Medicaid vs Medicare

The Differences Between Medicaid and Medicare Explained

Due to the similarity in name, people often get confused between Medicaid vs Medicare when planning for nursing home care. In this article, we will cover the differences between Medicaid vs Medicare to help you make the right decision with respect to getting the long-term care and nursing home coverage your loved one needs to qualify for.

medicaid vs medicare

Differences Between Medicare vs Medicaid

The biggest differences between Medicaid vs Medicare are how these two programs are funded, administered, and their purpose. Medicare is a federal health insurance program for individuals over 65 years old. Medicaid, on the other hand, is a jointly funded program between the federal and state government that provides health coverage to individuals with limited resources that need long-term care at a skilled nursing facility. To help you get a better understanding of Medicaid vs Medicare, we will go into more detail on each program in the following sections.

What Is Medicare?

Medicare is well known by many because it is the primary health insurance program for people ages 65+. Certain people are also eligible for Medicare if they have certain disabilities and are eligible for Social Security Disability (SSD). Since this program is both funded and administered by the federal government, the rules are the same throughout the entire country.

Medicare is made of 4 different parts. Medicare Part A provides inpatient/hospital coverage. Part B covers outpatient/medical coverage. Part C offers a different way to receive your Medicare benefits like an HMO or PPO. Lastly, Medicare D provides prescription drug coverage.

A common source of confusion with Medicare is whether or not it pays for long-term care.

Why?

Because Medicare does pay for SOME skilled nursing care, but only for 100 days if the stay in the skilled nursing facility is an extension of a previous hospitalization that Medicare paid for.

What does this mean?

Imagine that your mom had a slip and fall that required her to be hospitalized. Medicare Part A will cover her hospitalization. But let’s say the hospital determines that her recovery would be best suited in a skilled nursing facility where she can receive rehabilitation services related to her injuries so that she can make a full recovery. Medicare will cover her stay in the skilled nursing facility for up to 100 days because the stay is related to her initial injury that required hospitalization.

But what if your parent has an ailment like Alzheimer’s or has a stroke which will require constant care and a much longer duration in a skilled nursing facility than 100 days?

Medicare will not be a long-term solution to paying for long-term care.

But don’t worry, all is not lost.

This is where Medicaid can help…

What Is Medicaid?

It can be emotionally difficult for a family to receive a diagnosis that will require a loved one to receive care in a skilled nursing facility. This can be compounded by financial distress when the family realizes the cost of care in a long-term care facility.

In Michigan, the average cost of care in a skilled nursing facility is approximately $108,000 per year. This comes out to between $8,000-$9,000 per month. As you can see, paying for long-term care can quickly drain your financial resources.

What happens if dad has to go to a nursing home but mom doesn’t – will she have money to pay the bills to survive while also paying dad’s nursing home bills? Will the kids need to help?

Will you need to sell the family home or other large assets to cover the cost?

When mom and dad pass away, will there be anything left for the kids to inherit? Or will all of the finances be drained to pay for the cost of care?

These are real concerns for many people with aging parents and family members.

Fortunately, there is a solution…

Medicaid Can Pay For Long-Term Care With Proper Planning

Medicaid is a joint federal and state benefit program that pays for long-term care for seniors. Medicaid is actually the largest source of payment for long-term care in the US.

However, Medicaid has a means test, which means you need to be able to prove that you meet the income and asset limits in order to qualify for Medicaid to pay for your long-term care costs.

To qualify for Medicaid in Michigan, your income and assets need to be under about $2,000 in countable assets. This includes cash, savings, investments, or other financial resources that can be turned into cash. Assets that aren’t counted include your home, personal possessions and household goods, one vehicle, prepaid funeral plans, and some life insurance.

If you don’t currently qualify based on these criteria, don’t worry…

Proper Medicaid Planning with the help of a Medicaid Planning Attorney can help you legally structure your assets to qualify for Medicaid so that the government benefit pays for long-term care instead of you paying it out of your own pocket.

To learn more about Medicaid Planning, please click here to read our article about the benefits of Medicaid Planning in Michigan.

If you know you need Medicaid and you would like to apply, it is usually best to work with a Medicaid Attorney to determine your eligibility due to the complexity of the law, application process, and the legal steps necessary to structure your assets to qualify.

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Because every Medicaid Planning situation is different, we offer a free initial consultation with a Medicaid Planning Attorney to help you determine if Medicaid Planning is right for you.

The initial consultation gives you the opportunity to help you understand your current Medicaid eligibility. It also gives us a better understanding of how we can help you plan to protect your home and life savings from nursing home costs while getting you the benefits you need to pay for care.

To book your free consultation, call us now at (248) 613-0007 and tell our friendly receptionist that you would like to book a consultation for Medicaid Planning. She will book you for the time that works best for your schedule.

We look forward to hearing from you!

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