Navigating the Medicaid and Medicare Maze

Medicare offers health care for Americans ages 65 and older or those younger than 65 with a disability, while Medicaid covers low-income people of any age. Following is some basic information about each program. For more detailed information, contact the Centers for Medicare & Medicaid Services. 

Medicaid
If the person you are caring for qualifies as having a low income, Medicaid pays for certain medical and long-term care services, prescription drugs, and nursing home care.

Medicaid planning often requires forethought because a person must have very few assets to qualify for Medicaid coverage. The limit may be as low as $2,000, excluding the value of a home and possibly a car.

A person must "spend down" before becoming eligible. Eligibility requirements and rules about spending down vary by state. Because rules change frequently, planning strategies must follow suit. An elder-law attorney with Medicaid experience can provide the best guidance.

Medicare
Medicare is split into Part A (hospital insurance), Part B (supplemental medical insurance), and Part D (prescription drug coverage). Part A helps pay for hospital or short-term nursing home care, hospice services, and some home health care. Although the individual doesn't pay a premium, there are some copayments and a yearly deductible. Part B is optional and covers part of doctors' bills, outpatient care, home-based physical therapy, certain screenings and lab tests, and a limited number of prescription drugs. There is a monthly premium and an annual deductible. Part D covers some prescription drug costs. Typically, there is a monthly premium, a yearly deductible, and a copayment.

Medicare savings programs help low-income seniors cover certain Medicare costs, such as premiums and copayments. Call the Centers for Medicare & Medicaid Services or check the website for information on local programs.

If your loved one doesn't qualify for low-income programs, Medigap insurance may be an option. These supplemental policies, offered by private insurance companies, are designed to close some gaps in Medicare coverage. Medigap policies may help pay certain fees, such as copayments and deductibles, as well as the portion of doctors' bills not paid by Medicare. To enroll in a Medigap policy, a person must have Medicare Part A and Part B. Medigap policies don't work with plans known as Medicare Advantage Plans. 

Consider getting Medigap within six months of enrolling in Medicare Part B. Insurance companies cannot deny coverage or request higher premiums because of existing health problems during that period; however, after that point, they can.

For those who do not choose Medigap right away, there is an annual open enrollment period. Make sure the person you are caring for does not drop his or her current insurance to switch to a Medigap policy without first checking when open enrollment begins. Periods without coverage can be costly.

Another option is a Medicare Advantage Plan, also called Medicare Part C. These plans are offered by private insurers. They provide all Part A and Part B coverage and usually offer extra benefits as well.

Typically, copayments and deductibles are lower than with standard Medicare, and prescription drug coverage is included in the plan. To join, a person must have Medicare Part A and Part B coverage. He or she will continue to pay the Part B premium and may also need to pay a monthly premium to the plan. However, with many plans, the individual must see a doctor who is part of the plan's network or go to certain hospitals for care.

Source: from Caregiver’s Handbook, Harvard Health Publications, Copyright © 2007 by President and Fellows of Harvard College. All rights reserved. Used with permission of StayWell.  Use of Content | Medical Disclaimer