What is the difference between Medicaid and Medicare?

On Behalf of | Apr 22, 2020 | Firm News |

Both Medicare and Medicaid are health insurance programs that are administered by the government. The biggest difference is that Medicare eligibility is not income or asset dependent. Medicaid eligibility is determined by a strict review of your income and assets.

Medicaid and Medicare defined

Medicaid is government-provided healthcare for individuals and families with very low income and assets that are worth less than a few thousand dollars. Medicaid is funded by both your state and the federal government. Medicaid can also help people over age 65 who qualify pay for some or all of their full time care and medical needs.

Medicare is a is a federal-only program that provides health coverage for you if you are over 65 or have a disability. It does not matter what your income is, or how much you have in assets.

Some people are “dual-eligible” meaning they qualify for both Medicare and Medicaid. Both programs were started in 1965.

Who qualifies for Medicaid?

Medicaid is need-based. You may have heard the term “spend-down” which is what some people must do in order to be eligible for Medicaid. People may want to receive Medicaid because they need long term care, rehabilitation or daily personal care services.

When determining whether or not you qualify for Medicaid, your assets will be reviewed. These assets include stocks and bonds, CDs, checking and savings accounts, property (not including your primary residence) and any additional vehicles. Personal effects, home furnishings, and household goods are not counted in your asset review.

What is a MAPT?

An MAPT or Medicaid Asset Protection Trust is an option for people over 65 to be able to protect their assets and help them become eligible for Medicaid. Nursing homes, skilled nursing facilities and even a prolonged hospital visit can be extremely expensive. Setting up a trust or MAPT can ensure that your assets are protected should you need long-term care.

Even when we plan very well and save as much as we think we will need or is recommended, certain health conditions, such as memory care or skilled nursing, can eat away at our reserves, leaving us little  left and nothing to leave for our loved ones. However, by planning ahead, ideally more than five years into the future (since there is a five-year look-back rule), you can use and preserve your assets in a way that serves your goals and family.