Almost all Floridians over age 65 are familiar with Medicare - as the primary source of health insurance for all Americans over age 65. While many are familiar with Medicaid as well - as a health-insurance program, there is a largely-unknown long-term-care component that will pay for nursing home though it’s ICP (institutional care program) or a significant portion of ALF care or home-health care through the Florida's home and community based Medicaid program (also referred to as Medicaid Waiver or SMMC-LTC).
Sifting through Medicare Supplements and Medicare Advantage Plans is a daunting task that usually requires the help of an experienced senior focused health insurance agent.
Medicaid has been called among the most complex and convoluted areas of law. Due to the archaic nature of these laws, specialists known as elder law attorneys became necessary to guide the lay person.
An initial area of confusion involves the differences between Medicare and Medicaid. Many people erroneously believe that Medicare will take care of them in their old age. As I will detail below, the harsh reality is that Medicare does not provide adequate coverage for long-term care costs.
But, lets start with exploring some of the basic differences between Medicare and Medicaid in Florida.
Medicare vs. Medicaid
Medicare is an entitlement-based program. One is entitled to Medicare if a legal resident of US for at least 5 years AND
- 65 years+ or has received SSDI for 24 months; AND
- must have paid into system for 40 quarters.
Four Main Parts to Medicare
There are four main parts to Medicare:
- Part A: Hospital/Hospice Insurance (automatic, everyone gets if paid into system for 40 quarters)
- Part B: General medical insurance (pay a premium - $174.70 / mo in 2024 for those who earn less than $103,000.00 a year). Must elect at 65 or be penalized for the lifetime (10% increase in premium per year you did not sign up for Part B Medicare when you could have) unless the senior citizen is otherwise fully insured.
- Part C: Medicare Advantage (pay a premium – depends on the plan). This is an HMO. Medicare Part C is elected instead of Part A & B and typically provides more services, including prescriptions. Usually covers the 20% not covered subject to co-pays/deductibles.
- Part D: Prescription Drugs (pay a premium). Enrollee pays deductible (no higher than $505.00, depending on the plan as of 2023), then 25% up to a maximum out of pocket of $7,400.00 (could be less depending on the plan).
Medicare Supplements: If getting Part A and B (which will only cover 80% of medical bills), the supplement will cover other 20% (for a premium). Medicare Supplement Plans are also referred to as "Medigap".
Medicare Does Not Pay Long Term Care Costs:
That's not exactly true. I should say that Medicare pays very little for long-term care costs.
What Does Medicare Pay for Long Hospital Stays?
In reality, the closest Medicare gets to Long-Term Care coverage is: Medicare pays for up to 150 days of hospitalization (as of 2023): The first 60 days will cost about $1,632.00 (this is the initial deductible for each coverage period), over the next 30 days, a higher co-pay responsibility of $408.00 per day will kick in. For days 91-150, there is an $816.00 per day co-pay. A Medicare Supplement or Advantage Plan may offer less-expensive daily co-pays.
After day 150 in the hospital, Medicare stops paying.
What Does Medicare Pay for Rehab or Nursing Home or Long-Term Care Facility Stays?
After a three-day hospitalization, Medicare pays for a maximum 100 days of rehab or nursing home care (the patient needs to have been admitted to the hospital for two midnights). Upon meeting this qualification, Medicare will pay 100% of the LTC costs for the first 20 days; for the next 80 days, a $204.00 per day deductible applies (Medicare supplement + Medicare Advantage may cover this, but a Medicare advantage plan is an HMO and they would direct you to the facility of their choice, not yours). Further discussion on the difference between Medicare Advantage vs. Medicare Supplement below.
Note that, you can have the best Medicare Supplement on the market, and it still will NOT pay for rehab / nursing home / or long-term facility care after 100 days.
