Medicare vs. Medicaid: Strategic Planning for Long-Term Care Costs
Without a doubt, one of the biggest dilemmas that families face when preparing for the later years is how to pay for long-term care support. Many people assume that Medicare will be available to cover the costs of nursing homes or extended care, only to find out too late that is not the case. It is important to understand the difference between Medicare and Medicaid to make proper long-term care planning decisions.
Understanding Medicare coverage
Medicare is a federal health insurance program for people aged 65 years and older. It covers inpatient care, doctor visits, and other medical services. Nevertheless, the long-term care component of Medicare is hardly adequate. It can be used to pay for short-term skilled nursing care, which will be recommended as a follow-up to a hospital stay.
Medicare does not cover custodial care, which involves things such as bathing, dressing, and feeding. These types of services are needed by most people who move into assisted living facilities or nursing homes. Thus, Medicare cannot by itself take care of the costs associated with long-term care.
What Medicaid covers and why it matters
Medicaid is a collaboration between the federal and state governments to provide financial assistance to people with low income and assets to pay for medical and long-term care. Unlike Medicare, Medicaid covers extended stays in a nursing home facility or home care.
Medicaid is considered a needs-based program, and it requires all applicants seeking its services to meet certain financial requirements before they are eligible. Many individuals often believe that they will have to spend all that they have before they can benefit from Medicaid. The truth is that there are asset tests; however, there are also ways of ensuring that individuals are eligible while retaining certain assets.
The importance of timing in Medicaid planning
The role of timing in Medicaid planning cannot be ignored. In this context, Medicaid also has a “look-back period” where all economic transactions made before qualification are analyzed. In case of improper transfers or gifts, it may cause complications in qualification. Planning ahead helps to understand legal alternatives.
Sometimes it is only when there is a health crisis that options are limited. More options may be available when planning well in advance.
Common misconceptions about long-term care coverage
Among the major misconceptions is that Medicare automatically changes to Medicaid. This is not the case, as Medicare and Medicaid follow different guidelines and application processes. As such, another major misconception is that planning for Medicaid is only applicable to those with very few resources remaining. This is not the case, considering that many middle-class families may require planning before spending all their funds on caregiving costs.
Talk to a Virginia Beach, VA, Elder Law Attorney Today
The Law Office of Angela N. Manz represents the interests of Virginia residents who want to pursue Medicaid. Call our Virginia Beach elder law medicaid planning attorney today to schedule an appointment, and we can begin discussing your next steps right away.