The federal government has established two major initiatives to help cover the cost of elder care - namely, Medicare and Medicaid.
Medicare
Medicare provides health insurance benefits for those persons who are over sixty-five years of age or disabled. The program covers part of your expenses for any short-term medical problems and pays for hospitalization, surgery, doctor bills, home health care, and skilled nursing care if it is deemed medically necessary and is found at a reasonable cost. Medicare is divided into three parts:
Part A: Hospital insurance
If your loved one is eligible for Social Security, he or she is entitled to Part A Medicare coverage at no cost once he or she reaches the age of sixty-five. At sixty-four, three months prior to their birth month, a Medicare Card should arrive by mail.
If, on the other hand, your loved one is not eligible for Social Security, he or she may enroll in the program and pay a monthly premium (based on the number of quarters of Social Security coverage earned: $309/month rate of year 2000 for an individual with twenty-nine or fewer quarters). Call SSA at 1-800-772-1213 to find out how to enroll.
Part A covers hospitalization, nursing home care, hospice care, home health care and blood related costs. Let's look at each more closely.
1. Hospitalization
Should your loved one require hospitalization, Part A will help cover the cost.
- Once you exceed your deductible, Part A pays all costs from day one until day sixty.
- From day sixty-one until day ninety, Part A covers all costs once you have paid your co-insurance payments.
2. Nursing home care
Part A will help cover the cost of a nursing home stay to recover from illness.- Part A pays all approved amounts for your first twenty days of care in a skilled nursing facility after you have been in the hospital for over three days.
- Between day twenty-one and day 100, Part A pays all costs above your co-insurance payments.
3. Hospice care
If your loved one is suffering from an incurable condition and you'd prefer not to opt for traditional hospital care, hospice care is an alternative. The hospice approach focuses on coping with illness through support, therapy, and pain-killing drugs rather than traditional medicines and surgery.- Part A covers all costs.
- There are limits on outpatient drugs and inpatient respite care.
4. Home health care
Part A will help to cover home health care costs should you choose to move your ailing loved one back into the home to recover.- Part A pays all approved home healthcare services.
- Part A will cover eighty percent of approved medical equipment.
5. Blood
Lastly, Part A will help cover the cost of blood transfusions.- You must pay for the first three pints and Part A covers any additional blood needed.
Part B: Doctors, outpatient hospital, and clinic services insurance
If you feel that you require the services covered by Medicare's Part B plan, you'll need to enroll and pay a monthly premium of $45.50 in 2000 (for outpatient service).
Part B Covers the medical services, tests, outpatient, and blood related costs. Let's look at each more closely.
1. Medical Services
Once you meet your deductible, Part B coverage will pay eighty percent of approved amounts for doctors, surgeons, supplies, and medical equipment. The remaining twenty percent is the patient's responsibility. It's important to understand that a participating "Medicare doctor" is only permitted to bill up to a specified amount. Doctors are given the option of whether they will participate in the program.
2. Tests
All approved amounts for medical tests, lab work, biopsies, and blood work are covered under Part B.
3. Home health care
Part B will help to cover home health care costs.
- There is no deductible.
- Part B covers all approved home health care services.
- Part B covers eighty percent of the cost of medical equipment used in the home.
4. Outpatient hospital care
Part B covers eighty percent of all approved outpatient procedures performed in a hospital.
5. Blood
Lastly, Part B will help cover the cost of blood transfusions.
- You must pay for the first three pints and Part B covers any additional blood needed.
Part C: Medicare + Choice
Medicare Part C is the newest plan offered under the Medicare system. It is a private plan alternative to the more traditional fee-for-service option. Under Medicare C recipients are covered for all services included in Parts A and B and may also choose from the following:
- HMO, or health maintenance organization
- PPO, or preferred provider organization
- PSO, or provider sponsored organization
- MSA, or medical savings account
- Private fee-for-service plans
What's not covered by Medicare?
Although Medicare covers a good deal of the expenses associated with elder care, there are some costs that are ineligible for payment under its plans. Private insurance can cover the charges that might be excluded; check with the health care provider insurance administrator. Costs that are not covered:
- Nursing care beyond 100 days in a professional nursing facility, private nursing care, or any other unapproved nursing care. (note: 100 days is one-third of a year, not a lot of time)
- Custodial or intermediate nursing care
- Doctor bills that are above approved Medicare levels or that are considered medically unnecessary. Check government list for a yearly update to procedures and maximum allowable fees. Ask Medicare if they will accept assignment
- Medical care received in foreign countries (certain exceptions made in Canada and Mexico
- Prescription drugs not dispensed in a hospital
- Routine physicals, dentistry, acupuncture, cosmetic surgery, immunizations
Medigap
Should Medicare not cover all of the expenses your loved one might incur, Medicare supplemental insurance, often known as Medigap, is available. A Medigap policy is a private insurance policy that can be purchased during the first six months that he or she is age sixty-five or older and enrolled in Medicare Part B. (The six month open enrollment period starts once the individual is enrolled and can not be changed; few exceptions apply)
Medicaid
Medicaid is federal- and state-funded assistance offered to those who are near or below the poverty level and have no other means to pay for their care. This level is set by a household income of $8,350 for a single individual, and $2,900 for each additional family member.
For example: A family of four, to be eligible for Medicaid, must have a combined income of less than $17,050 per year.
It is important to understand that Medicaid is designed as a last resort and will not be offered unless virtually all income is being used for paying medical and long-term costs.
Medicaid guidelines
In order to qualify for and remain on Medicaid, your loved one must obey the following rules:
- You may not give away assets in order to meet income standards that qualify you for Medicaid assistance.
- All money that an applicant receives qualifies as "income" - even Social Security checks, when being considered for Medicaid assistance.
Continue to:
Part V: Long-term care
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