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Medicare and Medicaid Long-Term Care: What Does It Cover

If you or a loved one require long-term personal or medical care, you may be wondering what is covered and what isn’t under federal and state programs such as Medicare and Medicaid.

Both Medicare and Medicaid may help pay for some long-term care services. However, the circumstances in which each coverage can be used are limited, and each program has strict rules about

  • Whether you qualify for benefits
  • Which long-term services are covered
  • How long you can receive specific benefits such as long-term care
  • How much your out-of-pocket costs will be for long-term care
  • Whether or not your estate must reimburse the government after your passing

Knowing the differences between what the programs cover can help you navigate the maze of senior care and find viable solutions.

What is the difference between Medicare and Medicaid?

Medicaid and Medicare are wholly separate programs that provide government-administered health coverage.

Medicare

Medicare is considered an “entitlement” program. All people who have reached the age of 65 (or who are permanently disabled, or are victims of end-stage renal disease) are entitled to begin receiving their social security entitlements. These benefits, which were paid in over their lifetime as part of employment taxes, also qualifies them to receive Medicare.

Medicare is a federal program providing medical and hospital expense benefits and is typically applicable only to people over age 65, or those who meet specific disability standards. Home health services and nursing home coverage is severely limited.

Medicaid

Medicaid is a “public assistance” program. Its availability is limited to people who meet strict income and asset guidelines (or those who are pregnant, or people with specific additional circumstances). Medicaid pays for health care services for those individuals with low income and assets who may incur very high medical bills.

Medicaid is a joint state-federal program. Each state is allowed to independently operate its own Medicaid system, providing roughly half the funding. They are responsible for distributing the remaining half, which is supplied through federal money. State-administered Medicaid systems must conform to federal guidelines, or federal money will be withheld.

What does Medicaid cover long-term?

Medicaid, the largest public payer of long-term care services, not only covers ongoing and emergent medical care, like doctor visits or hospital costs but also provides coverage for:

  • Long-term care services in nursing homes, including custodial care, for all eligible people age 21 and older
  • Long-term care services provided at home, including visiting nurses and assistance with personal care
  • Long-term home and community-based services such as personal care services, laundry and cleaning support, and case management

Eligibility for long-term care services is typically determined by personal care and other service needs. If you require a level of assistance that would indicate you need to be in a nursing home, you may also qualify for help that could also allow you to receive in-home care and/or community-based services. Every state is different, and your State Medical Assistance office will be the best source for specific eligibility information.

What does Medicaid cover regarding long-term nursing home care?

Medicaid certified nursing homes deliver specific medically indicated care, known as Nursing Facility Services, including:

  • Skilled medical care/skilled nursing/related services
  • Rehabilitation for injury/disability/illness
  • Long-term health-related services needed due to a mental/physical condition

Medicaid coverage for Nursing Facility Services only applies to services provided in a nursing home licensed and certified as a Medicaid Nursing Facility (NF). Availability is additionally limited to Medicaid-eligible persons who have no other payment options.

What does Medicare cover for long-term care?

Medicare does not pay for most long-term care services except in particular circumstances, and typically doesn’t payout at all for personal or custodial care (i.e., when assistance is present to provide supervision or help with bathing, dressing, or eating).

Most nursing home care is classified as custodial care, meaning skilled medical services are not being provided. Medicare will cover care provided during a short stay in a skilled nursing facility (SNF) provided the following conditions are met:

  • You have received care consisting of a hospital admission followed by a three day or longer inpatient stay
  • Your inpatient hospital stay was followed by admittance to a Medicare-certified nursing facility within the subsequent 30-day window
  • You have previously required skilled nursing services/physical therapy / other types of therapy or skilled care while in the nursing facility

Provided you meet the above conditions, Medicare will pay a portion of the costs during each benefit period for a limited number of days.

How long does Medicare pay for long-term care?

Total Medicare payments for long-term care delivered in an SNF are limited.

  • Medicare pays 100% of the cost through day 20 of your stay in an SNF
  • You are responsible for any out of pocket co-pay ($164.50 as of November 2017). Medicare will cover the balance owed through day 100 of your stay in an SNF
  • After day 100, Medicare does not cover any costs for stays in an SNF

The above applies to Original Medicare.

Medicare Advantage plans cover the same services in an SNF, but the way cost-sharing is determined can vary.

The crossover between Medicare and Medicaid regarding nursing facilities

If your stay in an SNF exceeds 100 days, or your ability to pay co-pays ends before the 100th day is reached, you may no longer be eligible to stay in the Medicare-certified SNF under Medicare coverage.

However, in many cases, Medicare-certified SNFs accept long-term care insurance an /or private payment. Many of these Medicare-certified SNFs are also certified as Medicaid Nursing Facilities (NF).

If your private insurance or funding becomes exhausted, you can be switched to Medicaid NF coverage and continue to receive services in your current facility.

Does Medicare pay for any home care?

It is very rare for Medicare to pay for any home-based services, particularly personal or “custodial” care. The general exception to this rule is if such care falls under the description of doctor-prescribed medically necessary treatment for illness, injury, or condition, including:

  • Physical therapy, occupational therapy, and speech-language pathology (must be provided by a Medicare-certified home health agency)
  • Skilled nursing care needed on a part-time or intermittent basis
  • Medical social services (provided to mitigate social, psychological, cultural, and medical issues resulting from an illness or condition)
  • 80% of the cost for durable medical equipment such as wheelchairs, hospital beds, oxygen, and walkers, and 100% of other medical supplies)

As long as these services remain medically indicated and your doctor reorders them every 60 days, Medicare will cover such service indefinitely with no additional requirement of improvement or expected improvement.

Medicare will also pay for ongoing long-term care services in or outside the home for patients with ALS, Alzheimer’s disease, Multiple Sclerosis, Parkinson’s disease, or stroke.

Finally, Medicare covers hospice care if :

  • You have a terminal illness
  • You have elected to no longer seek a cure
  • Your life expectancy is six months or less

Hospice care may be received in your home, in a nursing home, or a hospice care facility. Short-term hospital stays and inpatient care may also be approved for Medicare payment (for caregiver respite).

Medicare covers medical and supports services from a Medicare-approved hospice provider, drugs that will provide you with pain relief and symptom control, in addition to grief counseling if required.

Estate recovery for Medicaid users

If you received Medicaid coverage for long-term care services, the state can choose to recoup Medicaid costs. Federal law provides states with the ability to recover any or all costs incurred by Medicaid for long-term care services, including nursing home, home, or community-based services.

Estate recovery is typically initiated following the death of a Medicaid recipient who

  • received Medicaid services either as a result of being permanently institutionalized, or
  • was 55 years of age or older when the services were received.

If your spouse survives you, your estate is exempt from recovery until after their death. Estate heirs can apply for a hardship recovery waiver.

Alternatives for long-term care

If you are a veteran, you may qualify for one or more programs provided by the Department of Veterans Affairs (VA). These programs can include long-term care services for service-related disabilities, nursing home care, and at-home care if you are aging-in-place. The VA may also pay for long-term care services required by veterans who do not have service-related disabilities but are incapable of paying for essential care. In these cases, services may require a sliding scale co-pay based on patient income level.

Additional county, state, and federally funded programs can provide resources under the Older Americans Act. These programs can cover costs for home and community-based long-term care services for older adults (generally 60 and older), helping them to remain as independent as possible.

The state administers these services through both state and local agency networks (the Aging Network). They can include custodial care as well as transportation services, nutritional programs, respite care, and legal assistance.

Knowing what options exist for long-term care and what Medicaid and/or Medicare will cover can help you plan for your long-term medical and custodial care needs.