Selected Podcast
What You Need to Know about Medicaid for Long-Term Care
Seniors who are low on financial resources may turn to Medicaid to support long-term care. Deitra Lawson, Corporate A/R Director, discusses what you need to know about Medicaid for such services.
Featuring:
Deitra Lawson
Deitra Lawson is the Director of Accounts Receivable. Transcription:
Bill Klaproth (Host): Medicaid long term care is a great benefit for those who don’t have much savings or retirement income and now need services beyond what their families can provide. So here to talk with us about what you need to know about Medicaid for long term care is Deitra Lawson, Corporate Billing Director with Chicago Methodist Senior Services. Deitra, thank you for your time. So fill in the blanks for us on Medicaid. What is it and who is it for?
Deitra Lawson (Guest): Hi, glad to be here. Medicaid is basically the state government funding residents and families that don’t have much funds in order to cover them for different medical services. Specifically, we’re going to talk about nursing homes here.
Host: Okay, and before we go any further, I just want to ask you this, what is the difference between Medicaid and Medicare? Because I feel there’s some confusion out there.
Deitra: So Medicare covers with the Federal government. The Federal government covers them. Everyone is entitled to Medicare because we put money towards it when we’re in our working age. We are paying towards it everyday that we work. So once we become 65, Medicare automatically covers you, but that’s only for hospital stays and extra care that’s needed. After you’ve recovered from rehabilitation or a longer necessary medical stay, you need to have even more covered by a different provider and that’s where Medicaid steps in, and Medicaid works as the last payor of resort. So if someone else can pay less care or private pay or another insurance, Medicaid will not pay room and board. They have to be the last payor of resort. So that’s where the state comes in and helps with room and board assistance if no one else is available.
Host: So last payor of resort. So Medicare is Federal, Medicaid is state. Is that right?
Deitra: Correct.
Host: Okay, so who qualifies for Medicaid then?
Deitra: Anyone that has assets under $2,000. Usually you have spent down all of your finances and they have applied for, gone through the process of the application, but they usually have no other funds in order to cover their medical assistance. So you have to have your assets under $2,000 to qualify.
Host: Okay, what does Medicaid cover then? You mentioned nursing home. Can you expand on that a little bit?
Deitra: Well there’s different areas that Medicaid can cover. People can get food assistance, they can get community assistance with Medicaid, but the majority of Medicaid funding does cover the medical side like nursing homes and hospital stays, for coinsurance to Medicare and some small therapy services.
Host: So basically nursing home stays, also in home care and assisted living communities as well? Does that fit in there?
Deitra: Yes, all of those fit into Medicaid.
Host: So this is basically provisions for living. This is not medical coverage. Is that right?
Deitra: Well Medicaid does cover medical coverage because you have the room and board. You have – but usually when you have like a rehab stay, Medicare is going to pay first and then Medicaid will kick in to pay the coinsurance for that. So it does cover some medical coverages but usually it’s the coinsurance or the portion that another insurance payor could not pay.
Host: So for someone who wants to sign up for Medicaid, are there age requirements or other requirements? Who ultimately qualifies for Medicaid?
Deitra: Well the things to know with Medicaid, not everyone expects to be applying for Medicaid. It’s usually your kind of up against the wall and they’re backed into a corner when you need to apply because there’s nothing else. There’s no other finances. The bills are kind of piling up and the thing to remember is to prepare and be proactive before you ever need Medicaid because when you’re applying for Medicaid, they look 5 years prior from the date of application. So what I’d love for elders to know is that be more proactive in your estate planning before you ever even think you need Medicaid because Medicaid goes back 5 years and some things that you’ve done in that 5 year period may actually disqualify you for Medicaid and that makes you have a penalty period and it really becomes more complex once you actually file that Medicaid application. So some things to keep in mind is getting your estate planning done, talking to someone to get a power of attorney for property. I know a lot of the times we get a power of attorney for healthcare in place, but we don’t think about the power of attorney for property. The reason why we want to do that power of attorney for property is this helps with getting 5 years of bank statements, getting some of the financial information that’s required with a Medicaid application and we’ve had people where they don’t have that in place and what we have to do is start with a guardianship, a state guardianship process in order to even get 5 years of bank statements to work with a bank and that’s costly and it’s a whole court proceeding. So you can actually alleviate some of the frustrations that come with a Medicaid application by getting the estate planning done ahead of time. Prepaid burials is a big one you want to do before you even want to do a Medicaid application. You want to get all of that in place because once a Medicaid application is done, it’s harder to get it in place and not be considered another asset, and so you want to get your prepaid burials done before applying for Medicaid and make sure it’s an irrevocable account because if it’s not irrevocable, Medicaid will consider that an asset and then you’re over the $2,000 limit.
