Public options: Medicare and Medicaid

Medicare

Medicare is a health insurance program for people age 65 or older, some people with disabilities under age 65, and people of all ages with end-stage renal disease. You should not count on Medicare to pay for your long-term care needs. Medicare pays little or nothing for care that helps people with activities of daily living for long periods of time. Medigap insurance (supplemental insurance for Medicare) is not intended to meet long-term care needs either, and provides no coverage for the vast majority of long-term care expenses.

Medicaid

Medicaid provides health-care services for low-income individuals. In Texas, Medicaid pays for some long-term care services at home and in the community. However, you must qualify for Medicaid. Your eligibility will be determined by your need for long-term care services and your income and other financial resources, which must be at or below set limits.

Qualification for Medicaid can be difficult

To qualify for long-term care through Medicaid you must meet strict demands.

• You must meet Medicaid income eligibility based on “countable income” limits. In 2009, the monthly income limit for a single person was $2,022, and $4,044 for a couple. What’s considered countable income varies depending on your personal circumstances.
• You must have no more than $2,000 in “countable resources” for a single person, or no more than $3,000 for a couple.
• You cannot have home equity in excess of $500,000.
• Neither you nor your spouse can transfer income or assets in order to qualify for Medicaid without incurring a penalty. You also cannot have transferred any resources in the 48-month period prior to your application.
• The block of time these transfers are prohibited is called the “look-back period.” By January 2011, the look-back period will increase to 60 months.
• You must have a “medical necessity”—a medical condition that requires the type of care provided in a long-term care facility, such as a nursing home. If you qualify, there is usually no wait for these facility-based services.
• The medical necessity designation also allows you to receive wide-ranging home- and community-based services, but because demand for these services is high, these services may not be immediately available.

If you do not meet the medical necessity designation, you may still be able to qualify for some personal care services that help with activities of daily living. Though you may not have to wait for these services, they are more limited.

You may have to "spend down" your resources

In essence, you will likely have to “spend down” your countable resources if you hope to qualify for Medicaid long-term care services. This includes your savings and other resources that can be converted to cash. If you qualify but still have income, Medicaid may also require that you pay a monthly co-payment to your long-term care facility or service provider. Any additional expenses Medicaid pays for your care may be recovered from your estate. For anyone who has worked and saved for the future, accessing long-term care through Medicaid can be challenging and financially draining.

Medicaid is a payer of last resort

Medicaid is a payer of last resort. This means that If you qualify for Medicaid but have other health-care coverage, long-term care coverage, or another party is liable for your medical expenses, those sources will have to pay first before Medicaid pays your long-term care claims.

*Data as of December 2009; Medicare and Medigap data provided by the U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care Information website.