People frequently operate under the misconception that Medicare and Medicaid are the same program. Although Medicare and Medicaid are both government sponsored healthcare programs, they serve different purposes, have distinct eligibility requirements, and provide different types of coverage. Understanding the differences between the two programs is crucial for seniors who may need to rely on both programs during their retirement years. With that in mind, the Indianapolis attorneys at Frank & Kraft discuss what Indiana seniors need to know about Medicare and Medicaid.
What Is Medicare?
Medicare is a healthcare program that is administered by the federal government. Medicare is an “entitlement program,” meaning participants are entitled to benefits from the program without having to prove a financial need for benefits. During your working years, you pay into Medicare through payroll withholding, making you automatically eligible to participate in the Medicare program when you retire. Certain people with disabilities can also be eligible for Medicare benefits before reaching retirement age. Benefits under Medicare are divided into four parts and include:
- Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care.
- Part B (Medical Insurance): Covers outpatient care, doctor visits, preventive services, and some home health care.
- Part C (Medicare Advantage Plans): Offers an alternative to Original Medicare, allowing private insurance companies to provide Parts A and B, often with additional benefits like vision, dental, and prescription drug coverage.
- Part D (Prescription Drug Coverage): Helps cover the cost of prescription medications.
Most people do not pay a premium for Medicare Part A; however, Parts B and D do require monthly premiums, and there may be out-of-pocket costs such as deductibles, co-payments, and co-insurance.
What Is Medicaid?
Medicaid is a healthcare program that is primarily funded by the federal government (with voluntary state subsidies) but is administered by the states. Medicaid provides healthcare coverage to low-income individuals, including seniors, children, pregnant women, and people with disabilities. Medicaid is a “needs-based program,” meaning that an applicant must show a financial need to be eligible for benefits. For eligible participants, Medicaid is free. There are no premiums, no deductibles, and no copays. Because Medicaid is administered by the states, eligibility requirements and benefits can vary slightly from one state to the other.
Why Might I Need to Qualify for Medicaid If I Have Medicare?
Most seniors are automatically enrolled in the Medicare program when they reach retirement age. As a retiree, you will likely rely on Medicare to cover most of your healthcare expenses; however, Medicare does not cover expenses related to long-term care and when you enter your retirement years you will already stand about a 70 percent chance of needing some type of LTC services before the end of your life. Given that the average cost of nursing home care in Indiana is almost $10,000 per month (as of 2024), planning for the cost of LTC should be part of your overall estate plan. Because most private health insurance plans exclude LTC expenses from coverage, Medicaid may be your only option for help with a long-term care bill for yourself or a spouse. For many seniors, however, the income and asset limits create a barrier to Medicaid eligibility. To ensure that you meet the complex eligibility requirements for Indiana Medicaid, you should talk to your estate planning attorney about incorporating a Medicaid planning component into your estate plan.
Medicaid Eligibility for Seniors in Indiana
To qualify for Medicaid as a senior in Indiana you must have both income and countable resources below the program limits. As of 2024, a single senior applying for Medicaid in Indiana must have a monthly income of no more than $2,829. For married couples, if both spouses apply, the combined income limit is $5,658 per month. If only one spouse applies, only the applying spouse’s income is considered, but the non-applicant spouse may be entitled to a “spousal allowance” from the applicant’s income. A single applicant can have up to $2,000 in countable assets, while a married couple with both spouses applying can have up to $3,000. Certain assets are exempt when calculating the value of your countable resources, such as your primary residence up to an equity limit of $713,000 (as of 2024). To ensure that you will qualify for Medicaid if you need it without putting your retirement nest egg at risk, talk to your estate planning attorney about Medicaid planning.
Do You Have Additional Questions about Indiana Medicaid?
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about legal issues seniors face, contact the experienced Indianapolis elder law attorneys at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.
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