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Planning for Long-Term Care: Medicare vs. Medicaid

Medicare and Medicaid can both play a role in your long-term care plan, but there are some key differences to understand.

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Planning for Long-Term Care: Medicare vs. Medicaid

What’s the Difference?

Both programs offer medical care, but here’s the scoop:

  • Medicare is an entitlement program. If you’re 65 or older and qualify for Social Security, you’re eligible for Medicare.
  • Medicaid is a public assistance program. It’s designed for people with limited income and assets, and you need to meet certain financial criteria to qualify.

Who Runs the Show?

  • Medicare is run entirely by the federal government.
  • Medicaid is a joint federal-state program. Some states have their own names for it, like Medi-Cal in California and MassHealth in Massachusetts. Generally, the federal government funds about half of a state’s Medicaid program, and the state covers the rest. Eligibility rules can vary by state, but they all follow federal guidelines to get the funding.

Long-Term Care Coverage

  • Medicare: Doesn’t cover long-term nursing home care. Medicare Part A might cover up to 100 days in a skilled nursing facility, but only if you’ve spent at least three days in a hospital first. From day 21 to day 100, there’s a daily copay of $167.50. Few people get the full 100 days of coverage due to these costs and strict conditions.
  • Medicaid: Covers long-term nursing home care if you meet certain income and asset limits, whether you need care for 100 days or several years. Due to the high costs of nursing home care and the limitations of Medicare, Medicaid has become the largest payer for nursing home stays in the U.S. In addition to nursing home care, several states, including Florida and New York, also provide Medicaid assistance for long-term care services provided in the home.

Do You Qualify for Medicaid?

If your income and assets are below your state’s guidelines, you’re eligible. If not, you’ll need to plan carefully to become eligible. An elder law attorney can help you navigate this.

Watch out for the look-back period! Medicaid reviews any gifts or asset transfers made within five years of your application. If you’ve transferred assets, you could face penalties delaying your benefits. The penalty period is based on the amount transferred divided by your state’s average cost for private nursing home care. An elder law attorney can guide you through this process to ensure you get the assistance you need as quickly as possible.

In Conclusion 

Medicare might help with short-term nursing home stays, but for long-term care, Medicaid may be the way to go if you qualify. With early and proper planning, you can get Medicaid to cover your long-term care and protect your assets. Reach out to an elder law attorney to discuss your options and secure your future.

–Kaleem Sikandar, Esq. and Joseph Giambrone, Esq. 

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