by Anne Bogardus, Founder (and former caregiver)
This information is provided for educational and information purposes only. It is not legal advice. Please consult an attorney for specific questions on how to comply with Medicaid programs in your state.
There seems to be a lot of confusion out there about the Medicare and Medicaid programs established by the federal government. I think sometimes people use the terms interchangeably without realizing there are significant differences between the two.
Caregivers need to understand the differences between the programs to make sure the parent they care for has full access to the benefits they may need. Medicare and Medicaid are government-run health benefit programs that were created in 1965 as a method of providing health insurance coverage to the elderly and low-income Americans who were unable to buy private health insurance. Both Medicare and Medicaid are social insurance programs, allowing the financial burdens of the healthy and ill to be shared among all tax-paying individuals. While there are similarities between the two programs, Medicare and Medicaid serve very different purposes. Medicare is federally-run, providing coverage to individuals age 65 and older or with a severe disability, regardless of income. Medicaid is both a state and federal program that provides health coverage to low-income individuals and families. Medicaid programs are administered at the state level which means each state is free to establish its own criteria of qualifying factors and coverage based on federal guidelines.
Some individuals may be eligible for both Medicare and Medicaid (dual eligible). In those cases, the programs work together to provide health coverage for qualifying individuals.
Medicare is a trust fund of sorts that tax payers contribute to through payroll withholding. This program serves to provide medical coverage for people age 65 and older regardless of their income level. Patients are required to pay a portion of medical treatment costs and small monthly premiums are required for non-hospital coverage. Since Medicare is a federally-run program, it is consistent across the United States, and administered by the Centers for Medicare & Medicaid Services. Medicare has several types of coverage labeled Medicare Part A, Part B, Part C, and Part D.
- Part A is hospital insurance
- Part B is medical insurance
- Part C is Medicare Advantage Plans
- Part D is Prescription Drug Coverage
Medicare also covers certain disabilities including end-stage renal disease (ESRD) and Lou Gehrig’s Disease (ALS). Medicare also covers a portion (or the entirety of) certain home health coverage including skilled nursing, durable medical supplies, and in-home therapies. Upon issuance of the Original Medicare Coverage Card, which is received in the mail, it is imperative that the covered individual review his or her medical needs and preferred coverage in order to enroll in the specific Medicare coverage plan that best suits his or her needs. M
Medicaid is a government-funded assistance plan offered to low-income individuals and families across the nation. Typically, all medical treatments and services are covered at or near 100%. Because Medicaid is a “federal-state program,” qualification criteria and services vary from state to state and the program is run by state and local governments while adhering to federal guidelines. Eligibility determination for Medicaid coverage is based on income and financial assets; it covers hospital, drug, and medical care and treatment for individuals receiving services. While individual states may differ on who is eligible to receive Medicaid, in general, it covers low-income individuals with a disability, pregnant women, children under the age of 18, and individuals over 65 (who may be dual eligible for both Medicare and Medicaid). Medicaid covers long-term care services for individuals with disabilities as well as those already receiving Medicare coverage should they meet income and asset restrictions. The Medicaid program will cover coinsurance and any copays remaining after Medicare coverage is exhausted. It will also provide additional nursing home days after the predetermined Medicare-covered days run out. Medicaid also provides dental coverage and transportation cost reimbursement for transport to and from medical appointments. There is no cost to receive Medicaid coverage but income limitations are strict. The applicant must apply for coverage and provide verification of income and assets that adhere to the specific limitations of the state where they live. Applicants should be aware that certain income may not be counted and that “spending down” assets that exceed the state limitation may be a possibility in order to qualify for services. While income limitations may differ from state to state, all states must exclude at least $20 of monthly income and the first $65 earned per month is not counted. In addition, only one-half of monthly income counts “against” the applicant and the applicant’s state may offer a spend-down or “medically needy” program which allows the applicant to deduct medical expenses from income in order to qualify. A trust may also be allowed by the state to protect funds while reducing total assets of the applicant.
Long-Term Care Needs
Caregivers should be aware that a parent who requires long-term care, such as that provided by skilled nursing, residential care, or other type of state-approved facility, and who needs financial assistance to pay for it, must meet Medicaid assistance criteria. The federal Department of Health and Human Resources explains Medicaid Long Term Care qualification criteria what that means in your state. Some states offer a Medicaid Buy-In program, allowing disabled individuals under the age of 65 to work and still get Medicaid benefits with either financial eligibility or a “buy in” to pay for coverage. In addition, spouses who remain at home and in the community are protected when their loved one enters long-term care. Income and assets up to a certain amount ensure that the community spouse is not impoverished due to the incredible financial strain of a loved one placed in a skilled nursing facility.
Medicaid Coverage By State
It is critical to remember that Medicaid coverage differs by state so contact your local office to ensure you have the most up-to-date and accurate information about who qualifies and what’s covered. Check out our Resource page for links to the Medicaid departments in each state.