Host: So you have to share your financial records for looking back 5 years?
Deitra: Yes, and any quick claim deeds for transfers of the house, that could bring you into a penalty period, so that’s why we say speak with an estate attorney or elder law attorney to get all of your estate planning and financials in place before you’re even thinking about applying for Medicaid.
Host: So over that 5 years, you have to show that your bank account had less than $2,000 in it over that 5 year period?
Deitra: No, you have to show what transactions happened. Anything that’s over $500, Medicaid is going to be looking at. What happened with that money? So if you’re giving it to somebody, maybe a family member or friend, Medicaid is going to make that basically like a fraudulent transfer. It may not necessarily be fraudulent, but in their mind, that money was not used for the resident or for medical expenses, so they look at, they’re going to basically interrogate everything that’s $500 or more in the last 5 years done.
Host: Okay, gotcha. So I guess what I’m hearing from you is Medicaid is not a long term care solution you should bank on as you get older, is that right? This is for people that, for whatever reason, are low income, they have no assets, they have a bank account under $2,000 and they need help now. Is that what I’m hearing? Am I correct?
Deitra: Correct, correct.
Host: Not a long term solution.
Deitra: Yeah, it’s good for if it’s your final, it’s your last minute solution. But I would say go into planning ahead of time so that you don’t have to do Medicaid, but if you were to have to need it, it is your final solution basically.
Host: So you want to plan ahead and save and think ahead if you’re someone in your 40s or 50s so you don’t have to apply for Medicaid. You don’t want that.
Deitra: Yes, exactly.
Host: Okay, well this has been very, very informative. Is there anything else we should know about Medicaid that we didn’t touch on?
Deitra: I think there’s long term care insurance that some people get into and start when they’re younger. I think those are good alternatives before applying for Medicaid. There’s usually not – if you’re in rehab for long term, they usually don’t cover for the full extent of your stay. Eventually the funds deplete with that, but it keeps you from having to deplete all of your personal funds because you can use this long term care insurance, so that would be something to look into before ever thinking that you need Medicaid.
Host: Well that’s a great idea. So think about long term health insurance so you will never wind up having to use Medicaid, is that right?
Deitra: Yes, it’s all about being proactive.
Host: Proactive, okay that is the word, proactive. Love it. Well Deitra, thank you so much. This has been very interesting and thank you for your time. To learn more or if you’d like to book a tour, please visit cmsschicago.org, that’s cmsschicago.org. This is Living Well with Chicago Methodist Senior Services. I’m Bill Klaproth, thanks for listening.
Bill Klaproth (Host): Medicaid long term care is a great benefit for those who don’t have much savings or retirement income and now need services beyond what their families can provide. So here to talk with us about what you need to know about Medicaid for long term care is Deitra Lawson, Corporate Billing Director with Chicago Methodist Senior Services. Deitra, thank you for your time. So fill in the blanks for us on Medicaid. What is it and who is it for?
Deitra Lawson (Guest): Hi, glad to be here. Medicaid is basically the state government funding residents and families that don’t have much funds in order to cover them for different medical services. Specifically, we’re going to talk about nursing homes here.
Host: Okay, and before we go any further, I just want to ask you this, what is the difference between Medicaid and Medicare? Because I feel there’s some confusion out there.
Deitra: So Medicare covers with the Federal government. The Federal government covers them. Everyone is entitled to Medicare because we put money towards it when we’re in our working age. We are paying towards it everyday that we work. So once we become 65, Medicare automatically covers you, but that’s only for hospital stays and extra care that’s needed. After you’ve recovered from rehabilitation or a longer necessary medical stay, you need to have even more covered by a different provider and that’s where Medicaid steps in, and Medicaid works as the last payor of resort. So if someone else can pay less care or private pay or another insurance, Medicaid will not pay room and board. They have to be the last payor of resort. So that’s where the state comes in and helps with room and board assistance if no one else is available.
Host: So last payor of resort. So Medicare is Federal, Medicaid is state. Is that right?
Deitra: Correct.
Host: Okay, so who qualifies for Medicaid then?
Deitra: Anyone that has assets under $2,000. Usually you have spent down all of your finances and they have applied for, gone through the process of the application, but they usually have no other funds in order to cover their medical assistance. So you have to have your assets under $2,000 to qualify.
Host: Okay, what does Medicaid cover then? You mentioned nursing home. Can you expand on that a little bit?
Deitra: Well there’s different areas that Medicaid can cover. People can get food assistance, they can get community assistance with Medicaid, but the majority of Medicaid funding does cover the medical side like nursing homes and hospital stays, for coinsurance to Medicare and some small therapy services.
Host: So basically nursing home stays, also in home care and assisted living communities as well? Does that fit in there?
Deitra: Yes, all of those fit into Medicaid.
Host: So this is basically provisions for living. This is not medical coverage. Is that right?
Deitra: Well Medicaid does cover medical coverage because you have the room and board. You have – but usually when you have like a rehab stay, Medicare is going to pay first and then Medicaid will kick in to pay the coinsurance for that. So it does cover some medical coverages but usually it’s the coinsurance or the portion that another insurance payor could not pay.
Host: So for someone who wants to sign up for Medicaid, are there age requirements or other requirements? Who ultimately qualifies for Medicaid?
Deitra: Well the things to know with Medicaid, not everyone expects to be applying for Medicaid. It’s usually your kind of up against the wall and they’re backed into a corner when you need to apply because there’s nothing else. There’s no other finances. The bills are kind of piling up and the thing to remember is to prepare and be proactive before you ever need Medicaid because when you’re applying for Medicaid, they look 5 years prior from the date of application. So what I’d love for elders to know is that be more proactive in your estate planning before you ever even think you need Medicaid because Medicaid goes back 5 years and some things that you’ve done in that 5 year period may actually disqualify you for Medicaid and that makes you have a penalty period and it really becomes more complex once you actually file that Medicaid application. So some things to keep in mind is getting your estate planning done, talking to someone to get a power of attorney for property. I know a lot of the times we get a power of attorney for healthcare in place, but we don’t think about the power of attorney for property. The reason why we want to do that power of attorney for property is this helps with getting 5 years of bank statements, getting some of the financial information that’s required with a Medicaid application and we’ve had people where they don’t have that in place and what we have to do is start with a guardianship, a state guardianship process in order to even get 5 years of bank statements to work with a bank and that’s costly and it’s a whole court proceeding. So you can actually alleviate some of the frustrations that come with a Medicaid application by getting the estate planning done ahead of time. Prepaid burials is a big one you want to do before you even want to do a Medicaid application. You want to get all of that in place because once a Medicaid application is done, it’s harder to get it in place and not be considered another asset, and so you want to get your prepaid burials done before applying for Medicaid and make sure it’s an irrevocable account because if it’s not irrevocable, Medicaid will consider that an asset and then you’re over the $2,000 limit.
Host: So you have to share your financial records for looking back 5 years?
Deitra: Yes, and any quick claim deeds for transfers of the house, that could bring you into a penalty period, so that’s why we say speak with an estate attorney or elder law attorney to get all of your estate planning and financials in place before you’re even thinking about applying for Medicaid.
Host: So over that 5 years, you have to show that your bank account had less than $2,000 in it over that 5 year period?
Deitra: No, you have to show what transactions happened. Anything that’s over $500, Medicaid is going to be looking at. What happened with that money? So if you’re giving it to somebody, maybe a family member or friend, Medicaid is going to make that basically like a fraudulent transfer. It may not necessarily be fraudulent, but in their mind, that money was not used for the resident or for medical expenses, so they look at, they’re going to basically interrogate everything that’s $500 or more in the last 5 years done.
Host: Okay, gotcha. So I guess what I’m hearing from you is Medicaid is not a long term care solution you should bank on as you get older, is that right? This is for people that, for whatever reason, are low income, they have no assets, they have a bank account under $2,000 and they need help now. Is that what I’m hearing? Am I correct?
Deitra: Correct, correct.
Host: Not a long term solution.
Deitra: Yeah, it’s good for if it’s your final, it’s your last minute solution. But I would say go into planning ahead of time so that you don’t have to do Medicaid, but if you were to have to need it, it is your final solution basically.
Host: So you want to plan ahead and save and think ahead if you’re someone in your 40s or 50s so you don’t have to apply for Medicaid. You don’t want that.
Deitra: Yes, exactly.
Host: Okay, well this has been very, very informative. Is there anything else we should know about Medicaid that we didn’t touch on?
Deitra: I think there’s long term care insurance that some people get into and start when they’re younger. I think those are good alternatives before applying for Medicaid. There’s usually not – if you’re in rehab for long term, they usually don’t cover for the full extent of your stay. Eventually the funds deplete with that, but it keeps you from having to deplete all of your personal funds because you can use this long term care insurance, so that would be something to look into before ever thinking that you need Medicaid.
Host: Well that’s a great idea. So think about long term health insurance so you will never wind up having to use Medicaid, is that right?
Deitra: Yes, it’s all about being proactive.
Host: Proactive, okay that is the word, proactive. Love it. Well Deitra, thank you so much. This has been very interesting and thank you for your time. To learn more or if you’d like to book a tour, please visit cmsschicago.org, that’s cmsschicago.org. This is Living Well with Chicago Methodist Senior Services. I’m Bill Klaproth, thanks for listening.