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What is the difference between Medicare and Medicaid?

Medicare is the government program that most adults age 65 and older use to pay for some medical care, including visits to the doctor and hospital and prescription drugs.  Medicare typically only pays for 30-90 days of long-term care and is not a program that should be exclusively relied on as a means to pay for it.

There are two types of Medicaid.  One type is for those who are low-income and under age 65 and acts like traditional medical insurance.  The other type (which this blog post will focus on) is for those over age 65 who need long-term care and have run out of money.

What are the medical qualifications?

There are two categories of Medicaid for long-term care.  The first is traditional Medicaid, which covers nursing home care.  An applicant must need the type of care that is provided at nursing homes, which is generally 24-hour care where the person is bedbound.

The second is COPES (Community Options Program Entry System), which is for people who need assistance with at least two activities of daily living (ADLs).  ADLs include ambulation (walking), transferring, using the restroom, and bathing. Unlike Aid & Attendance, medication management is not considered an ADL.

COPES will cover some home care but not much.  DSHS (the state agency that administers Medicaid and COPES) will determine how many hours per week they determine that an applicant needs.  Across the board, they award significantly less than an applicant needs. For example, a client of mine needed 24-hour home care. DSHS only awarded 36 hours per week!  This person was forced to move into an adult family home in order to get the care she needed.

 

What are the financial qualifications?

Medicaid and COPES have similar financial requirements.  You quite literally have to be out of money to qualify. The assets of both spouses are considered.  An applicant can only have $2000 in nonexempt resources. The spouse of the applicant can only have about $56,000 in nonexempt resources.  Resources that are not counted (exempt resources) are a home (as long as your interest in it is less than $585,000), one car, prepaid funeral arrangements, personal effects, and life insurance policies with cash-surrender values of under $1,500 (which are virtually unheard of.)  The full value of assets such as IRA’s, 401(k)’s, annuities, etc. are counted. You cannot keep anything else. It either has to be sold for fair-market value or given away more than 5 years in advance of the application.

 

Can I give away assets to qualify?

Generally, no.  There is a 5-year lookback period, which means that DSHS looks back 5 years and will penalize an applicant for most gifting.  There are a few exceptions but not many. The exceptions that do exist can be tricky to qualify for. The rule of thumb is that giving away money or property is bad if you are going to need Medicaid/COPES.

Do all facilities accept Medicaid?

Many do not.  The ones that do typically require you to pay out-of-pocket for 2-3 years.  Since long-term care costs about $6,000 per month on average, it is reasonable to expect to pay upwards of $150,000.  The reason many facilities do this is because Medicaid rates are so low that the facility cannot break even.

Some facilities accept Medicaid immediately.  Those tend to not be in great shape. They are often understaffed and smelly.  Also, most of them have waiting lists, which can be several months long.

 

What can I do now?

It is really important to start thinking about long-term care early.  An experienced elder law attorney can help you navigate this process. Most elder law attorneys belong to the National Academy of Elder Law Attorneys (NAELA).  There is a directory on the NAELA website to find elder law attorneys in your area, which is: https://www.naela.org/findlawyer

 

Thank you for reading.  Please keep in mind that I have given general information, and there are always exceptions.  This is not legal advice.  No attorney-client relationship has been established.