What is Medicaid ?
Medicaid is a federal program that provides payment for medical care for persons who are unable to pay for medical care. It covers physicians’ services, hospital care, medications, supplies, and other necessary services. It also pays for the expenses of long-term care in a nursing home or an adult care home. The Medicaid program is administered independently in each state, but the basics are the same throughout the United States. Eligibility is based upon the amount of assets a person has, along with the income that the person receives.
It is important to distinguish between Medicare and Medicaid. Medicare is an insurance program providing payment for medical needs for persons 65 and over and for certain disabled persons. All persons 65 and over, regardless of financial resources or income, are eligible for Medicare. Medicare, however, provides only limited coverage in the case of an illness, excluding payment for prescription medications and not covering any of the cost of long-term custodial care in nursing homes or adult care homes. These non-covered items must be paid privately by Medicare beneficiaries, unless coverage is provided under some type of supplemental policy the person has purchased independently. Medicaid, on the other hand, pays for all medical needs for those of any age who have been determined to be eligible. In fact, a person with limited income and resources who has Medicare coverage may also qualify for Medicaid benefits.
Medicaid is most often of importance to middle-income Americans because the cost of long-term care for such illnesses as Alzheimer’s Disease or paralysis caused by a stroke is not covered by Medicare. Most people who need such care for extended periods will eventually deplete their assets and be unable to pay the costs of their care. At such a time, Medicaid is available to pay the difference between their actual income and the actual costs of care, including not only room and board, but also physicians’ care, medications, hospital care, and all other reasonable necessary medical expenses. Medicaid covers the costs of such care in nursing homes, adult care homes, hospices, and, in appropriate cases, in the patient’s own home. If faced with the possibility of such long-term care expenses, there are certain facts one should be aware of:
- In determining eligibility for Medicaid payment for long-term care expenses, a team, comprised of a social worker and financial worker, will review the individual’s actual need for care, the person’s available resources (including life insurance and retirement plans), and income received from any source.
- In determining the eligibility for one spouse, the resources and income for both spouses is considered, regardless of community property laws or the nature of the ownership of the asset.
- Any assets transferred within 60 months prior to application may be considered available if they were transferred for less than value, whether they were transferred to a person or to a trust.
- Assets of married couples, however, receive special treatment so that the spouse who remains living at home will not be unduly impoverished. Such a non-institutionalized spouse is permitted to keep up to a federally-established maximum of $47,104 to $111,560 and is allowed to keep a substantial portion of the income of the couple in order to provide for support expenses at home.
- In addition, there are certain resources that are not counted for eligibility purposes; these may include the family residence, household contents, a vehicle, an irrevocable prepaid burial fund, and other necessary items.
- It is important to be aware of the specific eligibility provisions and exemptions so that assets will not be wasted before applying for Medicaid.
- There are appeals processes built into the Medicaid system. If a person is unhappy with eligibility determinations, care decisions, or placements made under Medicaid, there is a process for administrative review, an administrative hearing, and even court proceedings to help enforce one’s rights.
It is important for you to understand certain aspects of the risks associated with legal and financial planning for institutionalization in a skilled nursing facility. As we have previously discussed, planning for Medicaid eligibility can be very time-consuming and financially risky and at times overwhelming. I will advice you to have a guide, who has walked this walk & who can make your journey through this maze comfortable, pleasant and enjoyable…..