Medicare vs. Medicaid and the Medicaid Application Process

Medicare vs. Medicaid and the Medicaid Application Process

By Ryan McNeill, Attorney

Due to similar sounding names, many people are uncertain about the difference between Medicare and Medicaid, particularly as it pertains to long term nursing care benefits. The Medicare program is an insurance program, which like most private insurers, covers health services like doctor’s visits, trips to the hospitals, and through its Part D program, prescription benefits. Medicare will only pay for a stay in a long term care facility if certain conditions are met: 1) You are admitted to a hospital for a “qualifying stay” of at least 3 days, and 2) You are discharged to a skilled nursing facility for rehabilitative services. Even in these circumstances, Medicare will only pay the costs of this kind of care for 20 days and then imposes a coinsurance amount of around $152 per day for days 21 through 100. After 100 days during a benefit period, Medicare will no longer pay for skilled nursing care services.

By contrast, Medicaid is an assistance based program which has a long term care benefit to individuals needing skilled nursing care. Its rules provide that an individual needing skilled nursing care can qualify for assistance if that person has less than $2,000 in “countable resources.” In addition, Medicaid will look to see what assets the spouse of a Medicaid applicant has in his/her name to determine eligibility for the applicant. Unfortunately for many people, the rules for what is or is not considered a countable resource, or strategies for converting countable resources into non-countable ones, are not explained to them in the Medicaid application process.

When a Medicaid application is filed for skilled nursing care benefits, there is generally a 45 day period from the date of filing for the caseworker to process the application and receive all verifying documentation. During that period the caseworker will make requests for information asking for additional paperwork but additionally this is a 45 day period for the applicant to get any remaining eligibility issues cleared up. However, I recommend that when the initial application is filed, as much supporting paperwork be submitted with the application to limit the amount of extra information you have to get together during the short 45 day window.

I have found that many clients are told by friends or health care workers that they will never qualify for Medicaid in long term care due to the rules of eligibility. Alternatively, I have had clients file a Medicaid application before consulting with me, and been denied because of a small issue that could have been easily addressed during the 45 day window or even before filing an application. When a skilled nursing care Medicaid applicant is married with a spouse remaining at home, there are a number of options available to allow the spouse remaining at home to preserve both money and real property. However, those options are not often disclosed by a caseworker and they lead to many denied applications or unnecessary depletion of resources. As a result it is our recommendation that any individual applying for Medicaid for skilled nursing care for themselves or a spouse consult first with an elder law attorney to make sure that Medicaid eligibility can occur at the earliest possible date with the maximum amount of assets being protected as allowed by Medicaid.