Many folks continue to be confused about the differences between Medi-Cal and Medicare.
Both Medicare and Medi-Cal, which is California’s name for the Medi-Cal program, have their originals in federal law. They were originally enacted in 1965 under President Johnson’s Great Society programs. Both programs have evolved over the years. Medicare was focused on providing health care for the elderly while Medi-Cal was focused on providing health care for the poor.
California’s Medi-Cal Program
Today, Medi-Cal is a comprehensive program providing free or low-cost health coverage to California residents through over 20 different managed care plans. The coverage plans that are available may depend on which county in which you live. California’s State-based health insurance marketplace, called “Covered California,” incorporates part of the Medi-Cal program.
How is Medi-Cal different from Medicare?
One of the major differences between Medicare and Medi-Cal is that Medi-Cal is a needs-based or income-based health care assistance program. Federal, state and local tax funds are used to assist eligible individuals with paying their medical expenses. Typically, Medi-Cal recipients are only required to pay a small co-payment for covered medical expenses.
Medi-Cal is run by the state
The Medicare program is run by the federal government. Medi-Cal is run by the state but is administered at the county level. It provides health coverage for eligible adults with children living below a certain income level, pregnant women, seniors and individuals with disabilities.
What is Medicare?
More specifically, Medicare is a federal health insurance program available for individuals who are age 65 and older, disabled, or dialysis patients. Unlike Medi-Cal, eligibility for Medicare is known as an entitlement program, so, is not based on need or income. Medicare recipients are only required to pay a portion of their medical expenses through deductibles. Also, small monthly premiums are necessary for non-hospital coverage.
Basic differences between Medicare and Medi-Cal
Medicare is different from Medi-Cal in that benefits are provided by private companies through contracts with Medicare. Since Medicare is solely run by the federal government, eligibility and benefits are the same all around the country.
Types of Medicare coverage
Medicare is primarily divided into two basic types of coverage – Part A and Part B. Medicare Part A is an insurance plan for care in hospitals, skilled nursing facilities, home health care and hospice care. Medicare Part B, on the other hand, is more like basic medical insurance covering doctor visits, outpatient hospital care, and other medical services. Usually, recipients are not required to pay for Medicare Part A but are required to pay for Part B, which is often taken as a deduction from their Social Security benefits.
There is also a managed care program under Part C of Medicare and a prescription benefit under Part D.
Who is eligible for Medicare?
In order to be eligible for Medicare, you must be age 65 or older, a U.S. citizen or permanent resident, and either you or your spouse must have worked for at least 10 years in a Medicare-covered job. Individuals who are younger than 65, but have a disability or End-Stage Renal disease requiring dialysis or a kidney transplant, may also qualify for Medicare.
Do you have a plan for the future?
It is never too late to start planning for the future need for Medi-Cal benefits. Planning ahead is the best option, especially with Medi-Cal’s look back period (currently 30 months, but expected to increase to 60 months) meant to avoid fraudulent transfers of property. But, even if you find yourself suddenly needing to apply for Medi-Cal benefits there may still be options.
Why is Medi-Cal Planning in California important?
Because Medi-Cal is a need-based assistance program in order to be eligible for Medi-Cal, you cannot have certain financial resources exceeding $2,000 if you are unmarried. Married couples have a higher resource threshold. The purpose of Medi-Cal planning is to prevent the need to exhaust all of your savings in order to qualify.
Be careful making transfers of assets when applying for Medi-Cal benefits
In 2005, a federal law was passed that imposes a period of ineligibility for anyone who transferred their assets within five years before applying for Medi-Cal. As of now, that law has not been applied in California. When it does, the five-year look back period will start when you submit your application. For that reason, the timing of your financial transactions is important and early Medi-Cal planning in California is key.
The penalty period applies only to those needing long-term care
Every applicant for Medi-Cal isn’t required to wait after transferring property before submitting their application. The penalty period is only applicable to those who need long-term care in an institutional setting, such as a nursing home, or who are receiving home health care.
If you need acute care, such as hospital or physician services, you will remain eligible to receive benefits for those services, regardless of recent property transfers.
As with most aspects of government benefit planning, seeking the assistance of qualified and experienced elder law attorneys is a great place to start.