Most people expect to rely on Medicare to cover healthcare expenses when they reach their “Golden Years.” What you may not expect is the need to also qualify for Medicaid at some point during your retirement years. Because people often get the two programs confused, the Owings Mills Medicaid planning attorneys at Gershberg & Associates, LLC can help clarify what seniors need to know about Medicare and Medicaid.
What Is Medicare?
Most people are familiar with the basic concept of the Medicare program. Medicare is a healthcare program that is both funded and administered by the United States federal government through a Medicare tax on workers. Your paycheck stub reflects what you pay into the Medicare system each time you are paid. To qualify for Medicare, you must fall into one of the following categories:
- 65 or older
- Under 65 with certain disabilities
- Of any age and have End Stage Renal Disease (ESRD) or ALS
Once you turn 65, you will likely qualify for Medicare without the need to meet any additional eligibility criteria. If you, or a spouse, worked for the required amount of time (10 years) and paid into the system, you are entitled to benefits when you reach retirement age and can be enrolled in Parts A and B with a simple notification to the Social Security Administration (SSA). If you wish to enroll in Parts C and/or D, you will need to choose that coverage. The four parts to Medicare include:
- Part A:
- Hospitalization coverage
- Part B: Medical insurance
- Part C: Privately purchased supplemental insurance that provides additional services and through which all Medicare services offered by Part A and Part B, and sometimes Part D, can be accessed
- Part D: Prescription drug coverage
The Medicare premiums you pay will depend on which parts you elect. Premiums are typically deducted from Social Security benefits each month.
What Is Medicaid?
Medicaid is also a healthcare program that is primarily funded by the federal government; however, some states supplement the federal funding. Unlike Medicare, Medicaid is administered by the individual states and is a “needs based” program, meaning that an applicant must prove the financial and medical need for benefits to be eligible.
Because each state administers its own Medicaid program, both eligibility requirements and benefits vary from one state to another. There are, however, some benefits that every state must provide, including inpatient and outpatient hospital services, nursing-home and home healthcare, laboratory and x-ray diagnostic services, and transport to a medical facility. States are free to provide additional benefits above and beyond those required by the federal government.
Eligibility for Medicaid is based, in part, on an applicant’s income and assets. The income limit is related to the Federal Poverty Level for the applicable area and household size. The asset limit is typically low. For example, an unmarried Maryland resident applying for long-term care Medicaid in 2022 cannot own “countable resources” valued at over $2,500. Some assets are exempt, meaning they are not counted, when determining Medicaid eligibility as a senior.
Why do the Medicaid eligibility guidelines matter to you? Because as a senior, you may find yourself turning to Medicaid to help cover long-term care expenses which will not be covered by Medicare. If your non-exempt assets exceed the limit, Medicaid will deny your application and you will need to “spend-down” your assets to get them below the limit. That, in turn, may put your retirement nest egg at risk. The best way to protect your assets and ensure that you will qualify for Medicaid if you need it during your retirement years is to include Medicaid planning in your overall estate plan.
Contact an Owings Mills Medicaid Planning Attorneys
For more information, or if you have additional questions or concerns about how to protect your assets and make sure you qualify for Medicaid as a senior, contact Richard L. Gershberg and the experienced Owings Mills Medicaid planning attorneys at Gershberg & Associates, LLC by calling 410-654-3850 to schedule an appointment.