RALPH S. ROBBINS, CFP©
A CERTIFIED FINANCIAL PLANNING PRACTITIONER
elder care and special needs planning
Medicaid and long-term care
We define a Medicaid crisis as a situation where an individual has either been admitted to a nursing home or is about to be placed in a nursing home (in some cases care is being received at home or in an assisted living facility).
The family is dealing with long-term health care costs that may range between $3,000 and $10,000+ per month and the only resource seems to be the family's life savings. They have been told they must "spend down” their loved ones’ assets or perhaps that they must be "impoverished" before they are eligible for Medicaid benefits.
This is simply not the case. Opportunities exist whereby financial situations can be legally restructured to allow qualification for benefits while preserving a large portion of, if not all, family assets.
Negotiating the Medicaid maze while dealing with the emotional and physical demands of long-term illness or disability is, however, simply too much for most families; particularly if great distances are involved.
And that is why we are here: to cost effectively relieve you of the burden of dealing with bureaucracy so you can pay attention to the important things...the care and comfort of your loved one.
Ralph S. Robbins, CFP, works with families who seek assistance with the costs of long-term care. He and his associates have never had a Medicaid application declined and will assist with everything from venue selection to the annual re-certification review.
Medicare vs. Medicaid
Medicare is an entitlement-based federal insurance program that pays for the medically necessary care of the aged or disabled. Medicaid, on the other hand, is a needs based program funded jointly by the federal government and the respective state governments. Both federal and state laws, rules, and regulations apply when qualifying for and receiving Medicaid benefits.
While Medicare pays for expenses incurred by physician care and hospital stays, it can also assist with payments for up to 100 days in a nursing home if the individual meets certain requirements.
What Does Medicare Cover for Skilled Nursing Facilities?
Important note: Medicare only pays for Skilled Nursing Care. Intermediate or Custodial care is not covered under any circumstances. Once the patient no longer qualifies for skilled care, Medicare stops paying even if the patient is still in a facility.
Sometimes definitions are helpful. In this case, it is important to understand the definitions of the three basic levels of care:
To qualify for Medicare skilled care benefits in a facility the patient must:
If eligible, Medicare will pay the entire cost for the first 20 days of skilled care. After 20 days, Medicare will pay most of the cost for the next 80 days (total benefit = 100 days per benefit period). After the first 20 days a co-payment is required for the remaining 80 days. Many people have supplemental health insurance policies that cover this co-payment.
If the patient is a member of an HMO or other Medicare Advantage plan their skilled nursing benefit must by law be equal to or better than basic Medicare.
As noted above, Medicare may stop paying at any time depending on the individual’s medical condition and how they respond to therapy (as determined by the facility). When Medicare stops paying the nursing home expenses, most supplemental health insurance policies stop paying as well. Since Medicare pays for a relatively short period of time, only about two percent of all nursing home expenses in the United States are covered by Medicare.
What Does Medicare Cover for Skilled Home Care?
Medicare also provides skilled care benefits in the home. Remember that skilled care is that rendered by a skilled professional such as an RN, LPN, Speech, Occupational, or Physical Therapist, etc. In the case of home care, the patient's physician writes a prescription to order the needed services. The patient may contract with any independent agency that bills Medicare.
The patient will receive home visits from professionals to perform the required treatments. Medicare may provide some home health aide services while skilled services are being received. For instance, if the patient is recovering from a broken hip and receiving physical therapy a home health aide may be sent to bathe the patient once or twice per week. Custodial assistance with activities of daily living are not provided under any circumstances.
If eligible for benefits, skilled home health care is covered 100% by Medicare. If durable medical equipment is required it is generally covered at 80% with the balance paid for by supplemental insurance if any.
Medicaid Institutionalized Care Program (ICP)
Medicaid was originally designed to provide low-income persons with financial assistance to meet the costs of medical care and housing. Medicaid provides a variety of medically related assistance programs at reduced or no cost to those who qualify.
We, however, will only concern ourselves with the Medicaid Institutionalized Care Program (ICP; commonly referred to as the Nursing Home Care Program) in Florida. (For other states click here).
Florida also now uses Medicaid funds for what are known as Long-Term Care Diversion Programs or "Medicaid assistive services" (and sometimes referred to as "waiver programs") which will help pay for care at home or in an assisted living facility. To qualify for these the applicant must still meet the rules for ICP.
In Florida, the Medicaid Institutionalized Care Program (ICP) is administered by the Florida Agency for Health Care Administration. Eligibility for the program, however, is ultimately determined by the Florida Department of Children and Families or the Social Security Administration (if an individual is receiving Supplemental Social Security Income they are automatically eligible for Medicaid).
Qualified beneficiaries will receive financial assistance to help pay for the cost of nursing home care or a related program as well as other medically related needs. Note that Medicaid does not pay the entire cost of care. The person receiving benefits must contribute an amount based on his/her monthly income. This amount is referred to as “Patient Responsibility”. Medicaid then pays the nursing home, a managed care company, or the recipient directly for the remaining expense.
Unlike Medicare, most of us have never encountered the Medicaid program. As a "needs based" program, Medicaid eligibility is based on the need for assistance as determined by the individual's medical and financial situation. The applicant must meet medical, financial, and residential requirements before benefits will be received.
Even though the Medicaid program has strict financial limits, there are strategies that can be used to restructure the family's financial situation to qualify for Medicaid benefits. Through this restructuring process, assets can be preserved to enhance and/or prolong the patient's care or preserve income and assets for the spouse and/or family members.
For an overview of eligibility requirements, click here: