What is the difference between Medicare and Medicaid?
Medicare is federal health insurance for people over 65 and certain disabled people under 65. Medicare is divided into two parts: Part A, hospital insurance, and Part B, medical insurance. Part A covers inpatient care in hospitals and limited coverage in a skilled nursing facility. Part B covers physician and outpatient services.
Medicaid is a federally mandated program providing health insurance benefits for low income individuals and families. The program is financed largely through federal funds but is administered by each state through their Medicaid agency. In Massachusetts, the Medicaid program is called "MassHealth". Medicaid is the program that pays for long term stays in nursing homes provided the applicant has met rigid eligibility requirements.
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I thought Medicare pays for everything? Does it?
No. Medicare provides excellent coverage and benefits but unfortunately there are many deductibles and co-payments. According to a study by the AARP, Medicare paid only 49.1 percent of enrollee’s health care costs in 2000.
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We heard about the 5-year "look-back" period for Medicaid,
what does that mean?
Simply stated, the "look-back" period of 60 months is the maximum waiting period for certain asset transfers made by an applicant or spouse. Asset transfers and gifts to trusts are subject to the same 60-month "look-back" period. When an individual applies for Medicaid to pay for nursing home care, the application will require full disclosure of all financial transactions for the sixty months period immediately preceding the date of the application.
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One of my parents will be admitted to a nursing home shortly.
Do we need to spend all of their assets to pay for their care?
No. There are many different planning strategies available to individuals and couples to help preserve family assets even though nursing home placement is imminent. Each situation must be assessed very carefully to determine which strategies will work best for them. Failing to do so can lead to catastrophic financial consequences.
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Can assets be transferred while my mother is in a nursing home?
No. Certain asset transfers within the five-year "look-back" period will trigger a period of ineligibility based on the total value of the asset transfer or gift. Individuals and families who are considering asset transfers and gifts need to understand Medicaid rules and regulations before any transfers are completed.
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When do I need to apply for Medicaid?
The rules around Medicaid eligibility will vary slightly from state to state and are usually quite complicated. In Massachusetts, an individual is eligible for Medicaid when his/her total countable assets are $2,000 or less.
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My parents live in an assisted living facility. Are there any
state programs to help pay for their care?
Yes, but unfortunately the few existing programs have very strict rules about income limits and as a result, provide benefits to a relatively small number of people. For the most part, assisted living care is paid entirely from private funds or long term care insurance.
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My father is in the hospital. The Case Manager is telling us
that he needs permanent placement in a nursing home. How can we
be sure that this is the right decision and what are the alternatives?
Each situation should be evaluated very carefully on a case by case basis. We understand that hospital staffs are under pressure from administration to arrange expedient discharges. Unfortunately, many patients are admitted to a long term care facility before all other options have been fully explored. We work with families to ensure that each of those options is considered. We know from experience that a placement decision is not always about care needs. Other issues like safety, finances and family dynamics are important factors.
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We have researched nursing homes by visiting the State and Medicare
web sites. Should we make our final decision based solely on the
scores and numbers from those web sites?
No. Choosing the right nursing home for a loved one is a very difficult and time consuming process. The information in the State and Medicare web sites provide excellent data about nursing homes but unfortunately are limited to information based on the most recent annual Medicare/Medicaid "surveys" or inspections. The Long Term Care Survey process is very complicated. Deficiencies are categorized or scored based on their Scope and Severity. In some instances, facilities with multiple minor deficiencies are often as good as those facilities with few or no deficiencies. Understanding the differences and translating this information requires special expertise. In today’s changing environment, we suggest that families seek professional assistance before any placement decision is made. Because nursing home costs are averaging close to $125,000 per year in Massachusetts, we believe that selecting the right nursing home should be handled with careful consideration and due diligence.
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What’s the difference
between a Power of Attorney, Durable Power of Attorney and Health
Care Proxy?
A Power of Attorney is a legal document that allows named individuals to act in your place and on your behalf, under certain circumstances. Generally speaking, Powers of Attorney refer to matters involving finances and asset management. Unfortunately traditional powers of attorney expire upon the disability of the person granting the authority. In recent years, Powers of Attorney have evolved to a newer form called Durable Power of Attorney (DPOA). A DPOA provides a paragraph that specifically indicates that the powers within the document are not affected by the subsequent disability and incapacity of the principal. Simply stated, a DPOA is viewed as one of the most important advanced directives that a person should consider in connection with eldercare planning issues. A Health Care Proxy is sometimes called a Durable Power of Attorney for Health Care. It is a legal document that specifically authorizes the designated agent to make health care decisions on behalf of the principal.
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What is a Guardianship and when is one
needed?
The laws around Guardianship and Conservatorship are very complex and will vary from state to state. Generally speaking, individuals with certain physical or mental incapacity or illness who are incapable of taking care of themselves, or are incapable of making or communicating informed or responsible decisions may require a formal Guardian to act on their behalf for health related decisions and a conservator to act on their behalf for financial matters. We are often involved with families where a parent or loved one has a dementia and a DPOA or Health Care Proxy was not executed prior to their incapacity. In many of those instances, a spouse or child have enlisted our assistance to arrange for a Guardianship or Conservatorship petition so that they are legally empowered to manage the person’s estate and/or make appropriate health care decisions on their behalf.
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