Medicare / Medicaid

As I consider this article and putting Medicare and Medicaid into a nutshell, squirrels scamper outside my window. The fall preparation and resiliency of these creatures are tested by our long Idaho winters. Winter has been aptly compared to old age. The Roman poet Ovid wrote, “Then with faltering steps, and shriveled, shivering, old winter treads; now all its hair is gone-or any left is white.” Like winter, old age is a test of a lifetime of preparation and an individual’s resiliency


Procuring and paying for medical care is one of the challenges of old age. Medicare is a federal program intended to provide financial protection against medical care costs for older adults. Eligibility requirements for Medicare include being age 65 and over and qualifying for Social Security or Railroad retirement benefits. Medicare is divided into different parts. Part A coverage is premium-free and covers expenses related to hospitalization and related care and equipment, inpatient care at a skilled nursing facility, home health care, and hospice. Part B of Medicare is a voluntary supplemental insurance to Part A. In 2012, the Part B premium for individuals earning less than $85,000 annually was $99.90. Part B covers physician’s services, medical supplies, and many other services not covered by Part A. Many people entering older adulthood assume that their health care costs will be covered by Medicare. While the goal of Medicare is financial protection, only a percentage of health care expenses for the elderly are paid by Medicare. Unfortunately, limitations and exclusions of the Medicare program result in a gap in coverage. This gap in coverage is paid by a number of different sources including self-funding, private supplemental insurance, the Veterans Administration, and Medicaid.


Medicaid is a joint federal and state program. It was developed through legislation in the 1960s to offer assistance to people without the financial means to pay for necessary medical care. Accordingly, a means test for assets and income determine eligibility for Medicaid. Assets are treated as either “countable” or exempt. For example, exempt assets commonly include a primary residence, personal furnishings, prepaid funeral and one vehicle. Countable assets include cash, savings and checking accounts, IRAs and the cash value of insurance policies. Before an individual can qualify for Medicaid, countable assets must be exhausted. Special consideration is afforded to spouses of nursing home residents. Spouses are allowed to keep monthly income such as Social Security benefits and retain a portion of the couple’s joint assets. During older adulthood, Medicaid often provides funding for nursing home care that would otherwise be unaffordable to many.  Next month we will review some Medicaid misconceptions and mistakes to look out for.


Medicare and Medicaid rules are complex.  If you have a specific question, you should consult with an attorney.