What is Medicaid?
Medicaid is a federal and state funded health insurance program for low-income individuals and families. While the federal government sets specific program guidelines, each of the states is given the flexibility to run their Medicaid program as they see fit within the federally set parameters. Most states have several different Medicaid programs that target different audiences. For example, one program may be designed for low-income families, another for pregnant women, yet another for disabled individuals, and a fourth for the elderly. Each of these programs will offer different benefits to the participant, as well as have different functional and financial eligibility criteria.
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 or older. Stated very clearly, income and assets are not considered for eligibility purposes. On the other hand, Medicaid is health insurance specifically designed for low-income persons with limited financial resources. Medicaid has strict income and asset limits and applicants’ finances are closely scrutinized.
It is possible to be eligible for both programs at the same time; these individuals are referred to as “dual eligibles”. Seniors who are enrolled in both programs generally have quite good health coverage. For instance, Medicare will not cover long-term care benefits, but Medicaid will. As an example, Medicare will cover 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 nursing home care. Medicaid may also pick up some of the out-of-pocket costs that Medicare does not, such as Medicare premiums and co-payments. (Some Medicare Advantage plans now offer some long-term care home and community based services, such as personal care assistance, as a supplemental benefit).
Nursing Home Care vs. Home and Community Based Services
Medicaid, in all states, pays for care for individuals that reside in nursing homes; this is often referred to as Long Term Care Medicaid, LTC Medicaid, or Institutional Medicaid. Medicaid also offers Home and Community Based Services (HCBS), which are programs that provide services 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, a family member, a board and care home, an assisted living residence, adult foster care home, or a senior living community. The terminology, “Community,” is meant as a distinction between someone who does not live in their own home, but does not live in a nursing home.
Waivers are state specific Medicaid programs that allow for services to be provided outside of nursing homes. The previously mentioned, Home and Community Based Services (HCBS), generally are provided via a type of Medicaid waiver. However, some states provide long-term HCBS through their state Medicaid program and other states provide this type of care through both avenues.
To avoid confusion, it is worth mentioning that HCBS waivers are also called 1915 (c) waivers (because it is under section 1915 of the Social Security Act in which they are authorized), waiver services, waiver programs, and by any number of other 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 entitled to receive benefits. Said another way, they will automatically receive services. 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 are able to 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. In addition, Medicaid waivers may 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. That said, a common compliant 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 Medicaid and is need of institutional care (nursing home care) or home and community based services via a Medicaid waiver, this individual in Medicaid terminology is called the “Institutional Spouse.” Another term one might hear to describe this same situation is “Needy Spouse.” The healthy spouse, who is not applying for Medicaid and does not require nursing home care or home and community based services, is called the “Healthy Spouse.” Other common terms include “Well Spouse” and “Community Spouse”.
Nursing Facility Level of Care
For many long-term care Medicaid programs, an eligibility requirement is that one requires a Nursing Facility Level of Care (NFLOC). This means that the level of care an applicant requires to be admitted to a nursing home or to continue to live in the community (i.e., their home, the home of a relative, an adult foster care home, etc.) is consistent with the level of care that is provided in a nursing home. A medical professional provides an assessment 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. However, it’s important to note, each state has its own criteria for establishing NFLOC.