What Is The Difference Between Medicare and Medicaid? Why You Need To Know the Difference
One of the key differences between Medicare and Medicaid is that Medicare is available to people at age 65 regardless of income or work history. Medicaid is available only to low income people with limited assets. Another difference is that Medicare is administered primarily by the federal government through the Social Security Administration covering hospitalization and certain medical expenses. Medicare also offers additional coverage through it's supplemental coverage program and Medicare Advantage plans which are administered through private health insurance companies.
Like Medicare, Medicaid is a federal program, but is administered through the individual states. Each individual state can determine the level of coverage and eligibility criteria subject to federal guidelines and poverty standards.
Medicare - Health Coverage at 65
Medicare is an entitlement that most Americans qualify for after turning 65. Medicare covers all of it's recipients with hospitalization coverage up to 60 days, this is known as Medicare Part A. People who haven't paid enough into Social Security to qualify for Part A for free may still be able to pay into the program for a monthly premium. Medicare Part B covers covers doctor visits, lab tests, preventative services such diagnostic screenings and flu shots, medical equipment and supplies, ambulance and medical transportation, as well as other outpatient services. Part B does require a monthly premium and copays for covered services. Under Medicare Part C, also known as Medicare Advantage, coverage may be available for vision, hearing, dental, and fitness and wellness programs such as gym memberships. Some plans may offer coverage for services like non-emergency transport for doctor visits and over-the-counter medications. Medicare Advantage plans are provided through private insurance companies. The premiums, coverage, and copays vary according to each plan. Medicare Part D offers prescription coverage and is also made available through private insurers. Part D plans will also vary according to premiums and coverage, and will also be subject to copays and deductibles.
Medicaid - State Health Care Coverage Programs For Low Income People
Unlike Medicare which is available to anyone at age 65 regardless of income, Medicaid is an income based government assistance program that offers coverage for low-income families including children, low-income pregnant women, and people with disabilities. One of the most significant differences between Medicare and Medicaid is that Medicare doesn't offer much coverage for Long Term Care whereas Medicaid does.
Qualifying for Medicaid can be complicated and possibly costly, but there are alternatives if you act now.
Medicaid is often used to cover Long Term Care expenses for people who become unable to care for themselves. The health care coverage Medicaid provides is comprehensive covering inpatient and outpatient as well as costs and services. But long term care, usually provided by a nursing home, is beyond the means most people can afford. If an individual needs to apply for Medicaid for long term care, they need to turn their income over to Medicaid. Medicaid will pay the nursing home your income as well as the difference between your monthly income and the cost of the nursing home.
As far as assets are concerned, an applicant can only have assets worth $2,000 in total to be considered eligible for Medicaid. If an applicant's assets are above that amount at the time they apply, Medicaid can direct any assets above $2,000 be sold and the proceeds go to pay for the applicant's care. In the case of an applicant's house, they would not be eligible for Medicaid while owning the house. The house most likely would need to be sold to cover the applicant's care during this time. When the proceeds from the sale of the home are exhausted on the applicant's care, the applicant may become eligible for Medicaid. This period of time between applying and when the applicant is eligible is known as the "spend down". After the spend down the applicant will deemed to be eligible to receive Medicaid coverage according to the state agency.
This can have a devastating impact on the applicant's estate and their ability to pass on their property to their families.
While one solution may be be to transfer assets such as money or the house to a loved one, this can have potential consequences since Medicaid will audit every transaction made over a period of five years. This is known as the "look back" period. Any transfers that are deemed not being for fair market value by Medicaid will be considered disqualifying so for all practical purposes, the assets are still considered as belonging to the applicant and they will have to additionally spend down that amount even though they don't have it.
Contact A Medicaid Attorney
If you are wondering how this might affect you or a loved one, it is possible to plan to avoid this type of situation. You can plan ahead and transfer assets in anticipation of possibly needing to apply for Medicaid at one point and hopefully avoid a large spend down and the look back period. Your best bet however would be to contact a Medicaid Planning Attorney for advice on the best ways to preserve your assets so that they can be passed on to your loved ones. Keep in mind, Medicaid Planning is just one aspect of Estate Planning. There are a number of other actions that could help you preserve your assets for yourself and your loved ones. Jelks Law will be happy to answer your questions on Medicaid Planning, Estate Planning, Probate Law, or anything related to planning for your family's future.