The Two Midnight / Three Day Hospitalization Issue:
Beware that you or your loved one must have been actually ADMITTED for two nights. Sometimes hospitals will put their patient "under observation" which looks a lot like being admitted because the patient is given a bed in the hospital. But being held for observation is not the same as admission. Our Elder Law firm educates our client’s family members to ask these kinds of questions, to be bold and ask a hospital administrator: "why aren't you admitting my mother?"
Medicare often cuts off after 45 days (about). Facilities don't want to be penalized for over-utilization. The long-term-care facility must provide you with 2 days written notice of discharge. As an elder-law attorney, we also educate you on how to go to the director of nursing and advocate for your loved one, and get the 100 days the patient requires: Not just to MMI, but to help maintain MMI. If client cannot do it, then our firm, as your elder-law attorney can get involved. If still no resolution, one can appeal where patient will not be kicked out. But if appeal is lost, patient owes full amount of disputed days.
What is the Best Medicare Plan to Get?
While we are Medicaid planning attorneys (and Medicare is not our specialty), we get this question so often, it bears discussing here. In fact, we have associated with a well-respected senior-focused Medicare insurance expert to help address these issues (click link to read full disclosure).
For health insurance, if you can afford it, look into obtaining: Part A, Part B and a good Medicare Supplement policy. Medicare Advantage is not as good because Advantage programs are essentially an HMO with limited coverage areas – so with Medicare Advantage, the insured might not be able to see the specialist they want when they get sick. The upside of Medicare Advantage is it involves a lower cost to the insured - and is almost always better than Medicare Part A and B alone.
One can only change Medicare plans at certain times. Medicare open enrollment is October 15 to Sept 7th to change to Part C. Change from Part C back to traditional Medicare during Medicare Advantage Disenrollment Period - Jan 1 through Feb 14th.
Since Medicare does not cover more than 100 days of nursing home or other long-term care, it becomes important to work with a Medicaid professional who can help you legally and ethically qualify for Medicaid’s lesser known Institutional Care Program (referred to as Medicaid ICP). Substantial Medicaid planning may be necessary to qualify for Medicaid ICP coverage.
Medicaid is not an entitlement like Medicare. Medicaid also offers a much more robust and valuable long-term care benefit that simply does not exist within the Medicare system.
But Medicaid requires a level of poverty and disability. There is a need to protect the elderly against the immense expenses associated with long-term care. Medicare does not pay long-term care expenses. If long-term care insurance has not been purchased (less than 10% of the population has this insurance), the elderly either need to pay out of pocket (roughly between $80,000 and $120,000 per year) or qualify for Medicaid after the 100-day Medicare benefit has been exhausted.
Medicaid's Long-Term Care Benefit
Medicaid has two different programs that can help pay for long-term care, depending on where my client wants to receive their long-term care services:
Institutional Care Program - For Nursing Homes
When your Elder Law Attorney qualifies you, or a loved one, for the Medicaid Institutional Care Plan (ICP) Benefit. ICP Medicaid in Florida is for those who are in a rehab / skilled nursing / long-term care facility.
Medicaid pays the full nursing home bill, less my client's income. If my client is married, it is possible to divert a portion of the nursing home resident's income to the spouse if needed to cover the community spouse's normal daily living expenses.
Florida must provide ICP Medicaid to anyone 65+, blind, or disabled who needs skilled nursing facility services and qualifies financially.
Medicaid Waiver Program - For ALF or Home Health Care
For those who prefer to receive care in an Assisted Living Facility (ALF), Medicaid may be available to pay for a portion of the ALF bill (usually around $1,500 - $1,875 per month depending on which part of Florida).
Many of my Florida clients want/need help paying for care at home, the Medicaid Waiver program is also worth exploring.
This portion of our law practice is centered around the steps to take to qualify our clients for Medicaid while protecting and preserving the Medicaid-applicant’s assets so they can provide for their spouse and loved one’s or heirs.
To read more about the differences between Medicare and Medicaid, click the link or check out the video below:
Medicaid is a federal and state-based program. Your Elder Law Attorney needs to be familiar with state Medicaid rules Florida’s ESS Medicaid manual can be found at the link.
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