Understanding Medicaid and How It Works – Part One

Medicaid is confusing.  Medicaid is complicated.  Google “Medicaid” and you will be deluged with way too much information.  The topic was further complicated by the Affordable Care Act, which made Medicaid the health care option for people who did not have or could not afford private insurance.  But, since we are Elder Care Lawyers, our discussion will be limited to the Medicaid that provides health care for people over the age of 65 or who are disabled.

Over the next few weeks, I will be posting a series of articles which attempt to take some of the mystery and confusion out of Medicaid.  Today we start with the basics.   Check back every few days for the next installment–or contact our office and we will send you one of our free booklets that cover the topic from start to finish.

So, let’s get started:

Why does Medicaid exist? 

Medicaid exists is to ensure that every older or disabled American receives quality long-term care in the event of disability, regardless of his or her ability to pay.

How is Medicaid different from Medicare?

Every American citizen, regardless of his or her financial status or income, is entitled to the benefits of Medicare when he or she is determined to be disabled or when he or she reaches the age of 65.  Medicare is a program which pays for some of your medical expenses.  It does not, however, pay for any portion of long-term care if you need rehabilitation or nursing home care for more than 100 days from the time you first enter the hospital.  At that point in time, if you do not have a long-term care insurance policy, you are going to have to start paying for your care—at an average cost here in Kentucky of $6,000 to $12,000 per month!

Why is the information I find or read about Medicaid so confusing?

Medicaid is a federal program administered according to the regulations of the individual states.  That is why answers to questions change dramatically depending on the state where you live.  This is a why you cannot  listen when your cousin Vinnie tells you about what happened when his secretary’s father applied for Medicaid.  First of all, Vinnie probably does not know all of the facts of the secretary’s father’s case.  Secondly, the secretary’s father may live in California—or Florida—or some other state where the rules, guidelines and regulations are very different from those in Kentucky.  Also, be careful about what you find online. Information found on the internet is often outdated or not applicable to your particular situation.   When evaluating information about Medicaid and its rules, the credentials of the source of the information, as well as how recently it was posted, are extremely important considerations.

Okay, so how does someone qualify for Medicaid?

There are three requirements to qualify for Medicaid.  First, a person must have mental or physical needs which require professional nursing care or, in some cases, in-home care, by professionals.  Second, a person must have less than $2,000 in what Medicaid refers to as “Countable Assets”.  Third, a person must not have in excess of a certain amount in income, which is referred to as the “income cap” (more on this later).  The above is assuming that the Medicaid applicant does not have a spouse who is continuing to live at home (which Medicaid refers to as a “community spouse”, meaning he or she is not in long-term care but is living in the “community”).  If there is a community spouse, all of the rules change as we will talk about later.