Two weeks ago, we looked at the different levels of long-term care. Last week, we explored how long-term care is paid for, including private pay, long-term care insurance, and Medicare. This week: From Nursing Home Medicare to Medicaid.
Medicare and Medicare Supplemental Insurance: After a stay in the hospital for at least three days, if a patient’s medical condition requires either 1) rehabilitation through physical, speech, and/or occupational therapy, or 2) skilled nursing care on a daily basis, upon discharge to a nursing facility, Medicare will pay for 100 percent of the costs incurred during the first 20 days. Should the patient continue to benefit, Medicare will cover all expenses for up to the next 80 days except for a $124 per day co-payment.

An appropriate Medicare supplement policy will cover the co-payments, or they will be paid by the individual. However, should Medicare stop paying during those last 80 days, payments by the Medicare Supplemental insurance will also stop, and the patient will then either pay privately, use long-term care insurance, or qualify for Medicaid.

Medicaid, a cooperative state and federal program, is the final source of payment when there is nothing else to provide medical assistance to designated classes of medically needy individuals. The federal side of Medicaid is handled by The Centers for Medicare and Medicaid Services (CMS), while Medicaid is administered for the federal government in each state by Departments of Health and Human Services (HHS).

In order to participate in Medicaid, each state must provide eligibility to mandatory categories of individuals for certain basic medical services – including long-term care. Once the minimum standards are met, the states have the flexibility to either expand Medicaid eligibility to additional groups and/or expand coverage to include enhanced services. Each state’s Medicaid Program can be found in a “State Plan” that must be “blessed” by CMS. Medicaid is funded by both federal and state monies based on ratios that vary from year to year and from state to state.

While Medicaid will pay the total cost of nursing home care, medical care, and prescriptions for eligible nursing home residents, there are disadvantages: 1) The application process can be time-consuming and difficult; 2) there are restrictive asset and income limits for both married and unmarried individuals that vary depending on the state of residence; 3) Gaining admission to a nursing facility with Medicaid as the pay source may be difficult; 4) A facility chosen by the family may not accept Medicaid; 5) There may be fewer quality-of-life benefits available to Medicaid recipients, such as private rooms; and 6) Quite obviously, the private pay patient will have more options than his or her Medicaid counterpart.

Even though the financial qualification standards vary from state to state and will depend upon marital status, generally speaking, the institutionalized individual will be left with little extra spending money each month. At death, the assets that did not count for Medicaid qualification during life – like the family home -- could well be subject to a “recovery” program after death whereby the state seeks repayment for what has been advanced.

To qualify for Medicaid, 1) you must be either a United State citizen or have been admitted lawfully to this country; 2) you must be a resident of the state in which you apply; 3) you must provide a Social Security Number or apply for one; 4) You must assign your rights to medical benefits or support to the State and cooperate in securing benefits; and 5) You must apply for any benefits to which you may be entitled.

Next Week: More About Medicaid.