There is often a lot of confusion regarding the differences between Medicare and Medicaid. Who is eligible? What costs do they cover? Can I receive both? These are all valid questions that many people have.
Medicare is a federally run program that provides health insurance for individuals 65 years and older. Medicare is also available to some individuals under the age of 65 who have certain disabilities. There are set standards, costs, and benefits to Medicare, so this means that your Medicare coverage will not change based on the state you reside in. Most importantly, Medicare eligibility is almost strictly determined based on an individual’s age. Income is not a factor in determining Medicare eligibility. Medicare has four parts: Part A (Hospital Insurance), Part B (Medical Insurance), Part 3 (Medicare Advantage Plans), and Part 4 (Drug Coverage).
Medicaid is a joint federal and state program that helps with medical costs for individuals with low-income and low resources. While Medicaid does have some general federal rules, each State is in charge of running and administering its own Medicaid program. Costs, benefits, and eligibility determinations depend on which state an individual resides in. Individuals that are currently receiving Medicare benefits can also receive Medicaid benefits if they meet the income requirements.
Long-Term Care
One of the biggest misunderstandings surrounding Medicare and Medicaid is whether or not they cover long-term care and/or nursing home stays. Simply put, Medicare does not cover long-term care. However, this does not mean that Medicare will refuse to cover any time spent in a nursing home. Medicare will cover short-term stays in nursing care facilities (if the facility is Medicare-certified) if the type of care an individual needs is considered skilled nursing. Skilled nursing does not include custodial care, which is help with daily life functions such as bathing, dressing, and eating. If an individual only needs custodial care, Medicare will not cover the stay. If an individual needs skilled nursing, Medicare will completely cover the first 20 days. Then, an individual will be responsible for a portion of the cost per day for days 21-100. After the 100th day, Medicare does not help cover any costs in this regard.
Medicaid is different in that it will cover the cost (or at least a good portion of it) of long-term care as long as the individual receiving care meets the income and asset requirements. The amount of benefits an individual on Medicaid will receive depends on the specific state and program they are enrolled in. Even if an individual does not meet the income and asset requirements to enroll in Medicaid at the beginning of their stay in a nursing home, there are several ways that they may become eligible. One is to pay out-of-pocket to “spend down” their assets in order to meet Medicaid requirements. Another is to work with an attorney familiar with Medicaid planning to become eligible as fast as possible while protecting as many assets as possible, too. There are also many exceptions to the asset requirements, which means many people are eligible without even knowing it. It is important to note that not all nursing homes accept Medicaid, so if you think that you will qualify for Medicaid (either now or in the future), you should do your research and see what nursing homes in your area accept Medicaid benefits.
Dual Eligibility
Individuals can be “dual eligible” for both Medicare and Medicaid benefits. If you are “dual eligible,” you can select a dual health plan that often combines hospital, medical, and drug coverage, while also allowing you to receive the full benefits you are entitled to from Medicaid. These plans are sometimes available with a premium as low as $0. While the requirements to be dual eligible fluctuate depending on the state you are applying in, it is important to understand that you can receive both Medicare and Medicaid at the same time. It is not an either/or decision.
Medicare and Medicaid are both extremely helpful government programs. It is important to do your research or consult with appropriate professionals to determine whether or not you are entitled to receive benefits. Understanding what each program does and does not cover is an important part of planning for the future and being prepared for any medical situation that may arise. Lastly, while Medicaid and Medicare can be very complex and hard to understand, it is never too early to start thinking about and planning for your potential eligibility! If you have any questions or concerns, there is no shame in reaching out to an attorney for advice.
See also our related blog post about planning in advance for the costs of long-term care:
https://deppefredbeckyount.com/the-rewards-of-planning-early