Medicare is the federal program that provides health insurance for those 65 and older, as well as for younger people who are disabled. Medicaid is the federal program, administered by each state according to the state’s own set of rules, which pays for medical care for low income individuals who are aged, blind or disabled. Medicare is an insurance program, while Medicaid is a welfare program.
Too often, people mistakenly believe that Medicare will pay for nursing home costs if a senior requires long term care. Medicare does provide a benefit for skilled nursing care, but it is a very limited benefit. If a patient is hospitalized for a period of at least three days under a stay covered by Medicare, is discharged to a nursing home within 30 days after the hospital discharge, and requires daily skilled nursing or rehabilitation services, then Medicare will provide coverage for up to 100 days. It will pay the first 20 days in full, but then there will be a copayment required from the patient for days 21 through 100. After 100 days, Medicare will no longer provide coverage.
Medicaid is the program that pays for long term nursing home care. To qualify for Medicaid, the applicant must meet asset and income tests. In Georgia, an individual is allowed to have $2,000 in assets. If the applicant is married, the non nursing home spouse, called the “community spouse” is allowed to have an additional $119,200 in 2015. Some assets, such as a primary residence, are exempt, but are subject to recovery by the state after the Medicaid recipient’s death. The income cap for 2015 is $2,199 a month. An applicant can qualify for Medicaid even if the income exceeds the cap amount, by using a special trust called a Qualified Income Trust or a “Miller” Trust.
It is possible to protect and preserve hard earned assets from being completely spent down on nursing home costs, but doing so requires careful planning that takes into account the limitations of Medicare and the rules for Medicaid qualification.
If you’re looking for an expert in helping you plan and protect yourself once you or your loved ones are in retirement, then we invite you to contact our office and schedule an appointment today. We can help develop the right estate plan for you and your needs to make sure you will be protected.