Understanding Medicare and Medicaid

By Kim Chernecky

Most people confuse Medicare and Medicaid. When most American citizens retire, we are entitled to social security benefits (assuming we have paid into the SSI system) as well as Medicare for our medical coverage. For example, teachers do not pay into the Medicare system. Instead they have a private insurance program that they are able to continue after retirement.

Medicare is insurance for seniors or the disabled. Medicare part A & B covers hospital and doctors visits. Medicare part D is for prescription coverage. This part of the program costs extra.

Most states also have alternative Medicare HMO’s available. These plans take the place of Medicare. By law they are required to provide the same level of coverage as Medicare or more. The problem with Medicare HMO’s is that often there are restrictions as to where patients may go for care. Those that opt into the Medicare HMO’s must go to providers within the plan for maximum coverage.

Medicaid is based on income-eligibility and is a state-sponsored plan. Medicaid plans vary from state to state. Funding for Medicaid comes from each individual state and guidelines will vary based on their individual eligibility requirements.

Medi-gap insurance is designed to pay a portion of expenses that are not paid by Medicare. These are optional plans and must be purchased separately. What most people don’t understand is that Medi-gap plans generally (most, not all) cover just the portion that Medicare does not cover for allowable expenses.

What does this mean? Medicare does not cover routine costs. For example, a routine eye exam is not an allowable expense. Most people would assume that the Medi-gap would then cover that fee. But it does not. Medi-gap only covers its portion of Medicare’s allowable expenses. Any non-covered expenses would then become the responsibility of the patient.

So what’s allowable? Generally most visits are considered allowable if there is a medical diagnosis. You can download a free guide from www.Medicare.gov. When a person becomes frail, elderly, or confused and is no longer able to care for themselves and needs a caregiver to help with bathing, dressing, medication reminding, or supervision so they don’t fall, etc. most people assume that Medicare will pay to have a home health aide come in and care for that person.

Unfortunately, this assumption is WRONG, WRONG, WRONG. While it may make sense to the rest of us that this is a necessary expense to care for the patient properly, Medicare will not cover this type of care. Personal care assistance such as this is called custodial care. Even though having a caregiver for an elderly, frail, or confused person is for the safety of that patient, Medicare will not pay for this type of care. The only time Medicare will pay for this type of assistance is when the patient is receiving some type of skilled care such as physical or occupational therapy, wound care, IV therapy, etc. that is provided by a skilled medical provider.

While the patient is under a doctor’s order to receive this type of medical care, such as after being discharged from the hospital, Medicare will pay for a very limited amount of caregiver assistance, but only while the patient is receiving skilled care. For instance, if a patient is discharged and has a doctor’s order to receive physical therapy for 8 weeks, during that time a caregiver may be provided to help with bathing and dressing 2-3 time a week but only for the 8 week duration. Once therapy is discontinued, the caregiver is no longer covered by Medicare.

Another thing to note about therapy and Medicare coverage is if your loved one does not show signs of improvement during therapy, or worse, refuses to participate in therapy (it happens) Medicare will deny coverage and the medical provider will be forced to discontinue the therapy, even if it is still necessary for the well-being of the patient. So do your very best to urge Mom, Dad, or Grandma to do their therapy faithfully, even accompanying them if necessary. It can mean the difference between regaining their independence or needing constant care-giving. In some cases it can even mean the difference between life and death.

Request a FREE MEDICARE GUIDE: A complete (and free!) guide is available upon request from Medicare. You should receive one automatically every year, but if you misplaced yours or never received one, you can call Medicare at: 1-800-MEDICARE (1-800-633-4227) 24 hours a day, 7 days a week. The website is also a wealth of information. You can find out what is covered, contact information, how to appeal a claim or file a complaint, and much more. This is a great resource for family members and caregivers. Check it out!