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What about medicare and medicaid?
Medicare and Medicaid are two programs relating to health care that are often confused with each other. Medicare is a health insurance program for people who are disabled or over 65, and this program is run by the federal government. Medicaid is a joint federal-state program that provides health care and nursing home care to low-income children and seniors and to the disabled.
Medicare has four parts: Part A covers skilled nursing care after a hospital stay for people who qualify for the benefit.
Part B covers outpatient care, including doctor visits, medical specialists, ambulances and transportation for medical purposes, diagnostic tests, and other prescribed outpatient therapies. Part B is available for anyone over 65, whether or not they are eligible for regular Social Security benefits. Medicare Part B does not pay for all of the listed services in full. Seniors have to pay certain portions of the cost some services, and many obtain insurance policies, often called Medigap policies, to pay some or all of these costs.
Part C allows Medicare beneficiaries the choice of other options for health coverage than the usual fee-for-service approach under Part B. This includes HMOs, preferred provider organizations (PPOs), provider sponsored organizations (PSOs), private fee-for-service plans, and medical savings account plans (MSAs).
Part D allows enrollees to choose a plan that helps pay the costs of prescription drugs.
Medicaid is a program to provide a wide range of both health and custodial care for children, seniors, and the disabled. It is sometimes called by other names in particular states, like Medi-Cal in California and Mass-Health in Massachusetts. Medicaid eligibility is based on a sometimes complicated formula of assets and allowable income, that sets aside sufficient assets and income for a spouse who is not in need of care. For example, a wife whose husband needs nursing home care would be able to keep a certain amount of assets and income that would not be counted against her husband in determining Medicaid eligibility. Her husband would also be allowed $60 a month as a personal needs allowance. He may be required to pay the rest of his income to the nursing home before Medicaid will pick up the tab for the rest of his expenses.
To qualify for Medicaid benefits, the person must have few assets, usually less than $2,000. In most cases this doesn’t include at least the first $500,000 of that person’s equity in a home. The allowed assets, income, and provisions for a spouse all differ from state to state, since Medicaid is administered and partly funded by the states.
Because Medicaid has become the default health coverage to provide nursing home care, there are efforts to encourage people to find other alternatives. California, Connecticut, Indiana, and New York pioneered a plan where people may obtain long-term care insurance to pay for their own nursing home or long-term care costs. These policies usually last for a specified period. When a qualified plan ends, the purchaser in these states can become eligible for long-term care benefits from the state Medicaid program without having to meet the asset and income requirements. The federal government has endorsed and encouraged this approach. |
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