This is a question we receive often. Navigating the maze of healthcare coverage can be confusing. For starters, a brief overview of the programs will help to demystify and clear some of the confusion. Medicare is a federal government program first implemented in 1965 as part of the Social Security program to provide health coverage to persons 65 or older and in some cases younger so long as they can show a qualifying disability.
Coverage through Medicare is broken down into sections, Part A is considered hospital insurance and covers inpatient hospital care, rehabilitation in a skilled nursing facility, hospice services, lab tests surgery and home health care. There is no premium for Part A provided you or your spouse have worked at least forty quarters and paid into the program. It is important to note that the coverage for skilled nursing is limited to the first twenty days in full and then there will be a co-pay of $167.50 per day for days twenty-one through one hundred. A person must continue to qualify based on their skilled need throughout the hundred-day period for Medicare to continue cover. There is no guarantee that a person will receive all hundred days of coverage.
Custodial care and extended stays will not be covered by Medicare. Part B covers doctors and other health care providers’ services and outpatient care. The monthly premium for Part B is typically $134.00 but can vary depending on the person’s income. Part D provides cover with respect to prescription drugs. This is a stand-alone drug plan that can assist in reducing prescription drug costs. Finally, Medicare Part C, is also known as the Medicare Advantage which are optional plans offered by Medicare-approved private companies which replace Medicare Part A and B.
Unlike Medicare, Medicaid is a means tested program and is state specific. Medicaid can provide coverage for a personal care aide at home through the Community Medicaid program or can also cover an extended custodial stay at a skilled nursing facility through the Chronic Medicaid program. In order to be financially eligible to receive services at home, an applicant for Community Medicaid cannot have liquid non-retirement assets in excess of $15,150.00. Also exempt is an irrevocable pre-paid burial, retirement assets in an unlimited amount so long as the applicant is receiving monthly distributions and the primary residence. With respect to income, an applicant for Medicaid is permitted to keep $837.00 per month in income plus a $20.00 disregard. However, where the applicant has income which exceeds $862.00 threshold, a Pooled Income Trust can be established to preserve the applicant’s excess income. Even though there is a resource limit of $15,150.00, there is no “look back” for Community Medicaid. In other words, both the income and asset requirements can be met with a minimal waiting period allowing families to mitigate the cost of caring for their loved ones at home.
With respect to coverage in a nursing facility, Chronic Medicaid can cover an extended custodial stay at a nursing facility. In New York, an applicant applying for Chronic Medicaid will be required to provide a sixty-month look back with respect to all financial records, including bank statements and tax returns. Unlike Community Medicaid, an applicant for Chronic Medicaid will be penalized for any monies transferred out of the applicant’s name during the sixty-month look back except for transfers to exempt individuals, including to but not limited to spouse or disabled child. If your loved one requires long term nursing home placement, it is imperative to consult and Elder Law attorney in your area to discuss how to preserve the maximum amount of assets.
Medicare and Medicaid are both invaluable programs that can be used to cover various medical and custodial expenses. Understanding the difference and what each program covers will allow you to be an advocate for yourself or a loved one.
- Nancy Burner, Esq.