MEDICARE, MEDICAID, AND PLANNING FOR LONG-TERM CARE

Perhaps you are unsure of the difference between Medicare and Medicaid as it pertains to the challenge of paying for long-term care. If so, you are not alone. The two programs sound similar and both of them provide for medical care.

Let’s begin with a short definition of each program. Then, we’ll look at each program’s potential to help you cover the cost of expensive long-term care.

Medicare is an entitlement program. Anyone who has reached the age of 65, and is eligible to receive benefits from Social Security, can also receive Medicare.

Medicaid, on the other hand, is a public assistance program. It is designed to help those with limited assets and income pay for medical care. In order for a person to receive assistance from Medicaid to pay for nursing home care, he or she must meet certain asset and income guidelines.

Another fundamental difference between the two programs is that Medicare is run entirely by the federal government whereas Medicaid is a joint federal-state program. Each state has a Medicaid system of its own. This helps explain why eligibility rules differ from one state to the next and why some states use different names for Medicaid, such as MaineCare in Maine, MassHealth in Massachusetts, and Medi-Cal in California.

Whatever a state’s program is called, to receive money from the federal government it must adhere to federal guidelines. In general, the federal government pays for approximately one half of each state’s program, with the state itself paying for the rest.

Next time we’ll look at how Medicare and Medicaid differ with regard to planning for long-term care.