As you age, the odds of needing long-term care (LTC) increase dramatically and the cost of that care is high. Because most health insurance plans do not cover LTC, you may assume that turning to Medicaid or Medicare is an option. Although there are some similarities, Medicaid and Medicare are very distinct programs with different eligibility criteria and available benefits for those who qualify. Understanding the difference between the two programs is essential. Toward that end, an Essex Junction Medicaid planning attorney at Unsworth LaPlante, PLLC explains the difference between Medicaid and Medicare.
What Is Medicare?
Medicare is a federally governed and funded healthcare program for individuals who are over age 65, and for a select few under age 65. Medicare is what is referred to as an “entitlement program” because participants are entitled to benefits from the program without having to prove need. Instead, you will have effectively paid all your “premiums” for Medicare through Medicare payroll withholding during your working years. People younger than 65 may also be eligible for Medicare if they:
- Have received at least 24 months of Social Security disability benefits or a disability pension from the Railroad Retirement Board (RRB).
- Have permanent kidney failure and need routine dialysis or a kidney transplant.
- Have amyotrophic lateral sclerosis (Lou Gehrig’s disease).
Basic Medicare is free for those who qualify; however, the benefits available under Medicare come in four parts. Some of those additional parts require payment of a monthly premium. The four parts of Medicare are:
- Part A – Hospital care. Covers the cost of being in a medical facility.
- Part B – Covers doctors, medical tests, and procedures. 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. 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.
What Is Medicaid?
Medicaid is also a healthcare program funded by the federal government with supplemental funding from the states if they choose to provide that funding. Although the federal government oversees Medicaid, it is administered by the individual states. For this reason, the eligibility guidelines and benefits offered can vary by state. Furthermore, Medicaid is a “needs based” program, meaning that an applicant must demonstrate a financial need for the benefits offered by Medicaid. Although states may offer additional services and benefits, each state is required by the federal government to provide certain benefits to Medicaid participants, including:
- 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
Long-term Care Benefits under Medicare and Medicaid
Medicare does not cover LTC expenses except under very limited circumstances for a very limited time. Medicaid, on the other hand, will help pay for LTC expenses if you qualify for benefits. Qualifying for Medicaid, however, includes consideration of both your income and your assets. Non-exempt assets may need to be “spent-down” before you are eligible for Medicaid benefits if you need LTC. To protect your assets and ensure eligibility when you need it, include Medicaid planning in your estate plan when you are still young.
Contact an Essex Junction Medicaid Planning Attorneys
For more information, please attend one of our upcoming FREE webinars. If you have questions or concerns about Medicaid planning, contact an experienced Essex Junction Medicaid planning attorney at Unsworth LaPlante, PLLC by calling 802-879-7133 to schedule your appointment today.