Recently I received a phone call from a concerned daughter whose 94-year-old mother had just moved to assisted living. A well-meaning friend had convinced the caller that she needed to contact an elder law attorney to talk about “Medicare Estate Recovery.” The caller was concerned that Medicare would seek reimbursement for expenses paid by the program.
However, there is no such thing as Medicare Estate Recovery; what the caller’s well-meaning friend was referencing is Medicaid Estate Recovery. The caller’s mom was in an assisted living facility being paid for by her own funds, and at 94 she was doing just fine. I assured the caller that at this point, the State of Texas would not be attempting to recover any assets from her mother’s estate because the State of Texas hadn’t spent any money to care for her mom.
Because the names are so similar, it is easy for people to confuse Medicare and Medicaid. Even attorneys who do not practice in this area get confused about these programs. The names are remarkably similar, but the programs are different in every way except that they are both government health programs.
Medicare is like private health insurance and is administered by the Social Security Administration. People pay into the system while they are working, then pay a premium to receive different levels coverage. The higher premiums paid, the more coverage received, just like other forms of insurance. There are rules about what Medicare will and will not cover, and there are healthcare providers who either accept Medicare or do not, just like other forms of insurance. Every citizen is eligible at 65, younger if they have a disability determined by the Social Security Administration, and eligibility does not depend on how little money a person has. Once a person meets the age or disability requirements, they are entitled to receive Medicare.
Medicaid is a different animal altogether. The Medicaid programs (and there are many) are operated as a partnership by the federal and state governments. Medicaid is funded by both federal and state money, but the programs are administered by each state, meaning that each state’s Medicaid programs are different. This article focuses on programs available to persons who are blind, disabled, or elderly. Those programs a generally means-tested, meaning a person’s income and assets have to be below a certain amount to qualify. There also has to be a medical necessity to qualify. If an applicant does not meet the qualifications then they will not be approved for the program. Unlike Medicare, no one is entitled to Medicaid; a person must prove they need access to the program. Medicaid is the largest single payer of the American nursing home bills because nursing home bills often far exceed the retirement savings of American families.