If you are like most people, you are planning to rely heavily on Medicare for your healthcare needs when you reach your retirement years. Fortunately, Medicare will cover most of your basic emergency healthcare expenses. If you choose to pay for additional coverage it will even pay for additional healthcare expenses such as doctor visits and prescription drugs. If you have heard people talk about the need for Medicaid planning, this may leave you wondering why you would need to qualify for Medicaid if you are already covered by Medicare. To help clear that up, the Grand Forks Medicaid Lawyers at German Law compare Medicare and Medicaid.
What You Need to Know about Medicare
Medicare is a federally funded healthcare program for people over age 65 and for certain individuals under age 65 who are also disabled. Medicare is an “entitlement” program, meaning if you (or your spouse) paid into the program for the required length of time – 10 years — through your payroll taxes during your working years you are automatically entitled to Medicare benefits. Medicare actually comes in four parts. Part A, or basic Medicare is free. If you wish to sign up the additional parts of Medicare, however, it may require payment of a monthly premium similar to private health insurance. The four parts of Medicare and the benefits included in each part are as follows:
- Part A – Hospital care – Covers the cost of being in a medical facility.
- Part B – Covers doctors, medical tests, and procedures – basically, anything done to you. There is a monthly premium for Part B coverage.
- Part C – Medicare Advantage – Part C is an alternative to traditional Medicare coverage. Coverage often includes Parts A, B and D. Medicare Advantage plans are administered by private insurance companies.
- Part D – Prescription drug coverage – D is administered by private insurance companies, and you are required to have it unless you have coverage from another source. Part D requires you to pay a monthly premium in most cases.
What You Need to Know about Medicaid
Medicaid is also a healthcare program that is primarily funded by the federal government; however, the individual states have the option to provide supplemental funding for Medicaid if they choose to do so. In addition, Medicaid is administered by the individual states which accounts for some differences among the states with regard to eligibility guidelines and benefits offered to Medicaid recipients. In all states, however, Medicaid covers basic healthcare, such as:
- Certain inpatient and outpatient hospital services
- Early and Periodic Screening, and Diagnostic, and Treatment (EPSDT) services for children
- Nursing facility services
- Home health services
- Doctor’s services
- Rural health clinic services
- X-ray and laboratory services
- Family planning services
- Midwife services
- Freestanding Birth Center services
- Certified pediatric and family nurse practitioner services
- Tobacco cessation counseling for expectant mothers
Another difference between Medicare and Medicaid is that Medicaid is a “needs based” program, meaning you must demonstrate a financial need for benefits. Eligibility for Medicaid is determined, in part, by an applicant’s income and “countable resources.” Income limits are established on a yearly basis and are based on household size and the Federal Poverty Level (FPL) for the geographic area where an applicant lives. Typically, an applicant’s countable resources cannot own more than $2,000 worth of non-exempt assets, an eligibility requirement that is often problematic for seniors who turn to Medicaid for help with long-term care (LTC) expenses.
Long-Term Care and the Need for Medicaid Planning
The need for Medicaid planning stems from the high cost of LTC. Your odds of needing LTC increase with each passing year, and the cost of that care could wipe out your retirement nest egg rather quickly if you are forced to pay out of pocket. Because Medicare won’t pay for LTC, you may be looking at paying out of pocket unless you qualify for Medicaid. Qualifying for Medicaid as a senior, in turn, will often depend on whether or not you included Medicaid planning in your estate plan ahead of time. Talk to your estate planning lawyer to determine if you should include a Medicaid planning component in your estate plan.
Contact Grand Forks Medicaid Lawyers
If you have additional questions or concerns about Medicare or Medicaid, contact an experienced North Dakota Medicaid planning lawyer at German Law by calling 701-738-0060 to schedule an appointment.