Unraveling the Pieces of Medicare

Posted on May 11, 2024 by shieldsandboris

Medicare is a federal health insurance program for people 65 years of age and older. Some younger people—those with qualifying disabilities or end-stage renal disease—may also qualify for benefits. If you have a lot of questions about how Medicare works, you are far from alone. At The Elder Law Offices of Shields & Boris, we are a law firm committed to helping people and families deal with the challenge of aging. Here, our Pennsylvania elder law attorney provides a guide to help you start unraveling the pieces of Medicare, including its role (or lack thereof) in long-term care.

An Overview of Medicare Benefits

Medicare is a comprehensive federal health insurance program that is primarily designed to protect senior citizens. There are actually four different “parts” of Medicare:

  • Medicare Part A: Medicare Part A primarily covers hospital stays, short-term skilled nursing facility care, hospice care, and some home health care. This type of Medicare coverage is usually premium-free for qualifying individuals.
  • Medicare Part B: Part B of Medicare covers two types of services—medically necessary services needed to diagnose or treat medical conditions, and preventive services to prevent illnesses or detect them at an early stage. Part B covers things like outpatient care, doctor services, and durable medical equipment. There is a monthly premium to enroll in Medicare Part B. It is based on a person’s income.
  • Medicare Part C: Medicare Part C is Medicare Advantage. It is this part of Medicare that is supplemental, private insurance that beneficiaries can opt to enroll in to enhance the coverage that they have through Part A and Part B.
  • Medicare Part D: Medicare Part D is prescription drug insurance. It is also administered by private insurance companies. As most senior citizens know well, medications costs can add up. Medicare Part D can help to reduce that financial burden.

You Need to Enroll in Medicare—and You May Want to Give a Loved One Authority

Once you turn 65 years of age, you can qualify to enroll in Medicare. It does not matter your income level or your level of assets. However, it is crucial to dispel a common myth: Many people believe that Medicare enrollment is always automatic. That is not necessarily the case. Here is what you need to know about Medicare enrollment:

You will be enrolled in Medicare Part A and Medicare Part B automatically when you start receiving Social Security benefits; If you do not receive Social Security benefits at age 65, you need to enroll in Medicare Part B on your own. You should do so within three months of your 65 birthday, or you may need to wait or pay a penalty.

You need to enroll on Medicare Part C and Medicare Part D benefits on your own if you want those additional supplemental benefits.

Given the complexities of healthcare decisions in later life, assigning a trusted loved one with the authority to make healthcare decisions may be the best option. If you are granted a loved one health care power of attorney (POA), be sure to include a Medicare authorization form to make it easier for them to handle your Medicare benefits.

Medicare Provides Only Limited Coverage for Long-Term Care/Nursing Home Care

Medicare’s coverage for long-term care is notably limited. It does not cover custodial care, which is the most common type of long-term care—assistance with daily activities like bathing and dressing. Further, Medicaid does not cover long-term or (likely) permanent nursing home cases. Instead, Medicare will only cover skilled nursing or therapy services on a short-term basis. Medicare’s nursing home coverage is meant to be for short-term transitions for recovering after a hospital stay.

What to Know About Medicaid Benefits for Long-Term Care

It is Medicaid, not Medicare, that is the government program that provides coverage for long-term care costs. This is a very important distinction. All seniors can enroll in Medicare. In contrast, Medicaid is only available for those with financial needs—meaning a person must have limited assets and limited income before Medicaid will step in and provide long-term care support. Here are some of the most important points that you should be aware of:

  • Long-Term Care Costs Can Be Covered By Medicaid: For those who meet the eligibility criteria, Medicaid can cover the extensive costs of long-term care, including both in-home care services and full-time residence in a nursing home. Unlike Medicare, Medicaid can fund long-term custodial care—which is crucial for many elderly or disabled individuals.
  • Medicaid is Strictly Means-Tested: Eligibility for Medicaid depends strictly on income and asset levels. To qualify, individuals must fall within the low-income bracket and meet specific asset criteria. A person may be required to “spend down” their own personal assets before they can qualify for Medicaid. This could quickly eat away at someone’s life savings.
  • Proactive Strategies Can Help to Protect Your Assets: Since Medicaid eligibility requires meeting stringent financial criteria, proactive planning—such as setting up an irrevocable trust, a Medicaid-compliant annuity, or engaging in early gifting—can help protect an individual's assets while still qualifying for necessary long-term care under Medicaid.
  • A Five-Year Lookback Period for Medicaid in Pennsylvania: In Pennsylvania, Medicaid applies a five-year look-back period for asset transfers. Any asset transfers made within five years prior to applying for Medicaid can be scrutinized for purposes. If transfers are found to violate eligibility rules, Medicaid could seek to “undo” those transfers before eligibility. For example, imagine that a trust is set up in April of 2023. In December of 2023, the trust grantor then applied for long-term care coverage through Medicaid. That trust would not be protected because Medicaid can look back at five years worth of transfers.

Speak to an Elder Law Attorney in Western Pennsylvania Today

At The Elder Law Offices of Shields & Boris, our Pennsylvania elder lawyers are skilled and experienced advocates for people and families. If you have any questions about Medicare or Medicaid, we are here to help. Call us today at (724) 204-6628 or contact us online for a fully confidential initial appointment. We provide elder law support throughout Western Pennsylvania.

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