When it comes to the differences between Medicare and Medicaid, there is much confusion surrounding the two. We break down who qualifies for each program, what services are covered and the qualifying steps needed to get started.
What is Medicare?
Medicare is a Federal health insurance program. It provides health care for people over 65 years who’ve paid into the program. Seniors enroll in the program. Medicare health care coverage is available regardless of income. But the insurance is not free.
Seniors pay a monthly premium for Medicare insurance. Medicare covers most medical bills. These include: doctor’s appointments, hospital stays, rehab services, some treatments and specific equipment. Besides monthly premiums, patients pay a deductible when using services.
The federal government sets all rules, regulations and standards for Medicare. Medicare is also available for younger disabled people and dialysis patients.
There are several parts to Medicare insurance. Medicare Part A covers up to 100 days in a “skilled nursing” facility per incident of illness. Strict guidelines determine qualifying for a skilled rehabilitation stay.
A three-day admission to a hospital is one of the requirements. The first 20 days are covered. Days 21 through 100, have an out-of-pocket copayment per day. A weekly evaluation determines a patient’s progress. Medicare will continue paying its part if the patient meets progress standards. Patients rarely get their full 100 days of rehab care – whether they’re fully recovered or not.
Medicare DOES NOT pay for long term-term care. Medicare only covers a short stay in rehab following a three day hospital admission.
What is Medicaid?
Medicaid is a low-income assistance program. It’s jointly funded by Federal and State taxes. Medicaid provides health care coverage for very low-income people – not just older adults. Some people can have both Medicare and Medicaid for health care coverage. Medicaid helps pay for premiums, deductibles, medications and services for those who can’t afford to pay.
Medicaid is jointly administered by states and the federal government. Medicaid eligibility requirements vary from state to state. People eligible for Medicaid coverage must meet strict income and asset guidelines.
Medicaid Coverage of Long-Term Care
The most significant difference between Medicare and Medicaid is coverage for long-term care. Medicaid covers long-term care. These care settings include:
- nursing home care,
- assisted living,
- residential care,
- adult care homes,
- memory care and
- some in-home care.
People must apply for Medicaid assistance. To qualify, applicants must meet low-income standards, have limited assets AND have significant daily care needs.
Income and Assets for Medicaid Eligibility
In Oregon, a single person can make up to $2,205 per month (in 2017) in gross income to qualify for Medicaid. Asset requirements are usually limited at $2,000.00
Applicants cannot give away or “gift” their property or assets. There is a 5-year look-back law. The application process requires proof of income. Medicaid workers search for any hidden or undeclared income. The Medicaid application requires bank records, bills of sale and financial documents.
To understand acceptable ways to “spend-down” assets, consult an Elder-law attorney. Pre-plan long before applying for Medicaid.
Part of the application process for Medicaid includes a care needs assessment. A Medicaid worker collects medical history, diagnosis’ and documentation. Applicants must prove they need help with daily activities of living (ADLs). Assistance with the following are evaluated:
- medication management,
- meal preparation,
- transfers and
- toileting assistance.
Each ADL is scored based on the amount of help needed. The combined total determines a person’s level of care. The care level determines the monthly reimbursement a care home or nursing home receives. This level of care is for Medicaid purposes. Don’t confuse it with other levels of care many communities talk about.
Medicaid continues covering long-term care if a senior continues qualifying for care. Yet, Medicaid eligibility rules change frequently. Income and care levels are forever in a state of flux.
Also, significant numbers of care facilities do not have contracts with the State. They do not accept Medicaid payments.
Accessing Medicaid takes significant pre-planning. We highly recommend contacting an Elder-law attorney.