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Friday, November 14, 2014

Medicaid, Medicare, and Aid and Attendance - What's the Difference?

Medicaid, Medicare, and Aid and Attendance - What's the Difference?


One of the issues that I come across in my practice is that there is great confusion as to the difference between Medicare, Medicaid and Aid and Attendance when it comes to elder care planning. Although each of them are government programs that assist covering the cost of long-term care, each of them have a very different set of requirements and provide very different amounts of coverage.

Medicare: I am not going to go into a list of all of the services that this provides because most the services are outside the scope of the long term care, but Medicare is a federally-sponsored program that focuses on acute care (care for where the focus is on recovery) for eligible people aged 65 or over or who would otherwise qualify (they are on SSDI, for example). Thus, most of the expenses that Medicare would cover would include doctor's visits, prescriptions and hospital stays. Medicare does however, provide a long term care benefit for the first 100 days of a person's stay in a long term care facility that accepts Medicare. Provided other requirements are met (you had a recent hospital stay of three days,  your are in a Medicare-complaint facility, and you require skilled care), Medicare will pay for 100 percent of the cost of long term care for the first 20 days and then will pay the balance over $140.00 from days 21-100. On day 101, however, Medicare ceases provide any long term care assistance. Since the typical elderly person requires long-term care for at least six months, it is not a complete solution.

Medicaid: Unlike Medicare, Medicaid is a government program that is provides for long term custodial care, both in nursing homes and assisted living facilities, but also for home health care. Medicaid is funded jointly between the federal and individual state governments and is administered at the state level. While each state may have its own set of regulations regarding qualifying for Medicaid, they cannot run counter to the federal regulations that govern the program. As written on this blog previously, because Medicaid is designed for people with limited income and resources, the requirements are strict, and the penalty for transferring money for the purposes of becoming eligible for Medicaid are even stricter.

American flag on handsVA Aid and Attendance: The Department of Veterans Affairs provides an improved pension to veterans who qualify for the basic VA pension and require long term care assistance. A veteran would qualify for an increase in his or her pension to cover the cost of long term care if the veteran would already qualify for a basic pension and

(1) he or she requires the aid of another person in order to perform personal functions required in everyday living, such as bathing, feeding, dressing, attending to the wants of nature, adjusting prosthetic devices, or protection from the hazards of the daily environment;

(2) he or she is bedridden, in that the disability or disabilities requires that the veteran remain in bed apart from any prescribed course of convalescence or treatment;

(3) he or she is a patient in a nursing home due to mental or physical incapacity; or

(4) his or her eyesight is limited to a corrected 5/200 visual acuity or less in both eyes; or concentric contraction of the visual field to 5 degrees or less.

Source: http://www.benefits.va.gov/pension/aid_attendance_housebound.asp

A veteran can receive up to $20,795 per month tax free, if he or she qualifies. If his or her spouse requires benefits, then the maximum is greater. Unlike Medicaid and Medicare, the benefit paid can be used in any manner possible, so there is no requirement that someone has to stay in a Medicare or Medicaid compliant facility. Furthermore, unlike Medicaid, you can keep up to more than $50,000 of countable assets and still qualify. Finally, with the VA Aid and Attendance pension, as of today, there is no transfer penalty, so a veteran with $400,000 in countable assets could transfer property outright or via an irrevocable trust and still qualify. If someone chooses to do that, it is highly recommended that they contact an Elder Law attorney for assistance, because if the transfer is not made properly, it could jeopardize future Medicaid eligibility.