Long-term planning for long-term care

Long-term planning for long-term care


Every day, it seems, we hear about changes to Medicare and Medicaid. Often people I counsel with are confused about the difference between Medicare and Medicaid. Both programs were created by federal law, but they do very different things. The one common denominator is both of those worlds can be difficult to navigate, especially for the elderly.

Essentially, Medicare is a health insurance program for people over age 65, while Medicaid is a health insurance program for people who meet certain income and asset requirements. Where people get confused is that Medicare will pay for some rehabilitative services in a nursing home. Medicaid, on the other hand, pays for long-term care, provided you qualify. In Tennessee that means financially you can have no more than $2000 in your name and make no more than $2,250 a month in income to qualify for this Medicaid coverage. So, if you or a loved one is head to a nursing home, Medicare and Medicaid are limited.

To provide a general understanding of how each program works, I asked Ross Rainwater with Health Markets located here in Brentwood to clear up some of the common misconceptions.

Q:  If Medicare does not pay for long-term care, then what are my options?

RR: Most people know about Long-Term Care (LTC) insurance, but it can be very expensive and fewer insurance companies are offering traditional LTC. In recent years, other products that cover several needed services surrounding nursing or home care, such as home care, recovery, nursing facility, continental care and indemnity plans have come into the marketplace. Also, some life insurance plans are available with riders that pay for LTC and similar services, provided they are outside a LTC setting. There are also ways to qualify for Medicaid without spending every last dime you’ve ever earned. A good estate planning attorney can help you assess whether Medicaid planning is an option for you and your family.

Q: I have heard of Medicare Supplement Insurance.  How do those work?

A: Supplements, or as they are sometimes called a “Medigap” policy, help pay some of the health care costs that original Medicare does not cover, like co-pays, co-insurance, and deductibles. Supplement policies are sold by private companies. They cover services and costs beyond original Medicare. To make it more complicated, in addition to the supplement plans everyone enrolled in Medicare is required to join a prescription drug plan (PDP), known as Part D. If you don’t join, then Medicare penalizes you for every month you are not covered. It is important to point out that supplements and prescription drug plans have additional monthly premiums.

Q:  Is a supplement the same thing as Advantage Plan?

A:  No. Think of an Advantage Plan as a way to get Medicare benefits, while a supplement policy supplements original Medicare benefits. Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by private companies that are approved by Medicare. If you join a Medicare Advantage Plan, you still have Medicare. You still get Part A which covers the hospital and Part B that covers medical costs like doctor visits.  Medicare has just contracted through that company to administer and provide your benefits. Advantage Plans cover all Medicare services, but most Advantage Plans also offer extra coverage, like vision, hearing and dental coverage.

Where it gets complicated is that each Medicare Advantage Plan can charge different out-of-pocket costs. They can also have different rules for how you get services, like needing a referral for specialist and co-pays to within the plan’s network. Most Advantage Plans include prescription drugs coverage and that can vary widely. Because there are so many options I highly recommend individuals enrolling in Medicare find a licensed representative to navigate through these choices.

If you are approaching age 65, you should consider sitting down with Ross Rainwater at Health Markets to explore your options. You can reach him at rrainwater@healthmarkets.com. He provides that service at no additional cost to the consumer. As an estate planning attorney, I think it is vital to take a holistic approach to planning by creating a team of professionals such as financial planners, insurance agents, bankers, and realtors, to help you make the best decisions.

Randy Ratliff is a Brentwood attorney practicing estate and elder law. He can be reached at trust@RandyRatliff.comor www.randyratliff.com

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