Distinguishing Medicaid and Medicare: Understanding the Variations
The acronym LASA, standing for look-alike-sound-alike, is commonly recognized among healthcare professionals, particularly when referring to medications. When it comes to federal programs, Medicaid and Medicare look alike and sound alike but work very differently.
Both Medicaid and Medicare were started in 1965 under Lyndon B. Johnson’s administration in response to the inability of older and low-income people to purchase private insurance.
Medicaid is an assistance program funded federally and at the state level, providing coverage for health care to low-income individuals regardless of age. It’s governed federally, with each state administering its own plan, which can vary from one state to the next.
Medicare is a federal insurance program that provides health coverage for people aged 65 and over or those under 65 with a severe disability, such as end-stage renal disease or Lou Gehrig’s disease, also known as ALS (amyotrophic lateral sclerosis). Dependents are not typically covered.
More about Medicaid
Medicaid eligibility is needs-based, meaning income and assets are counted when determining eligibility. Both Medicare and Medicaid will cover a broad range of health care services, including hospital stays and physician office visits. Yet, Medicaid will cover nursing home care, in-home care services, long-term care, and transportation to receive medical care, which Medicare does not. It’s possible to qualify for dual coverage, meaning Medicare and Medicaid will work together to provide health care coverage and lower costs.
Regarding cost, Medicaid, in most instances, is free, though a small copay may be required depending on the state plan. Medicaid can also recover medical costs against assets in a recipient’s estate after the recipient’s death. This could mean a lien is placed and executed on a recipient’s home, depending on whether a surviving spouse or blind or disabled child still lives there.
More about Medicare
Medicare has premium payments, deductibles, and co-payments for benefits and services. Co-payments may be larger for those with a higher income, but eligibility for insurance coverage is not income-based. With Medicare, you must work for about 10 years (40 qualifying quarters) to receive benefits. No premiums are required for Part A, which covers hospitalizations. Premiums may be necessary if you sign up for a Medicare Advantage plan, which is different from Original Medicare, where you can purchase supplemental coverage to minimize out-of-pocket costs. Because Medicare is not administered by each state, a recipient will usually have the same coverage and pay the same copays and deductibles regardless of the state of residence. Copays and deductibles are required for Medicare’s Part B (outpatient services) and Part D (prescription medication) plans. Also, a financial penalty can be assessed if you don’t sign up for Medicare Part B when you first become eligible, delaying coverage.
When You’re Ready for Medicaid Assistance or Medicare Coverage
Research is encouraged before you hit retirement age and become eligible for Medicare. There are many plans designed to meet specific needs, from those who are generally healthy to those who have chronic illnesses. Meeting with a health insurance agent before making a purchase is recommended. Plans may change annually, so when you re-enroll, it’s good to have someone you trust for guidance. Additionally, an elder law attorney can help explain how health care expenses fit into your estate planning and long-term care goals.
Medicaid plans and coverage differ from state to state, and sometimes county to county. Elder law attorneys specialize in the eligibility and application process for government benefit programs and are happy to support you or handle the entire process. If you’re seeking benefits for long-term care needs, professional help ensures you have the benefits to pay for medical expenses when you need assisted living or nursing home care. Proactive planning at least five years before the need for long-term care services offers the most options. Crisis planning ensures the fastest application process in a medical emergency when you or a loved one are transferring to a facility or already there.
Our estate planning and elder law firm would be happy to answer any questions you have about your potential eligibility for either program. Contact our office today at (954) 315-1169 to schedule a consultation.