What is Medicaid?
Medicaid is a federal and state funded health insurance program for low-income individuals and families. While the federal government sets program guidelines, each of the states is given the flexibility to run their Medicaid program as they see fit within the federally set parameters. States have several different Medicaid programs that target different audiences. For example, there are programs designed for low-income families, pregnant women, individuals with disabilities, and the elderly. These programs offer different benefits to the participant, as well as have varying functional and financial eligibility criteria. Relative to the elderly and disabled, there is both an income limit and asset limit
Medicaid vs. Medicare
Since Medicare, a federal program, and Medicaid, a state and federal program, both provide health insurance benefits to the elderly, there exists much confusion about these two programs. Medicare is an optional health insurance program available to all Americans aged 65 and older. Income and assets are not considered for eligibility purposes. Medicaid is health insurance specifically designed for low-income persons, and relative to the elderly and disabled, also limited financial resources. Medicaid has strict income and asset limits and applicants’ finances are closely scrutinized.
It is possible to be eligible for Medicaid and Medicare at the same time; these individuals are called “dual eligibles”. Seniors who are enrolled in both programs generally have good health coverage. While Medicare will not cover long-term care benefits, Medicaid will. As an example, Medicare will cover skilled nursing home care, but only on a short-term basis, up to 100 days. In contrast, Medicaid does not limit the number of days they will pay for skilled nursing home care. Furthermore, while Medicare will not pay for in-home personal care and non-medical nursing home care, Medicaid will. Medicaid may also pick up some of the out-of-pocket costs that Medicare does not, such as Medicare premiums and co-payments. Note: Certain Medicare Advantage plans offer some long-term care Home and Community Based Services, such as personal care assistance, as a supplemental benefit.
Regular Medicaid vs. Long-Term Care Medicaid
Regular Medicaid, also called Medical Medicaid or State Plan Medicaid, provides a wide range of medical services, such as physician visits, hospitalization, laboratory tests, prescription drugs, and preventive care. Relevant to seniors, it is commonly called Aged, Blind and Disabled Medicaid. Under the state plan, states are required to provide home health benefits, such as home health aide services, nursing services, and medical supplies / equipment. Although not required, many states also provide personal care services as a state plan benefit. For home health services and personal care assistance, an applicant must have a functional need for such care.
Long-Term Care Medicaid (LTC Medicaid) provides Long-Term Services and Supports (LTSS) for seniors and persons with disabilities who require assistance with daily living activities. Also called Activities of Daily Living (ADLs), these activities include bathing, dressing, toileting, eating, and mobility. While LTC can be provided in an institutional setting (i.e., nursing home), it may also be provided in one’s home and / or community to prevent and / or delay the need for institutionalization. These Home and Community Based Services (HCBS) may include adult day health care, personal care assistance, homemaker services, assisted living services, adult foster care services, personal emergency response systems, home modifications, vehicle modifications, assistive technology, transitional services (to assist one in moving from a nursing home back to one’s home or community), home delivered meals, and respite care.
Nursing Home Care vs. Home and Community Based Services
Medicaid, in all states, will pay for care for Medicaid-eligible individuals that reside in nursing homes. While this is a type of long-term care, it may also be called Institutional Medicaid. Medicaid also offers Home and Community Based Services (HCBS), which are programs that provide assistance to individuals who live outside of nursing homes. Individuals enrolled in a HCBS program reside at home or in their community. Community, in this case, refers to living in the home of a caregiver or a family member, a board and care home, an assisted living residence, an adult foster care home, or a senior living community.
Waivers are state-specific Medicaid programs that allow for long-term services and supports to be provided outside of nursing homes. Generally, Home and Community Based Services (HCBS) are provided via a type of Medicaid Waiver. States can, however, provide long-term care through their Regular Medicaid program, and as mentioned previously, many states do offer personal care services as a benefit. Commonly, states provide long-term care via both avenues.
To avoid confusion, it is worth mentioning that HCBS Waivers are also called Waiver programs, Waiver services, and 1915 (c) Waivers. This is because they are authorized under section 1915 of the Social Security Act. They also go by state-specific names, such as the California (Medi-Cal) Assisted Living Waiver or the Ohio PASSPORT Waiver. Some states also offer Home and Community Based Services via 1115 Demonstration Waivers.
A very important distinction between Nursing Home Medicaid and Medicaid Waivers is that Nursing Home Medicaid is considered an entitlement program, while Waivers are not. Entitlement, in this situation, means that if one meets the eligibility requirements, they are guaranteed to receive benefits. With Medicaid Waivers, one might meet the eligibility requirements, but be unable to enroll in the program. This is because waivers limit the number of individuals who can receive services. Therefore, an otherwise eligible person may be put on a waiting list to receive benefits, given the program’s enrollment cap has been met. Medicaid Waivers may also limit their services to specific geographic regions within a state, as well as to specific medical diagnoses, such as Alzheimer’s disease.
Managed Care Organizations (MCOs)
Many states have turned to managed care to deliver the services provided under their Medicaid programs. This means that the states’ Medicaid agencies work with Managed Care Organizations (MCOs). MCOs deliver needed services to Medicaid recipients through a network of care providers, which enables enrolled individuals to have all of their needs met through their MCO. This system is found to be less costly for the state, as well as provides a convenience to Medicaid enrollees. A common complaint among beneficiaries is the limited availability of their doctors under managed care.
Community Spouse & Institutional Spouse
When one spouse of a married couple applies for Institutional Medicaid (i.e., nursing home care) or Home and Community Based Services via a Medicaid Waiver, this individual is called the Institutional Spouse or Needy Spouse. The other spouse, who is not applying for Long-Term Care Medicaid and does not require nursing home care nor Home and Community Based Services, is called the Healthy Spouse, Well Spouse, or Community Spouse.
Nursing Facility Level of Care
For Nursing Home Medicaid and many Medicaid Waivers, an eligibility requirement is that one requires a Nursing Facility Level of Care (NFLOC). This means that one requires the level of care that is provided in a nursing home. A functional needs assessment, often completed by a medical professional, is done to determine if one requires a NFLOC. Generally, this assessment is based on one’s ability to perform basic Activities of Daily Living, such as mobility, bathing, dressing, and toiletry. Each state, however, has its own criteria for establishing NFLOC.