How Medicare and Medicaid cover long-term care
Medicare and Medicaid. Their names are frustratingly easy to confuse or misstate. But when you’re navigating the emotionally charged (and expensive) waters of health care coverage later in life, the differences are essential. Medicare and Medicaid are very different in terms of how they cover long-term care, a term for the daily personal care and assistance that you might need if you have a chronic illness or disability or simply need more help as you get older.
Both programs were founded in 1965 under the Lyndon Johnson administration and remain subsidized by taxpayers today. But that is where the similarities end. Here’s a brief rundown of what these public programs have in common, and where they differ.
Who is eligible?
Medicare — attached to Social Security — provides health insurance for Americans 65 or older, as well as younger people with disabilities and people with end-stage renal disease.
Medicaid is a health care program offered to those with low income and assets, regardless of age, as well as qualified pregnant women and children, and people receiving Supplemental Security Income. Some state Medicaid programs also offer coverage for additional groups, such as individuals receiving home-based services or children in foster care who aren’t otherwise eligible.
Some people, often those in poor health requiring a high level of care, are “dual eligible” and can receive treatment under both Medicare and Medicaid. Dual eligible patients make up less than one-fifth of all Medicare and Medicaid beneficiaries but account for 27 percent and 39 percent of the respective programs’ costs.
Who is in charge?
Although both programs are overseen by the federal government, individual states run their own Medicaid programs. While state Medicaid programs do have to meet federal guidelines in order to receive federal dollars, there are many factors — from eligibility requirements to benefits provided — that can vary tremendously by location.
With Medicare, there’s generally more uniformity, and it’s easier to gather insights from friends and family who may have navigated the system, even if they live in another state.
How do you sign up?
If you’re already receiving Social Security benefits or certain disability benefits, you may be automatically enrolled for Medicare. Otherwise, you can simply sign up with Social Security online, starting three months before your 65th birthday.
Since Medicaid eligibility is determined by income and assets level, a more thorough screening process is required. Specifics vary by state.
Both programs (depending on the Medicare coverage selected) include most basic medical needs — hospital stays, doctor visits, and prescription medication. But when it comes to long-term care, what’s covered is quite distinct.
Medicare and long-term care
Medicare — despite the name — pays for long-term care only on a limited basis. Certain qualifying situations include:
- Post-hospital stays at skilled nursing facilities for up to 100 days. A co-payment is required for days 21 through 100.
- Home health services such as physical or occupational therapy with no set end date, provided a doctor prescribes continued care
- Medical supplies and equipment, including hospital beds, wheelchairs, and oxygen
- Hospice care, including respite care and grief counseling for loved ones
It’s important to note that Medicare does not cover what it calls “custodial care.” That means it doesn’t cover:
- Long-term nursing home stays
- Non-medical in-home care
- Adult day care
- Assisted living facilities, unless it’s a skilled nursing facility and is deemed medically necessary or following a recent hospitalization
Medicaid and long-term care
Medicaid, on the other hand, funds more long-term care than any other source. (The program paid for 51 percent of all long-term care spending in 2013.) To be eligible for ongoing long-term care services, you must qualify for your state’s Medicaid program and then meet additional financial requirements (showing that you have limited income and assets) and what Medicaid calls functional requirements (meaning you have a demonstrated need for help with things like bathing, dressing, eating, or using the toilet).
If you meet all of the requirements, long-term care services may be provided indefinitely. There are two different categories of care:
- Activities of Daily Living (ADLs), also known as custodial care: help with things like eating, bathing, dressing, getting in and out of bed, or using the toilet. This care can be provided at home or at a skilled nursing facility or assisted living facility, although many facilities do not accept Medicaid as a form of payment.
- Long-term nursing home care, although again, many nursing homes do not accept Medicaid as a form of payment.
To evaluate all of your potential options for care, it’s wise to consult with an elder law attorney who is familiar with federal programs as well as the regulations of your state. Health care is never simple — and gets less so with age — but finding an expert to guide you through the process can be the best place to start.
By Kate Rockwood