As individuals retire or age into Medicare, their insurance situation can change dramatically. There are a multitude of options open to those with Medicare. The terms are different, the prices are different, the products offered are dramatically different each year.
The purpose of this column is to give those who are eligible for Medicare, or soon to be eligible for Medicare, some understanding of their insurance options and how it could impact their health and finances.
These questions and answers are meant as a guide to help you understand the complex questions you are now thinking about. Each individual's specific situation may create a different solution. You shouldn't necessarily do what your friends, family and neighbors do.
Q: I don't understand what Medicaid is and what it does for people. Could you explain this to me?
A: Medicaid is a word that we see thrown around in the media a lot. Many of us have very negative preconceived ideas about what it is and who is on it. I am happy to clarify what it is and does for people. Please remember that I mostly work with the elderly, so I do focus on how and what it does for that age group.
Last week you may remember that I talked about the Slimb/QI-1 and QMB benefit. This week I will start with Medicaid, and what I call Community Medicaid and then move onto Long Term Medicaid. Both of these benefits also require an application be submitted to Department of Social Services (DSS). This application is a larger application and requires more supporting documentation.
Community Medicaid allows for an individual to live in their home, apartment or assisted living facility and still receive coverage for their medical costs. Community Medicaid has an income cap of $820 for one person or $1,175 for a couple. As the household size increases the monthly income increases. I work with primarily seniors so my households generally stop at two people. This Medicaid benefit does have a resource test. That means you have to be below $14,400 for one person or $21,150 for two people with regard to assets. This is money in the bank, investments, bonds, life insurance, etc. If you live in your home, your home is not counted as an asset. If you live elsewhere that property is included in this asset mount.
Community Medicaid will pay for health insurance premiums (Medicare and others). It will pay for medical equipment, homecare, medical transportation services, hospital stays, dental care, vision needs and many other things. Community Medicaid is a much larger benefit. If you have other insurance (like Medicare) Medicaid would always be secondary, except for those services not covered by Medicare. An example is dental services; Medicare does not cover dental, so Medicaid would be the primary payer for dental care. Medicaid is always considered the payer of last resort.
The last Medicaid level of coverage is Long Term Medicaid. This I will cover briefly. I have done series of articles on this benefit along.
Long Term Medicaid is the benefit that requires a much larger application. This is a two-part application which you would get from DSS. This Medicaid also requires much more supporting information. Long Term Medicaid has a five-year look-back period. That means in order to be determined eligible for this benefit you must document and prove five years worth of financial records to DSS. I often stress keeping your financial records for at least five years and this why.
Long Term Medicaid is often called Nursing Home Medicaid. I would like to clarify that you don't have to live in a nursing home to get this benefit. You could remain in your own home and receive care there and have Medicaid help pay for that care.
This Long Term Medicaid includes the benefits previously mentioned in Community Medicaid and also the cost of care for the individual in the nursing home or for the cost of care while living in their home.
The asset test for this is very different. This asset test includes that five year review of your finances. It allows for an individual to keep $14,400 in assets/resources. The monthly income cap for one person is $1,137, but I have had clients who make more than that and still be approved.
For couples this Long Term Medicaid is called Spousal Impoverishment Medicaid. I will briefly say that this income cap is $2,891 per month. This amount is divided between $50 for the institutional spouse (living in the nursing home) and $2,841 for the community spouse (still living independently). The resource test is also very different; the institutional spouse can keep $14,400 in their name and the community spouse can keep the house they live in, the car they drive and $74,820 in resources/assets. This benefit allows for the community spouse to keep a higher amount of income and assets, so they can maintain successfully in the community.
I will say again, I have simplified these benefits to explain briefly in this article. I have done so to give you information to keep on hand and in mind as you look at your own life. If you need more in-depth information I can address that in future articles or you can call for more information. There are always extenuating circumstances, so some of this information could apply slightly differently to you due to your particular situation.
Janell Sluga is a geriatric care manager certified and works for Senior Life Matters, a program of Lutheran Senior Housing, and has worked in Chautauqua County with seniors for more than 18 years. She is HIICAP (Health Insurance Information, Counseling & Assistance Program) counselor-trained by Office for the Aging. She does not sell insurance or represent any insurance company. She is an unbiased source of insurance and education to help seniors choose the best option for them.