Medicare versus Medicaid

Medicare versus Medicaid – What is Medicare and Medicaid and the differences of Medicare vs Medicaid.

Medicare is a national health care insurance primarily for older American citizens. The typical eligibility requirements for Medicare are age 65 or older, people with certain disabilities, and with end stage renal disease. Although full retirement age for Social Security is currently 67, eligibility for who qualifies for Medicare still remains age 65. So a person can qualify for Medicare when not yet eligible for Social Security. The Medicare Part A covers hospital care. Medicare Part B covers medical insurance, and Medicare Part D prescription drugs.

Medicaid is the federal long term health care program for low income persons and families created by the 1965 Social Security Act. Being poor do not necessarily qualify people for Medicaid. Approximately 60 percent of impoverished individuals are not Medicaid eligible. Those served by Medicaid are low income adults, their children, eligible resident aliens, and those with certain disabilities.

Asset Transfers – Nursing Home Care
Another difference between Medicare versus Medicaid is the treatment of an individuals assets with respect to Medicaid coverage.

In recent years the federal and state governments have made changes affecting the transfer of assets for nursing home residents. This was brought on by the 2005 Deficit Reduction Act and has been implemented by state.

The new rules introduced a five year “look back period” which addresses asset transfers by the Medicaid applicant in the previous five years. What this means is that when someone, say a parent, transfers an asset (money, home, etc.) to their children in the five years previous to enrollment will be penalized.

The asset transfers during the five year period are totaled and the penalty is the amount transferred over the five year period after dropping under the Medicaid asset limit – typically $2000 in most states.

The Medicaid beneficiary must re-pay for the asset transfers by paying for the nursing home costs. And since they now have less than $2000 after giving all their assets away, they have no money to pay for it. This is how seniors who give away their assets end up with no money and still not eligible for Medicaid coverage.

Because of this lawyers are offering services for planning the transfer of assets to other family members and avoid these dilemmas. Medicaid planning converts countable assets to exempt assets allowing the senior eligible for Medicaid coverage.

Funding Differences
Medicaid is funded jointly by the federal and state governments with the states administering the program. Where Medicare is an entitlement program, Medicaid eligibility must meet a means test based on social protection and welfare as apposed to a social insurance. This eligibility is mostly determined by income and access to financial resources (assets) which is not a criterion for Medicare. There are situations where individuals are eligible for both Medicare and Medicaid – referred to as Medicare dual eligibles.

Another difference between Medicare versus Medicaid is that Medicaid covers a wider range of health care services that Medicare.

Health Care Reform Bill
The 2010 health care reform bill will increase Medicaid already low reimbursement reimbursement to the same level as Medicare. This means more health care providers will be more likely to accept Medicaid insurance and will thereby increase the number of Medicaid providers.

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