Medicare is a health insurance program run by the Federal government. The costs of the program are paid out of Social Security deductions. Persons over age 65 who have made Social Security contributions are entitled to benefits.
Medicare Part A pays for hospitalization, rehabilitation at a nursing home for a specific period of time, some home health care and hospice. Part B pays for doctors’ visits and outpatient hospital care. Medicare recipients may have to pay co-payments and deductibles, and monthly payments for Part B. Medicare does not pay for all medical expenses, and coverage is usually supplemented with “medigap” insurance.
If a Medicare recipient is hospitalized for three days and then enters a skilled nursing facility (SNF), Medicare will pay up to 100% of the first 20 days in the SNF. For days 21 to 100, the Medicare recipient will pay a co-payment, either privately or through supplemental insurance, in that Medi-Care only pays for 80% of the costs of rehabilitative care during this time. There is no Medicare coverage beyond 100 days in a SNF in a single benefit period. Medicare pays for skilled nursing care only, and not for custodial care. Also, our experience has been that the average stay in a SNF under Medicare is under 24 days. After that period of time you must pay privately, through your long-term care insurance, or through Medi-Cal qualification.
Medi-Cal is a needs based program, not related to Medicare, which is funded jointly with California State funds and Federal Medicaid funds. Upon qualification, Medi-Cal will cover the costs of a SNF. This is especially helpful, after Medicare funding runs out, and you are told that your loved one must leave the SNF.
Long term planning with an elder law attorney should be accomplished as early as possible, in that Medi-Cal eligibility for a SNF is based upon income and assets. For the older person who is a veteran, planning for the VA Aid & Attendance program, to help pay for in-home care, for instance, is done at the same time.
For Medi-Cal qualification, there are exempt assets, and non-exempt assets. There are rules with regard to income and share of cost for the nursing home. We have discussed in prior issues of ELT how to plan for and how to qualify for Medi-Cal. The estate planning documents, including the trust and financial durable powers of attorney, are usually updated to include government benefits and asset protection language. If a client loses mental capacity, and this language is not present in their estate planning documents, qualification for government benefits, including Medi-Cal, and asset protection is much more difficult.
SEE YOUR ELDER LAW ATTORNEY: Pre- planning is important for the older client. Peace of mind should be secured before a crisis occurs.