The Mystery of Medicare and Medicaid
by Miles Hurley, founding partner of Hurley Elder Care Law
Working in the elder care community, we often hear of people who do not understand the difference between Medicare, CCSP Medicaid, and of course one of our specialties, long-term Medicaid.
It is very important for seniors to have a working knowledge of the three programs that cause so much confusion. Hopefully this will debunk some of the common myths we hear about every day.
Medicare is the Federal Health Insurance Program for almost everyone 65 or older, regardless of income (or for those under 65 who have been receiving SSDI for at least two years).
...people do not understand the difference between Medicare, CCSP Medicaid, and long-term Medicaid.
Medicare terms to be familiar with:
Medicare Part A – Hospital Insurance - Inpatient care in hospitals, skilled nursing care*** (for limited time), hospice care and home health care.
Medicare Part B – Medical Insurance - Services from doctors and other health care providers, outpatient care, home health care, durable medical equipment and some preventive services.
Medicare Part C – Medicare Advantage - Run by Medicare-approved private insurance companies, includes all benefits and services covered under Part A and Part B, and usually includes Medicare prescription drug coverage.
Medicare Part D – Prescription Drug Coverage - Run by Medicare-approved private insurance companies, helps cover the cost of prescription drugs, may help lower your prescription drug costs and protects against higher drug costs in the future.
Supplemental Insurance – Sold by private companies – Can help pay some of the health care costs that original Medicare doesn't cover (like co payments, coinsurance, and deductibles).
*** Medicare covers up to 20 days in a skilled nursing facility after a qualified hospital stay. Medicare can cover 80 additional days with a coinsurance payment of $148.00 a day, which may be covered by a supplemental insurance.
Medicaid - Medicaid is a medical assistance program that helps many people who cannot afford medical care to pay for some or all of their medical bills. Medicaid is a needs-based program. Medicaid is administered by the Georgia Department of Community Health (DCH) and pays medical bills with state and federal tax money. Two of the main Medicaid programs are called CCSP and Nursing Home Medicaid (or long-term care Medicaid).
The Community Care Services Program (CCSP) is a Medicaid waivered program that provides community-based social, health and support services to eligible consumers as an alternative to institutional placement in a nursing facility, e.g.: Adult Day Health, Home Delivered Meals, etc...
Nursing Home Medicaid will help pay for long-term custodial care in a skilled nursing facility.
There are many questions concerning Nursing Home Medicaid and what the state allows and doesn’t allow. Here are the top misconceptions in the community:
1. You will lose your house. That is simply not true. You are allowed to own a home, a vehicle, have a retirement account, a burial plan and/or burial account (up to $10,000) and $2,000 in a bank account and still qualify for Nursing Home Medicaid. (A married couple can have $115,920 in a community spouse resource allowance.) Of course, there are rules and regulations you have to follow in order to keep and maintain these items but nonetheless they are ALLOWABLE!! There are also a lot of options when it comes to financial planning for citizens with more than the $2,000 resource limit.
2. Medicaid is free. Medicaid is not free for anybody, anywhere in the United States. You, as an individual, contribute your monthly income toward your monthly bill. If you are married, your spouse living in the community may be able to keep some (or all) of that income, depending on the circumstances. Medicaid will pay the facility the remaining cost of your care. That’s care for seven days a week, 24 hours a day. It also includes all your meals, bathing, dressing, medications, activities, etc.
3. Someone can gift up to $14,000 and not get penalized. Medicaid does not allow for gifting of any kind. Medicaid is not the IRS; they have very different rules. Medicaid has a look-back period of five years. It’s true that if you gave money away within five years of the date you are asking for Medicaid, it is considered a transfer. Gifts and transfers are one and the same for Medicaid purposes. Either the gift has to be given back OR you have a penalty period before Medicaid will pay your nursing home bill, (approximately one month for every $5,600 gifted/transferred). Please remember that an Elder Lawyer can help you navigate through all of this and still qualify you for benefits.
4. Having too much money to be on Medicaid. We cannot say it enough – everybody’s circumstances are different. If you are married, it matters. Having a disabled sibling or child matters. There are ways to preserve assets and use them for the extras that Medicaid doesn’t pay for, like a private room, hearing aids, haircuts, private caregivers, etc.
5. Medicaid only knows what I tell them. Once a Medicaid application is submitted to the Department of Family and Child Services (DFCS), it is the responsibility of the Social Service Examiner to “investigate” the applicant. This includes property searches, financial reports, and income verifications amongst other items. More times than not, this is what gets a citizen’s application denied. If DFCS finds any documentation on their checklist that was not submitted, they can and will deny the application for benefits.
6. Nursing Home Medicaid is only given to senior citizens. There are people in need of Medicaid that are not over 65. Unforeseen circumstances happen all the time. Anyone that needs a skilled nursing facility may be eligible for Nursing Home Medicaid no matter the age of the person.
7. The Nursing Home said I have to spend down to $2,000. This is not true. You cannot have more than $2,000 in countable assets, but they do not necessarily have to be spent down. As stated above, there are many methods of planning which can preserve your assets. Please see an Elder Care Lawyer for assistance.
8. Estate Recovery. This is what happens after the death of a citizen who was receiving Medicaid benefits. It is true that if you have an estate valued at more then $25,000 at the time of death, Medicaid will try and recoup any benefits that they paid out on your behalf. However, with careful planning and the advice of an Elder Care Lawyer beforehand, there are methods of preserving an estate and making certain that the estate of the citizen will not be available for Estate Recovery.
In the end, please do not assume anything. We have seen too many people lose their life’s savings because of a lack of knowledge of the Medicaid rules and regulations.
There are too many variables to answer every question in one article. Make a free phone call to Hurley Elder Care Law and find out the facts BEFORE you apply or admit yourself, your spouse or a family member into a facility. If you do not call us, make sure you contact somebody educated in this particular field. It will be well worth your time.
Miles Hurley is the founding partner of Hurley Elder Care Law, which was created to provide comprehensive legal solutions for families with age-related events.
For more information on Medicare, visit http://www.medicare.gov