Medicaid and Medicare are the two primary healthcare programs available to assist seniors with medical expenses. Unfortunately, their names are very similar, so it causes a lot of confusion.
In this article, we will try to reduce some of that confusion by summarizing the main differences between the Medicare and Medicaid programs for seniors. In addition, we’ll address each program’s approach to helping seniors with nursing home costs.
More specifically, we will answer the following questions:
- What is Medicare?
- What is Medicaid?
- Which one pays for a nursing home?
- What does Medicare cover when it comes to nursing care?
- What does Medicaid cover for nursing care?
- What other options are there to pay for a nursing home?
- How can the Elder Care Advisors at Edwards Group help you or your loved ones when it comes to Medicare, Medicaid, and paying for a nursing home?
What is Medicare?
Medicare is a federal health insurance program. It works like auto or home insurance: Medicare pays for medical bills from trust funds that contributing individuals paid into over time.
Medicare generally helps those over 65 years old, regardless of their income status, to pay for doctors, hospital stays, and prescriptions.
The Medicare health insurance program has two parts:
- Part A – Hospital Insurance
- Part B – Medical Insurance
Most people apply for Part A and Part B coverage at the same time.
Monthly premiums and deductibles may be required.
If a person or their spouse paid into the Social Security system for 10 or more years, they are eligible for premium-free Part A insurance. If a person paid into the Social Security system for fewer than 10 years they can buy Part A coverage.
Everyone who participates in Part B pays a monthly premium for that insurance.
Medicare Advantage Plans, or Part C plans, are offered by private Medicare-approved companies. These plans include both Part A and B coverage and may offer extra coverage, including for long-term care. Each Medicare Advantage Plan has different requirements and out-of-pocket costs, and these can change annually.
When you see the term “Original” Medicare, it means the program managed by the federal government – not the Medicare Advantage programs offered by private companies.
You can read more about Medicare eligibility here.
What is Medicaid?
Medicaid is a need-based assistance program that requires local, state, and federal government cooperation. Oftentimes, because of the exorbitant cost of nursing home care, this is the only option for seniors to get the care they need as they age.
Get more details on how Medicaid may help with nursing home costs in our case study.
Medicaid exists to help individuals of any age, including seniors, with their medical expenses.
Medicaid generally covers the full cost of medical expenses for its participants. Small co-pays may be required.
Because the Medicaid program is run by state and local governments but within federal guidelines, Medicaid coverage and requirements can vary from state to state.
Learn about your state’s Medicaid eligibility here.
Coverage for Nursing Home Costs
Many seniors will stay in a rehabilitation, skilled nursing, or long-term care facility at some point. So, how will Medicare and Medicaid help in each of these cases? This can be very confusing because both programs can help cover long-term care costs in different situations.
Medicare and Nursing Home Coverage
Medicare benefits for nursing homes vary depending on the kind of nursing facility care that is required, the length of stay, and whether those with Medicare Advantage plans have any special coverage.
Medicare Part A covers medically necessary inpatient “rehab” in a specialized facility. Your doctor must certify that it is medically necessary. Part A participants pay a deductible based on the length of time they use the benefit. See the current deductibles and benefit periods here for inpatient rehabilitation.
Skilled nursing facility
Medicare Part A covers skilled nursing facility care if certain conditions are met, including a qualifying hospital stay. The first 20 days are at no cost, but coinsurance kicks in after that. The participants pay full costs after 100 days of care. See the current deductibles and benefit periods here for skilled nursing facilities.
Want to read more about the 100 day Medicare benefits? Check out this post from Elder Law Answers.
Generally, Medicare does not cover the non-medical (daily living) costs of long-term nursing home care. In some cases, Medicare will cover limited and medically necessary skilled care at a nursing home or in your own home.
Medicare Advantage Plans (Part C) or other Medicare Health Plans may include nursing home care through contracts with specific nursing homes. If you are a Part C participant in Medicare, ask if your plan includes nursing home care and where.
Medicaid and Nursing Home Coverage
Medicaid pays a considerable portion of nursing facility bills for low-income people as long as the services take place in state-licensed and certified Medicaid Nursing Facilities.
Sometimes, Medicaid is used at the point when a family has exhausted its Medicare and private resources. Oftentimes, because of the exorbitant cost of nursing home care, Medicaid is the only option for seniors to get the care they need as they age.
What other options could help me cover nursing home (long-term care) costs?
In general, seniors should not expect Medicare to cover the considerable and ongoing costs of long-term (nursing home) care. And, Medicaid support is only available to those seniors who qualify as low-income, though this option is available to more people than you might think through legal resources such as trusts.
Other options that may help seniors pay for long-term nursing home care, can include:
- Private (“out of pocket”) resources
- Long-term care insurance
- VA Aid & Attendance for Veterans who served during wartime
How can Edwards Group help?
Our Elder Care Advisors help families every day to tackle the financial, legal, and care challenges that come with getting older. The best first step is to call us at 217-726-9200 and ask to schedule a free phone assessment with one of our Elder Care Advisors. They will be more than happy to chat with you!