Medicaid vs. Medicare
Before you begin your search for long term care, it is important you understand the difference between Medicaid and Medicare. Due to the similarity of the spelling, many people confuse the two programs. Most of us are fairly familiar with the Medicare program. Maybe you have used it or your parents have used it to pay for hospital and doctor visits. Regardless, everyone has seen the tax deduction on his or her paycheck.
Medicare, briefly, is a type of public health insurance that pays for primary care including doctor’s visits. Every senior who has paid into the Medicare system during their working years is eligible for Medicare. There are two “parts” to Medicare; Part A and Part B. Part A pays for hospital visits while the Part B picks up part of your outpatient doctor visits and some other medically related services. It will, and this is where it begins to look like Medicaid, sometimes even pay for nursing home care. The catch is, it will only pay for nursing home care under very limited circumstances, and even then for no more than 100 days.
On the other hand, many of us have never had to use the Medicaid program. Medicaid is a needs based program. Its eligibility requirements are based on the perceived need for assistance along with the individual’s financial and medical wellbeing. A medical need and a financial need are the starting points for determining and individual’s eligibility for benefits. A hopeful applicant must meet all eligibility requirements before receiving benefits.
Nursing home care is an extension to our overall medical treatment system. Hospitals, physicians, therapists, and nursing homes form a web of care that is part of our society’s answer to maintain our senior population’s health. Medicaid pays for long term nursing home care and fills a gap left open by the Medicare system,
Here is a summary of the two programs:
- Health Insurance for seniors.
- An individual needs to have contributed to the Medicare system to be eligible.
- Pays for primary hospital care and related medically necessary services.
- Generally, individual must be over 65 to be eligible.
- May have a co-pay provision depending on the services received.
- Federally controlled, uniform application across the country.
- Needs based health program.
- Pays for long term care.
- Individual must meet income and asset test to be eligible.
- Individual must be over 65, disabled, or blind.
- Requires mandatory contribution of ALL recipient’s income.
- Individual state differences create a unique program in each state.
Even though the Medicaid program seemingly has strict financial requirements, there are options with which a family can restructure its assets to qualify for benefits. Planning to protect assets and obtain benefits for long term care takes careful consideration of the entire financial picture of the applicant and spouse. With the proper implementation of a plan, a significant amount of assets can be saved. Also, someone should be appointed through a power of attorney or trust to manage your affairs in case you cannot. A failure to plan ahead often results in assets being spent on nursing home bills until the asset eligibility levels are reached.