When a loved one gets sick… really sick… who pays for what, exactly? Does Medicaid pay medical bills? Or does Medicare foot the bill? Or… do you have to pay out of your own pocket?
Medicaid is not Medicare; Medicare is not Medicaid. Your parents don’t understand the difference. Almost no one does.
Sadly, no aspect of aging is fraught with more misinformation than this topic.
Many people simply look to our government for help. And what does the government do? It creates two completely different medical care programs that (1) operate side-by-side, (2) offer completely different benefits, and (3) give them almost identical names!
While it is not the scope of this blog to make you a medical cost/payment expert, we would like you to come away with a broad understanding of the differences between the two medical insurance programs and, perhaps more importantly, know which one will afford you and your family the most real-world help.
Medicare
If you, or your ill loved one, is 65 years or older, look first to Medicare. However, Medicare is not the solution to long-term health care costs.
Here is the definition of Medicare, as stated on Medicare.gov, the official Medicare website: “… the federal health insurance program for (1) People who are 65 or older, (2) Certain younger people with disabilities, and (3) People with permanent kidney failure requiring dialysis or a transplant, sometimes called End-Stage Renal Disease.”
Sounds simple enough. And if you or your loved one is 65 years old or older, this is where you should begin. That said, Medicare has many, many benefits. Some pay for hospital stays. Some pay for doctor visits. Some pay for prescription drugs.
Some pay for medical equipment (like oxygen generators).
But to get the most out of Medicare (or any health insurance plan) you have to understand it. If you’re a do-it-yourselfer, here’s a link to the government’s Medicare website: https://www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices/whats-medicare. Everything you could want to know is here. But be warned: It’s complicated!
The bottom line on Medicare: Unless you become an expert, don’t try to unravel the rules and regs on your own. Seek out either a responsible Geriatric Care Manager (you pay them) or Elder Care Social Worker (usually no cost). Then, ask a lot of questions. Write down the answers. That will help you make good decisions when the time comes to make them. And remember this: Medicare will only pay for the first 100 days in a long term health care facility. It is not a good solution to long term nursing home costs.
Medicaid
Anyone can apply for Medicaid at any age. It is also government-sponsored health insurance coverage, but coverage is based only on a person’s income and assets. Medicaid is often the solution to long term care medical costs for folks who have no money or run out of money.
Here is a clear definition of Medicaid, as posted on Wikipedia:
“… a federal and state program that helps with medical costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, including nursing home care and personal care services.” Here’s a link to the official Medicaid website: https://www.medicaid.gov/ Again…. this stuff is extremely complicated, no matter where you get your information!
So… when folks run out of money… or for folks who never had money… Medicaid is one of the only paths open to them.
Folks with assets usually hire an attorney to help them apply for coverage (as I said, it’s a really complicated process when a person has some wealth to their name).
Folks who never had money and might be living off a pension often work with hospital or nursing home personnel who will help them get Medicaid coverage… often as they’re being discharged after a hospital stay. (There is no cost for this.)
The bottom line on Medicaid:
You can apply for Medicaid any time. But… if you or your loved one have any assets… you’ll have to ‘spend down’ those assets before Medicaid kicks in. Don’t wait until all the money is gone. Apply for Medicaid at the first hint of need. Nursing homes typically want a year or two of private pay money (see next item) to welcome a new guest. Without that ‘cushion’, your loved one will have to accept the first Medicaid bed offered. Not all Medicaid beds are created equal. It’s a sad reality.
Private Pay
This is the shorthand that means either (1) insurance you have paid for yourself and purchased on your own, with little or no government involvement, or (2) money you have accumulated during your lifetime.
If you’re young enough and healthy enough to qualify for long term care insurance coverage… and if you can afford it… this is one of the best ways to pay for long term care without shelling out all of your money in a few month’s time.
I can’t stress this enough: Make sure you know whether or not you… or your loved one… have long term care insurance coverage before the need arises.
Here’s why: Depending upon where you live in America, long term care costs a lot of money. In our neck of the woods:
Adult Home care can run to about $11,000/month;
Nursing Home care costs between $13,000 and $16,000/month, depending upon the caliber of the home itself;
Private aide care in a person’s own home can approach $25,000/month.
There is no one good solution to the cost of long term care in America. But thoughtful planning before the need arises can mitigate a lot of the pain.
Do your homework. Now. Speak with a credentialed financial advisor or Geriatric Care Manager… or approach an Elder Law attorney. They can help and so can I. Feel free to reach out to me using the e-mail address or phone numbers on this website. We always respond quickly.