4 - Explaining Medicare vs. Medicaid

Episode Summary

In this episode, we walk through a very important topic: Medicare vs. Medicaid. We explain Medicare first and what Medicare’s relevancy is in terms of estate planning and elder law. Following that, we dive into Medicaid. We cover what it is and how it functions in our society. We also touch on filial responsibility law and Medicaid estate recovery. The goal of this episode is to clear up any confusion with Medicare and Medicaid and provide you the information you need to plan out the rest of your life. We will dive into some new topics on the next episode, so stay tuned!

Key Takeaways 

Takeaway 1: Medicare

01:01 - 00:05:36)

• Medicare is not what many people think it is. It is not a widely-applied health insurance.

• In terms of long-term care, it only applies to an individual when they are admitted to a hospital for 3 consecutive nights, leaves the hospital, and then goes to a skilled facility for rehabilitation. 

• Must be admitted to the hospital, not just be under observation.

• Medicare will pay for up to 100 nights in the skilled facility, but only if you show signs of improvement and progress in your rehabilitation. It’s not 100 guaranteed nights of coverage.

• You could go from paying almost nothing, maybe just a copay, to paying $12,500 per month if you do not rehabilitate.

Takeaway 2: Medicaid

05:37 - 09:30

• Medicaid is a federal program, with the most common laws that people recognize being OBRA 96 and DRA 05. These laws set the rules for Medicaid.

• There is federal law, but each state interprets the federal Medicaid rules as they see fit.

• Research the nuances in your state and talk to the local county office.

• Pennsylvania has a long-term care handbook that can be found online.

• Every county interprets the handbook in their own way, and within each county, every case worker may look at an issue slightly differently.

• We offer weekly workshops, one of those being the Medicaid workshop. We talk about what to expect, what you can do ahead of time, and what you can do to make things easier down the road.

• Medicaid essentially will pay for the long-term care for an individual in a skilled facility, or there is the waiver program or Community HealthChoices in Pennsylvania that will pay for care in a person’s home if they meet the requirements.

• There is an income cap limit in PA with the waiver program, but with a nursing home, whatever the income is, we can preserve and protect the assets.

• In PA, if a spouse enters a nursing home, we are able to protect 100% of the assets of the spouse still living at home.

• We can take everything else and put it in the community spouse’s name, but the community spouse can only take half as long as half of the money falls between $135 thousand and $30 thousand.

• Any excess money can be turned into an income stream that will pay back to the community spouse in as short of a term as possible. It must be Medicaid-compliant under the law.

• For unmarried individuals, we can protect at least 50 percent of their assets. We can gift half the money they own.

• This is called the Half and Half plan 

• If someone is about to enter a nursing home, it is not too late. We can still help with crises and prevent asset loss. 

Takeaway 3: Filial responsibility law and Medicaid estate recovery

19:32 - 24:32

• Filial responsibility law is the proposition that children, spouses and parents can be responsible for the nursing home debt of the child, spouse, or parent. 

• The Pittas case was a bad facts case that made bad law. The judge in the case used filial responsibility law to hold Mr. Pittas responsible for taking his mother’s money. He was liable for nearly $93,000 in nursing home costs incurred.

• Medicaid estate recovery is once you’ve already been receiving benefits, when you die, the state is allowed to go after the probate assets of the individual to cover the amount of care that was provided.

• We just want to make sure the assets are under $2400 and/or they do not go through probate. 

• This is why you want to use a professional.

• Estate recovery is the last thing we worry about, because when we do a plan correctly, we do not have to worry about it.

Links and Resources Mentioned

Bellomo & Associates workshops including our Medicaid workshop: https://bellomoassociates.com/workshops/ 

For more information, call us at (717) 845-5390   

Connect with Bellomo & Associates on Social Media

Twitter: https://twitter.com/bellomoassoc 

YouTube:  https://www.youtube.com/user/BellomoAssociates 

Facebook: https://www.facebook.com/bellomoassociates 

Instagram: https://www.instagram.com/bellomoassociates/  

LinkedIn: https://www.linkedin.com/in/bellomoandassociates 

Ways to work with Jeff Bellomo

Contact Us: https://bellomoassociates.com/contact/ 

Practice areas: https://bellomoassociates.com/practice-areas/