Disclaimer: With Medicaid, VA, and insurance regulations frequently changing, past blog posts may not be presently accurate or relevant. Please contact our office for information on current planning strategies, tips, and how-to's.
Do you have clients that are exploring their options for long-term care? If so, chances are you’ve gotten plenty of questions regarding confusing terms, such as Medicare and Medicaid. Although they sound similar, the two programs have plenty of differences, especially when it comes to skilled nursing care. How can you explain each program and the different coverage each one offers? We’re here to help you out!
What are the similarities between Medicare and Medicaid?
Before we get to the differences, it’s crucial to understand how the two programs are similar. Both Medicare and Medicaid are government entitlement programs that U.S. citizens can use based on age, health, financial, and other requirements. The two programs were incorporated into law in 1965 and are meant to help with healthcare costs. When it comes to long-term care, Medicare and Medicaid work hand-in-hand while offering separate coverage.
What is Medicare?
The main objective of Medicare is to make health insurance available to elderly and disabled individuals. It is federally funded and available for people aged 65 and older as well as disabled individuals who are under age 65. Like traditional health insurance plans, the insured individual covers any applicable deductible, or copayment, as well as services not covered under Medicare.
Medicare has four parts, each of which covers a different portion of health insurance. Medicare Part A helps with hospital inpatient care costs and is often referred to as Hospital Insurance. Part B is available at an additional cost (typically $135.50 per month in 2019) and includes some services and products not covered under Part A, like outpatient or observation care. Part C consists of supplemental coverage that isn’t included in Parts A and B and is commonly known as Medicare Advantage. Lastly, Medicare Part D helps with prescription costs.
Does Medicare cover long-term hospital stays?
For inpatient hospital care, Medicare patients may receive coverage for 90 days under Medicare Part A. The first 60 days are fully covered by Medicare after the Medicare copay (or deductible), while the following days 61-90 days cost $341 for coinsurance each day (as of 2019). If the patient requires skilled nursing care instead of full inpatient hospital care, Medicare may also cover a temporary nursing home stay.
When does Medicare pay for skilled nursing care?
Medicare only covers a nursing home stay immediately after or within 30 days of a medically necessary inpatient hospital stay lasting three or more consecutive days. In order to be eligible for this benefit, the patient must be admitted as an inpatient; nursing home care will not be covered if the hospital stay is classified as outpatient or observation care. The nursing home stay must also be for the ailment diagnosed and treated during the hospital visit; it will not be covered if the skilled nursing care is only for non-skilled activities of daily living (ADLs). In order to qualify for continued coverage, the patient should show signs of improvement based on a schedule laid out by the doctor. Medicare offers coverage for eligible nursing home stays up to 100 days. The first 20 days are fully covered, while days 21-100 require a copayment by the insured for $170.50 per day (as of 2019).
After 100 days, Medicare will no longer cover a nursing home stay. If the patient is unable to return to the community after 100 days (or less) of skilled nursing care, they will have to pay out of pocket to extend their stay. That is unless they qualify for Medicaid.
Read more: Does your client need long-term care insurance?
What is Medicaid?
Whereas Medicare provides health insurance for elderly and disabled individuals, Medicaid is designed to provide medical assistance for people of all ages who are limited when it comes to income and resources. Medicaid is both federally and state-funded, but it is managed by the state. As such, each state has its own set of Medicaid regulations that run parallel with the federal rules. Some states even have specific names for their Medicaid programs, such as TennCare (Tennessee) and Apple Health (Washington).
In long-term care situations, Medicaid has both health and financial eligibility requirements. To meet the health prerequisite, applicants must need assistance with at least three activities of daily living (ADLs) and require round-the-clock care. Additionally, individuals must meet income and asset requirements. The rules for income eligibility vary by state, but most states compare the individual’s current income to their cost of care. If their cost of care exceeds their income, they may be eligible for Medicaid. For asset eligibility, non-exempt assets must be less than a specific amount, depending on the state as well as the applicant’s marital status.
How does Medicaid assist with long-term nursing home care?
After Medicaid eligibility is verified, individuals can receive long-term care in a Medicaid-approved facility, typically a nursing home. Medicaid coverage never runs out for blind, disabled, and elderly individuals as long as they continue to meet the eligibility requirements. In almost every case, the patient utilizing Medicaid is staying in a nursing home permanently rather than for temporary medical assistance. It’s worth noting that some states also offer waiver programs for Medicaid that covers assisted living facilities or at-home care.
How can The Krause Agency help?
At The Krause Agency, we are committed to helping your senior clients accelerate their Medicaid eligibility while also guarding their assets in the most economically beneficial way. Unfortunately, many individuals assume their only option to become eligible for Medicaid is to deplete their assets by paying for care or making unnecessary purchases. But they have other options, and they deserve to be informed! Our Benefits Planners are well-versed on the limitations of Medicare coverage and the benefits that Medicaid offers for skilled nursing care. Make sure your senior clients understand the differences between Medicare and Medicaid and how they can utilize both programs for long-term care. Get in touch with us to learn how we can help!
