There is often a lot of confusion regarding the difference between Medicaid and Medicare when people first begin planning for long-term care needs, or are unexpectedly faced with needing nursing home care for an extended period of time. Medicaid and Medicare are both run by the state, but are very different insurance policies.
Medicare
Medicare is paid for throughout your life, as you work. Employers are required to deduct a Medicare tax from each paycheck. That money is what insures you will have Medicare coverage when you need it. The problem with relying on Medicare for long-term care planning is that Medicare will only cover 100 days in a nursing home, and you have to be improving during that time. If your rehabilitation is not possible, Medicare will stop covering your stay.
Medicaid
Unlike Medicare, not everyone can qualify for Medicaid, which is need based. When you are admitted to a nursing home, if you are unable to pay for the monthly cost of care privately or via insurance, Medicaid may be an option. Medicaid has strict financial limits in what you can own in assets, how much assets you have given away prior to needing coverage and how much you can earn. If you plan to use Medicaid as a way to provide long-term care, it is very important that you consult with a qualified elder law attorney as soon as possible to be certain your estate is in order so that you can qualify for Medicaid.
