You have probably heard of Medicaid and you undoubtedly know a little about Medicare. Like many people, you may even think the two programs are interchangeable. In reality, however, they are very different programs providing much different benefits. As a senior you may find that you need benefits offered by both Medicare and Medicaid; however, if you failed to plan ahead you might end up putting assets at risk. To help make sure that doesn’t happen, the Oklahoma City Medicaid planning lawyers at Parman & Easterday explain the difference between Medicare and Medicaid.
Medicare and Medicaid are both federally sponsored healthcare programs; however, Medicare is exclusively for people over age 65 and for certain individuals under age 65 who are also disabled. Medicare is funded by the federal government from monies you (or your spouse) paid into the program for the required length of time – 10 years — through your payroll taxes during your working years. Having made those contributions you are automatically entitled to Medicare benefits. Medicare comes in four parts. Part A, or basic Medicare, is free. If you wish to sign up for the additional parts of Medicare, however, it may require payment of a monthly premium similar to private health insurance. The four parts of Medicare and the benefits included in each part are as follows:
- Part A – Hospital care – Covers the cost of being in a medical facility.
- Part B – Covers doctors, medical tests and procedures – basically, anything done to you. There is a monthly premium for Part B coverage.
- Part C – Medicare Advantage – Part C is an alternative to traditional Medicare coverage. Coverage often includes Parts A, B and D. Medicare Advantage plans are administered by private insurance companies.
- Part D – Prescription drug coverage – D is administered by private insurance companies, and you are required to have it unless you have coverage from another source. Part D requires you to pay a monthly premium in most cases.
Medicaid is a healthcare program that is a joint federal/state program. It is primarily funded by the federal government; however, the individual states have the option to supplement funding for Medicaid if they choose to do so. Although the federal government provides oversight for Medicaid, it is administered by the individual states which explains why you will notice differences in the eligibility criteria and benefits offered from state to state. In all states, however, Medicaid covers basic healthcare, such as:
- Certain inpatient and outpatient hospital services
- Early and Periodic Screening, and Diagnostic, and Treatment (EPSDT) services for children
- Nursing facility services
- Home health services
- Doctor’s services
- Rural health clinic services
- X-ray and laboratory services
- Family planning services
- Midwife services
- Freestanding Birth Center services
- Certified pediatric and family nurse practitioner services
- Tobacco cessation counseling for expectant mothers
Every state is required to provide these basic services. States may, if they choose to, provide additional benefits; however, they must include the basic benefits. If you qualify for Medicaid benefits, there are no monthly premiums nor co-payments.
Medicaid is a “needs based” program, meaning that an applicant must prove the need for benefits in order to qualify. To be eligible for Medicaid, an applicant must have both income and assets that are below the program limits. Income limits are directly tied to the Federal Poverty Level for the area where the applicant lives. Asset limits are typically extremely low — $2,000 for an individual and $3,000 for a couple in most states. Asset values exceeding those amounts are non-exempt and Medicaid will turn down your application. To qualify you will be expected to “spend-down” your assets until their value falls below the program limit.
Does Medicare or Medicaid Cover Long-Term Care Expenses?
One of the most important differences between Medicaid and Medicare becomes apparent if you are ever faced with the high cost of long-term care (LTC), i.e. skilled at-home or nursing home care. Medicare will not pay for long-term care while Medicaid does cover LTC expenses. You must first qualify for benefits. In order to ensure that you are eligible for Medicaid, without putting your assets at risk, down the road, be sure to include Medicaid planning in your comprehensive estate plan now.
Contact Oklahoma City Medicaid Planning Lawyers
For additional information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about Medicaid planning, contact the experienced Oklahoma City Medicaid planning lawyers at Parman & Easterday by calling 405-843-6100 to schedule your appointment today.