What About Medicare and Medicaid? (Cont.)

Medicare and Medicaid contributions to long term care costs.

What Medicare Covers

Medicare was designed to pay expenses for short-term acute situations. It mainly covers hospital bills and doctor bills.

Medicare will pay for nursing home expenses in full for the first 20 days and partially for the next 80 days. It only pays for skilled care, however, and under very limited circumstances.

Medicare does not cover custodial care, which is required by 95% of people in a nursing home.

Medicare Supplements

The purpose of Medicare Supplements, also known as Medigap policies, is to help pay the difference from where Medicare leaves off. But bear in mind that these policies are usually designed to cover benefit gaps only, and coverage gaps will remain. No policy pays for everything that Medicare does not.

Medicaid

To qualify for Medicaid, you must have a very low income and few assets. The regulations vary from state to state, but as a general rule, you will probably qualify for food stamps before you qualify for Medicaid.

The real problem for those who seek help from Medicaid is that to qualify, you must "spend down" to government established poverty levels. This means getting rid of most, if not all, of the assets you've spent a lifetime accumulating.

The Kennedy-Kassebaum Legislation, of 1996 prescribes a criminal penalty for advising someone to dispose of assets to obtain Medicaid benefits.