Medicare, Medicaid, and Medigap are all familiar terms to an Elder Law attorney, even as their similarity can cause confusion to our clients. Here then is a brief explanation of these programs.
Medicare began hospital and health insurance coverage in 1965. Insurance is provided to individuals who are 65 years of age (or older), individuals of any age who are receiving Social Security Disability Income payments (after a waiting period for all but a few conditions), or individuals who are receiving Disabled Adult Child (DAC) benefits, and who have coverage built up by premium payments on their own, their spouse’s, or a parent’s withholding record. Individuals who have not paid into the system may be able to enroll by paying a higher monthly premium.
Once past the initial enrollment period, changes to enrollment are time- or circumstance-limited. Failure to comply with the restrictions on changes can result in higher premiums or denial of coverage. Individuals who fail to enroll in Medicare when first eligible (and without equivalent creditable coverage) may be able to enroll in Medicare during a later open enrollment period, but the premium will be higher (and remain higher) than if the enrollment occurred at first eligibility.
Medicare is structured in several “Parts,” which are as follows:
- Part A – hospital coverage. Part A is premium-free with sufficient work history. Most people should enroll in Part A as soon as they are eligible for it.
- Part B – medical coverage. Enrollees pay a monthly premium for Part B coverage that is income-based. The base premium is $134/month for 2018. If an individual who is 65 or older is still working and receives coverage through an employer-based health plan, the employer coverage may replace Part B.
- Part C – Also known as a Medicare Advantage Plan, Medicare Part C takes the place of Part A and Part B through a private insurance company or health system that establishes a health maintenance organization (HMO), preferred provider organization (PPO) or other health care arrangement. Medicare Advantage plans are not available in all areas and the provider network is limited to those who agree to participate, which can change from year to year. Medicare Advantage Plans may offer gym memberships and other wellness-based services compared to traditional fee for service Medicare.
- Part D – prescription drug coverage. Part D covers prescription drugs and is an optional plan that is purchased from an insurance company.
Following a qualifying hospital admission, Medicare will pay for a limited amount of skilled nursing care, either at home or in a rehabilitation facility. If the patient is unable to safely return to the community–which may be independent living or an assisted living community, after rehabilitation ends—and must stay in a nursing home, Medicare will not pay for the ongoing costs of the non-skilled care. The nursing home resident will need to private pay, tap into any long-term care insurance benefits, or apply for needs-based benefits to assist in paying for care. If you need help, contact Promise Law so we can assist in identifying sources of payment and crafting and implementing a plan to access benefits.
Medicaid provides means-tested health insurance to aged, blind, disabled, or other individuals that meet program requirements. Medicaid is also the single largest source of payment for the long-term care costs of individuals who need an institutional-level of care. Although a nursing home is the traditional setting for institutional care, Medicaid paid long term care may be provided in the home, through a PACE (Program for All-Inclusive Care for the Elderly) arrangement, or in a group home or intermediate care facility. Medicaid also offers supplemental programs that assist low income individuals with disabilities afford their prescription medications or pay Medicare premiums.
As a means-tested program, Medicaid recipients must meet financial eligibility criteria in addition to categorical (citizenship, residency, age, etc.) and medical eligibility criteria. In general, Medicaid recipients must have low income and few countable resources to become and remain eligible for assistance. The ongoing eligibility requirements mean that whomever is managing the assets of the recipient must be careful to ensure that the individual remains eligible, or else that the tradeoffs of losing eligibility have been duly considered. If you have questions about achieving or retaining Medicaid eligibility for a family member, please contact Promise Law for an appointment to discuss the matter.
“Medigap” is a catchall nickname for Medicare Supplemental Insurance policies that are issued by private insurance companies for a monthly premium. Individuals wishing to purchase a Medigap policy, which are optional, must be enrolled in Medicare Parts A & B. If the individual maintains continuous Medigap coverage, including carefully timing any changes and ensuring all premium payments are timely, the insurance company cannot cancel the policy as long as the premiums are paid. Medigap policies may cover co-pays and deductibles; some may cover care provided outside of the United States. Medigap policies with the same alphabet letter (Policy A, Policy B, Policy N, for example) all offer the same benefits. In evaluating a Policy, decide which benefits you want, then shop for price and service. Coverage through Tricare for Life, employer-provided retiree health insurance, or union-provided or other health coverage may mean that a Medigap policy is not necessary. Individuals who do not have Medigap or other comparable coverage or who are not enrolled in a Medicare Advantage plan are responsible for paying all co-pays and deductibles out-of-pocket.
Whether you’re already working through these issues, or just want to get more information to make better choices in the future, Promise Law can help. You can click here to contact us and schedule a consultation.