Differences on Coverage between Medicare and Medicaid
How do Medicare and Medicaid differ in regards to long term care planning?
Medicare, by and large, does not cover long-term nursing home care. For example, Medicare Part A will only cover up to 100 days in a skilled nursing facility for a particular illness, and only after the patient has spent at least three days in a hospital. Worse, from day 21 to day 100, the individual in the skilled nursing facility must make a copayment of $167.50 per day. Few people actually receive Medicare coverage for the full 100 days, in part because of the copay, and in part because restrictions and conditions for coverage are quite stringent. The coverage does extend to elderly who have been hospitalized, and discharged to a rehab facility. This is generally an extension of the 100 day coverage.
MassHealth, on the other hand, does cover long-term nursing home care for people who meet its income and asset limits. One hundred days, one year, five years–MassHealth will pay for the care as long as the recipient is eligible. Given the high cost of nursing home care, the dearth of affordable alternatives, and the restrictions inherent in Medicare coverage, MassHealth is now the single largest payer of nursing home stays in the United States.
How do you get assistance from MassHealth to pay for nursing home care? If your income and assets are less than your state’s guidelines, you are already eligible. If your income and assets exceed state limits, you have to take the appropriate steps to become eligible. The sooner you take these steps, the better, and you have to be careful with planning and financial transactions.
For example, you can’t simply give your “stuff” away a few weeks before entering a nursing home and expect MassHealth to pay for your stay. When you apply for MassHealth, any gifts or transfers of assets made within five years of the date of application are subject to penalties. This is known as the look-back period. And what is the “penalty?” It is the amount of time during which the person transferring the assets will be ineligible for MassHealth. The penalty period is determined by dividing the amount transferred by what MassHealth determines to be the average private pay cost of a nursing home in your state.
The bottom line is this: While Medicare can help pay for a short-term stay in a nursing home, MassHealth can pay for long-term care. Through proper planning, you can obtain assistance from MassHealth to pay for nursing home care. But it is a difficult process to whittle your life long savings down to almost zero to become eligible. The sooner you start planning, the better your chances of getting the care you need.
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John D. Miller is the founder/owner of Home Care Partners, LLC, a Massachusetts business providing private duty, personalized in-home assistance and companion care services to those needing help in daily activities and household functions.
Phone: (781) 378-2164