The Difference Between Medicare and Medicaid
In speaking with people about Medicaid, they will often refer to it as Medicare. Perhaps it’s just a slip of the tongue since the two words sound so similar. But, I think, there is very often a fundamental misunderstanding about the two programs. Medicare is the federally funded and state administered health insurance program primarily designed for those individuals over age 65, disabled or blind. But, here is where the common mistake lies. Medicare does not cover long term care.
Not that this is different from any employer sponsored health insurance program. It isn’t. What most don’t realize until they need long term care is that health insurance policies, Medicare included, do not cover custodial nursing home care. Medicare does cover skilled nursing care but only if you’ve got an illness or injury from which you can recover. The common illnesses which cause long term care stays, such as Alzheimers and Parkinsons, have no known cures. Medicare won’t help you. Which surprises many who are confusing skilled nursing care and custodial care.
In general, if you are enrolled in traditional Medicare, and you’ve had a hospital stay of at least 3 days, and then are admitted to a skilled nursing facility, Medicare may pay for a while. If you qualify, Medicare may pay the full cost of the nursing home stay for the first 20 days and can continue to pay for the next 80 days, but with a deductible of about $130 per day. Some Medicare supplement insurance policies will even pay the cost of that deductible so that in the best-case scenario, Medicare may pay up to 100 days for each “spell of illness.”
In order to qualify for this 100 days of coverage, however, the nursing home resident must be receiving daily “skilled care” and generally must continue to “improve.” (Note: Once the Medicare beneficiary has not received a Medicare covered level of care for 60 consecutive days, the beneficiary may again be eligible for the 100 days of skilled nursing coverage for the next spell of illness).
While it’s never possible to predict at the outset how long Medicare will cover the rehabilitation, from our experience, it usually falls far short of the 100 day maximum. It makes sense, since the recuperative abilities of an 80 year old are certainly not what they are for a 40 year old. But, even if Medicare does cover the 100 day period, what then? What happens after the 100 days of coverage have been used?
At that point, in either case, you’re left with paying the bills with your own assets or long term care insurance, or qualifying for Medicaid which does cover long term care but is a needs based program. That means you’ve got to meet certain income and asset limits, but if you were thinking Medicare was going to cover you, then you’ll be completely unprepared when it comes to long term care. And if you’ve been a frequent reader of this blog you know what happens when you’re totally unprepared for the prospect of long term care.