Many seniors and their loved ones are confused over two very similar sounding goverment programs - Medicare and Medicaid. While the confusion is understandable, it is essential that you understand the basic differences between the two.
There are strict income and asset guidelines that must be satisfied to be eligible for Medicaid coverage. While Medicare is solely a federal program, Medicaid is a joint state-federal program. Each state operates its own Medicaid system, but it must adhere to federal guidelines to receive federal funds. Federal money pays for half the state’s Medicaid costs, and the state pays the rest.
One of the biggest differences between Medicaid and Medicare is the role each plays (or does not play) when it comes to long-term care.
A recent online article in Elder Law Answers responds to this common question: "What's the Difference Between Medicare and Medicaid in the Context of Long-Term Care?" As the article answers, Medicaid covers nursing home care, while Medicare typically does not.
Medicare Part A covers only up to 100 days of care in a “skilled nursing” facility per injury or illness, and this care must follow a stay of at least three days in a hospital. Although usually covered by "Medigap" insurance, for days 21 through 100, you will be responsible for a $152 daily copay. As the article also notes, the definition of “skilled nursing” and the prerequisites for this coverage are quite stringent—few nursing home residents receive the full 100 days of coverage.
Bottom line: Medicare pays for less than 25% of long-term care costs in the U.S.
Without other options like paying privately or being covered by a long-term care insurance policy, most individuals are forced to pay their own expenses for long-term care until they become eligible for Medicaid.
Long-term care planning is a very underutilized and often overlooked part of retirement and estate planning. Now is the time to schedule a consultation with an elder law attorney who can ensure that you have the necessary long-term care insurance and/or an alternative strategy that will meet your objectives.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri) and to download free tools to help you organize your estate, visit my estate planning website.
Reference: Elder Law Answers (August 22, 2014) "What's the Difference Between Medicare and Medicaid in the Context of Long-Term Care?"