), and married couples must have assets levels below the Community Spouse Resource Allowance – a figure that varies greatly between states, but is generally capped at $119,220.00.  Additionally, the person receiving the benefit must not have income over the cost of care at the facility. This often leads to a great fear or uncertainty of Medicaid.  Potential applicants are fearful of losing their life savings by trying to qualify for benefits – but also know they will lose their life savings paying the nursing home bill if they do nothing.

This is where DelCotto Law Group can help by using asset preservation and long-term care planning techniques to enable you to maintain the lifestyle to which you are accustomed while assisting in protecting hard earned assets.

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