Medicare and Medicaid…the words sound similar, but they have two different meanings. How can you tell which is which? Is there a difference between them? Both are government programs that assist with health care costs. At Hill & Kinsella, many of the people we see come in with questions pertaining to either Medicare or Medicaid. Often, they are confused as to the difference between the two. Someone may initially contact our office with questions about Medicare, and during our meeting, we help them realize they actually had questions about Medicaid.
What’s the Difference Between Medicare & Medicaid?
Many people believe that Medicare and Medicaid are interchangeable terms that mean the same thing. “We don’t need Medicaid because we have Medicare.” “My mother was admitted to a nursing home, we need to apply for Medicare.” We hear statements like this frequently. Sometimes it is phrased as a question such as, “My mother is in a nursing home, how can we apply for Medicare to get her bills paid?”
The words “Medicare” and “Medicaid” sound similar; and they are easy to mix up! Sometimes, people do not know there is a difference between the two programs. Some people realize there is a difference but do not entirely understand what each program is and what each program offers.
The difference between Medicare and Medicaid is extremely important for our clients because one program will assist with paying the costs of long-term care, while the other will not. One is earned, while the other is unearned. Or said differently, one depends on an individual’s work history while the other depends on financial considerations.
What Is Medicare?
Medicare is a federal health insurance program under the Social Security Administration. It is administered by the Center for Medicare and Medicaid Services (CMS) and is health insurance for individuals 65 or older, individuals under 65 with certain disabilities, and individuals of any age with end-stage renal failure. To be eligible for Medicare an individual must be receiving Social Security income.
Medicare Parts Explained
There are different parts to Medicare that each cover specific services. Traditional Medicare consists of Part A, Part B, Part C, and Part D:
Medicare Part A
For Part A, there is no monthly premium; it is free for individuals that paid Medicare taxes for 40 or more quarters. Individuals that do not qualify for Part A because they did not work enough quarters will be required to purchase Part A by paying a monthly premium. Part A is hospital insurance and will cover inpatient care at a hospital or skilled nursing facility. Part A will not cover custodial or long-term care in a skilled facility. For that type of care, individuals are required to pay privately or seek assistance through programs such as Medicaid. Medicare Part A will also cover hospice and some home health care.
Medicare Part B
Medicare Part B is considered medical insurance and will cover doctors’ visits and outpatient care or services. Part B is considered to cover medically necessary services as well as preventative services and will also cover things such as ambulance services and durable medical equipment.
Like Part A, Part B will not cover long-term care. There is a monthly premium that must be paid for Part B, which if chosen, is automatically deducted from the individual’s monthly Social Security benefit. In addition to long-term care, Part A and Part B do not cover vision, hearing, and dental services.
Medicare Part C
Also known as the Medicare Advantage Plan, Medicare Part C is another option for individuals and serves as an alternative to Parts A and B. The Medicare Advantage plans are administered by private insurance companies that are approved by Medicare. There may be premiums for these plans that are set by the insurance company.
Individuals enrolled in one of these Advantage Plans will have their Part A and Part B services provided by the plan. These plans may offer extra coverage for services including vision, hearing, and dental, which are not covered by Traditional Medicare. It is important to understand that Medicare Part C was a cost containment concept of the Federal Government. We often find this kind of plan is cost-effective for the healthy but not necessarily for the sick.
Medicare Part D
Medicare Part D is considered the Prescription Drug benefit. This is an optional program available to anyone who has Medicare. It is designed to assist individuals in paying for prescription drugs. There is usually a premium for Part D.
What Is Medicaid?
Medicaid is a joint federal and state program that provides health coverage for eligible individuals. Another point of confusion is Medicaid, like Medicare, is administered by CMS. Each state sets its own guidelines regarding the eligibility requirements and services provided that must be approved by the Federal Government. There are no premiums for Medicaid because it is a “means tested” public benefit program. This means that individuals must qualify for Medicaid by satisfying certain financial requirements.
Florida has what is known as Statewide Medicaid Managed Care (SMMC), which is administered through the Agency for Health Care Administration. There are different parts of the SMMC in Florida; for purposes of this article, we will discuss only the Long-Term Care program.
Florida’s long-term care Medicaid program is designed to assist individuals in need of long-term care services such as nursing home care, assisted living care, and even home health care. Here in Florida, eligibility for long-term care Medicaid is determined by the Department of Children and Families (DCF).
At our office, we break the eligibility requirements into four categories:
- Level of Care
Most of the families we meet with are concerned with Medicaid’s financial eligibility requirements. While assisting our clients with their financial eligibility concerns, we also stress the importance of understanding Medicaid’s non-financial requirements for eligibility.
Basic Medicaid Requirement
Medicaid’s basic requirements require that applicants be 65 or older, blind, or disabled. Additionally, an applicant must be a United States Citizen, Florida resident, have a Social Security number, and be able to provide proof of identity.
Level of Care Requirement
Satisfying the level of care requirement is also an extremely important part of eligibility. Simply put, an applicant must meet the level of care requirement for the services they are requesting. For example, if an applicant is applying for Nursing Home Medicaid, they must require the level of care provided in a nursing home. The applicant’s level of care is determined by the Department of Elder Affairs’ CARES unit.
After the submission of an application, the Department of Children and Families will review the applicant’s financial information and determine whether the financial requirements are satisfied. Florida is what we refer to as an “Income Cap” state. Florida’s Medicaid rules are very inflexible, if an applicant’s income exceeds the maximum allowable amount per month (even if only by one dollar) they will not be eligible for Medicaid. Applicants with income over the limit must establish a Qualified Income Trust before they can be considered eligible.
An applicant will not be eligible for Medicaid if they have assets that put them over Medicaid’s asset limit. There are strict limits on how much an individual, and if applicable, their spouse can have. Whether or not someone is over the asset limit depends on several different factors such as the value of the asset or whether assets are countable or non-countable.
During our office consultations, our experienced elder law attorneys go over these financial requirements and assist with determining which assets count and which assets will not count.
Moreover, our attorneys specialize in putting plans in place to assist applicants with satisfying Medicaid’s financial eligibility criteria. The Medicaid application process can be somewhat stressful and difficult to navigate and clients find it extremely helpful to have guidance through the process.
Consult with Our Experienced Elder Law Lawyers Today
This article only skimmed the surface of Medicare and Medicaid; there is much more to each. We at Hill & Kinsella have dedicated and seasoned elder law attorneys to assist in answering your questions and navigating the often-turbulent waters of Medicare and Medicaid. Please reach out to us to schedule a phone appointment!
To speak to a friendly legal professional at our firm, give us a call today at (727) 240-2350.