Medicare vs. Medicaid: What’s the difference?
The difference between Medicare and Medicaid is important, because Medicare doesn’t pay for nursing home care, except in limited short-term rehab situations. Medicaid is the only government program that will pay for long-term skilled residential care or nursing home care. Both programs offer medical care or health care reimbursement, but they serve different groups of people, and the implications for nursing home care, financial planning and elder law issues differ dramatically.
Medicare is similar to standard health insurance for people over 65 years old. If you are over 65, there is no asset or income test in order to qualify for Medicare. People who become disabled for Social Security purposes, will qualify for Medicare 2 years after the date of their disability, regardless of age. There are different plans and levels of coverage offered under Medicare with monthly premiums that vary accordingly. However, after Medicare provides its benefit, that is the end of the Medicare transaction. Medicare will not seek repayment for medical services that it covered for the Medicare participant.
Medicaid, now known in Missouri as MO HealthNet, is need-based, and there is an asset/income test to be eligible to receive benefits from the program. Medicaid is run by the Department of Social Services. This program also has an estate recovery mandate, which means that the State will seek to recover or collect the entire cost of benefits it has paid for a participant. This program is like a cab – you get in and the meter starts ticking. Once you qualify and Medicaid, or MO HealthNet, starts paying for your health care or nursing home fees, Medicaid will be keeping a running tab or bill for you. Medicaid keeps a record of everything they have paid out on your behalf, calculating the total sum of the medical bills/benefits paid by the State for your care.
After a Medicaid participant dies, the bill comes due – the State files a claim against the participant’s estate for reimbursement for everything it has paid out for the recipient during their lifetime. These are known as Medicaid’s estate recovery provisions; this recovery program is mandated by the federal Medicaid laws. There are many rules, strict procedures and exceptions regarding how and when the State can recover. Our lawyers know the rules, and we can help plan to avoid or fight the estate recovery. There are steps that can be taken to maximize what the family gets and minimize the State’s recovery. If you would like to learn more about planning for long term care, contact us today.