While many are familiar with Medicaid as a health-insurance program, there is a largely-unknown long-term-care component that will pay for nursing home and community-based care though it’s ICP (institutional care program). Typically those qualified for Medicaid will be able to cover all of the costs associated with skilled nursing home care and some home health care and some assisted living care. 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.
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
• Part A: Hospital/Hospice Insurance (automatic, everyone gets if paid into system for 40 quarters)
• Part B: General medical insurance (pay a premium - $104.90 / mo in 2015). Must elect at 65 or be penalized for the lifetime (10% increase in premium per year not elected) 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). Pays initial deductible ($325.00), then 25% up to a certain amount. Then pays a higher percentage of another threshold up to yet a third threshold when the patient pays only 5%. The coverage between 2nd and 3rd threshold is called the "donut hole."
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). This will also referred to as Medigap.
Medicare Does Not Pay Long Term Care Costs:
That's not exactly true. In reality, the closest Medicare gets to Long-Term Care coverage is: Medicare pays for 90 days of hospitalization: The first 60 days will cost about $1,200.00, over the next 30 days, a higher co-pay responsibility will kick in.
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 $160.00 per day deductible applies (Medicare supplement + Medicare Advantage would 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.
• 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. 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. 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 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 ICP Benefit
When your Elder Law Attorney qualifies you, or a loved one, for the Medicaid ICP Benefit, Medicaid pays the full nursing home bill. ALF or other community-based care will be paid for by Medicaid, less a "patient responsibility" amount. Florida must provide ICP Medicaid to anyone 65+, blind, or disabled who needs skilled nursing facility services and qualifies financially.
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.
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 here: http://www.myflfamilies.com/service-programs/access-florida-food-medical-assistance-cashprogram-policy-manual.
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