People with special needs may qualify for government benefits, including Medicaid and Medicare. While their names are similar, these programs are completely different and have different eligibility requirements and benefits.
Medicaid is a state-federal partnership program providing medical coverage to selected groups with low-incomes—children, pregnant women, parents of eligible children, people with disabilities, and elderly in need of long-term care. To qualify for Medicaid, a person must have low monthly income and minimal resources. Because eligibility is based on a person’s income and assets, Medicaid is known as a means-tested program.
Medicaid is a joint program between the states and the federal government, and each state is given much wider latitude to pick and choose the programs it offers residents. Some Medicaid programs are very comprehensive and cover everything a patient could need, while other Medicaid programs, especially so-called Medicaid waiver programs, target specific demographic groups, like people with developmental disabilities. Medicaid is, however, the primary federal insurer for long-term care.
Medicare is pure health insurance for people over age 65 and younger people with disabilities have been eligible to receive Social Security Disability Insurance (SSDI) benefits for at least two years. Even people who have not paid Social Security may be able to qualify for benefits on a parent’s work record.
Medicare is primarily a federal program that offers three types of coverage: Part A for hospital visits and some follow-up care; Part B for doctor visits and other outpatient care; and Part D for prescription drug coverage. (Part C, known as Medicare Advantage, is an alternative to Medicare offered by private insurers working with the federal government.)
Medicare does not pay for long-term care in a skilled nursing facility other than for short rehabilitation stays, and it does not pay all of a beneficiary’s hospital or doctor costs. To make up the shortfall, Medicare recipients can purchase private Medigap insurance for services or costs that Medicare does not cover.
This is extremely important to know in light of proper incapacity planning, a broad area of law that covers how you are cared for if you become physically or mentally unable to care for yourself. The type of care can range from simple tasks like buying groceries, paying bills, and handling financial matters to more important decisions such as selling real estate or gifting assets to your children, making it a crucial piece of your overall estate plan.
Parman & Easterday