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Medicare and Medicaid….What’s the Difference?

Most individuals when faced with healthcare needs do not know the difference between Medicare and Medicaid and how these programs pay for services they require. Here are the basic comparisons and how they apply to the needs of individuals that have healthcare needs.

Medicare as a program has certain prerequisites for eligibility. Medicare is a national health insurance program that serves individuals who are 65 years or older as well as certain disabled individuals. It is administered by the Center for Medicare (CMS) of the U.S Department of Health and Human Services, with enrolments made through the Social Security Administration.

Essentially, Medicare has two components. Medicare Part A covers inpatient care in a hospital or subacute care facility as well as nursing home, home health and hospice services. Medicare Part B includes physician services, diagnostics and outpatient services. While Part A coverage is automatically available for those eligible for Medicare, Part B coverage is optional and must be purchased separately from Medicare through monthly payments.

In order to be eligible for Part A coverage in a skilled nursing facility, an individual must be admitted from a hospital within 30 days of a hospital discharge, and used a minimum of three hospital days.

The medical reason for admission to a skilled nursing facility must be consistent with the medical reason for hospitalization.

The individual must need daily skilled nursing care and/or daily skilled rehabilitative services – not “custodial care”. Custodial care typically encompasses services such as help with activities of daily living like feeding, washing and dressing. You must need a skilled professional on a daily basis (a minimum of five times a week).

The maximum amount of time that medicare will cover sub acute care, or skilled care is 100 days. If at any point during those 100 days, sub acute care, or skilled rehabilitative care is no longer needed on a daily basis or will not benefit the resident’s outcome despite continuing service, Medicare will stop coverage. An interdisciplinary team of health ae professionals make this determination.

Medicare’s role is coverage in a skilled nursing facility works like this: For the first 20 days, Medicare pays the full amount (provided the resident meets the criteria above).

Between the 21st and 100th day, the resident shares the cost with Medicare, paying daily co-payment (provided the resident is still in need of skilled services) and Medicare will pay will pay the rest of the cost up to 100 days. Residents may have supplemental insurance which can cover all or part of the daily co-payment. After the 100th day, the resident assumes responsibility for payment of the full amount.

How Does Medicaid Work?

Medicaid works very differently than Medicare, although they sound a lot alike. Medicaid is not age specific in that you can receive Medicaid benefits if you are not 65 years or older. Medicaid eligibility is for people who are financially and physically indigent.

Because Medicaid is a federal program, eligibility requirements and services covered vary widely from state to state. In New Jersey, the following eligibility requirements apply for skilled nursing care.

A potential resident must have a monthly income of no more than $2,022. The resident must have no more than $2,000 of a liquid assets or $4,000 if the resident entering a skilled nursing facility has a spouse remianing in the community. The couple’s house will not be counted as an assett. The remaining spouse in the community can retain cash assets of up to $109,560. The assets and income of children are not used to determine Medicaid eligibiity.

There is not a time limit for Medicaid eligibility. Once a resident qualifies, they can receive benefits in a skilled facility as long as they need them.