Although Medicare and Medicaid are both household words, many people confuse the two. There are significant differences between these programs, and anyone working with elder clients or caring for elderly relatives should understand the basic differences. To learn more about how these differences may affect your family should you or a loved one require long-term care, contact an experienced lawyer about Medicaid eligibility in Washington, D.C., Virginia or Maryland to schedule a comprehensive initial consultation on this aspect of elder law.
What is Medicare?
Medicare was created under the Social Security Act of 1965 as a national health insurance program aimed at ensuring basic health care for people aged 65 or older and those disabled for two years. Medicare is funded entirely by the federal government. As is the case with private insurance, insured people pay deductibles and co-payments for most types of services. Medicare eligibility is not based on any income or resource limitations, and a denial of Medicare would be based on other criteria.
What is Medicaid? Who Qualifies?
Medicaid, on the other hand, is a welfare health care program, which is administered by each state with co-funding provided by the federal government. Eligibility varies from state to state, but is always based on particular medical, financial, and age criteria. To qualify for Medicaid, the recipient must be older than 65, disabled and have no more than $2000 in countable resources. There is some variation by state in resource limitations that apply, but individuals who do not meet these criteria can be denied Medicaid.
Does Medicare or Medicaid Cover Long-Term Care?
Medicaid covers community-based health care and long-term care (nursing home) for qualified individuals. Medicare, on the other hand, by federal law does not pay for long-term care beyond the first 100 days. In order to qualify for Medicaid coverage, one must satisfy resource and income limitations pertaining to individuals and married couples.
Resources and Their Effect on Medicaid Eligibility
The rules for counting resources that affect Medicaid eligibility are complex. Asset transfers that are carried out for less than full value of those assets within a period of five years before Medicaid benefits begin may result in a “divestment penalty.” This rule is intended to prevent those with significant assets from unfairly obtaining financial eligibility by transferring assets to others, and is the source of the Medicaid asset spend-down concept.
However, some resources are completely exempt and others may be preserved without penalty for the non-institutionalized spouse.
The spouse who is not in a care facility may want to keep the house despite the other spouse’s long-term care needs. In most cases, there are a variety of options available to ensure that the home is an exempt asset and remains an exempt asset.