Confused About MediCare and MediCal?

Because many people do not have a need for the benefits offered by Medicare and/or Medi-Cal until they reach retirement age, there is a good deal of confusion about the two programs. In fact, Medicare and Medi-Cal are often used interchangeably when discussing the programs despite the fact that they are completely different programs with very different eligibility guidelines. To make sure you understand the difference between the programs, we will explore some of their similarities and differences. Medicare Overview Medicare is both funded and administered by the United States federal government, which, in turn, imposes a Medicare tax on both workers and employers. If you look at your paycheck stub each week you will likely see where you are paying into the Medicare system. You are paying into the system under the assumption that you will benefit from the program during your retirement years. To qualify for Medicare, you must fall into one of the following categories:

• 65 or older
• Under 65 with certain disabilities
• Of any age and have End Stage Renal Disease (ESRD) or ALS

In general, if you are 65 or older, and you, or a spouse, worked for the required amount of time (about 10 years) and paid into the system, you are entitled to Medicare benefits when you reach retirement age. There are no additional eligibility guidelines. Typically, retirees are enrolled in Parts A and B automatically when they turn 65 years old. Medicare actually comes in four parts. If you wish to enroll in Parts C and/or D you will probably need to stop by your local Social Security office to enroll. The four parts to Medicare include:

• Part A: Hospitalization coverage
• Part B: Medical insurance
• Part C: Privately purchased supplemental insurance that provides additional services and through which all Medicare services offered by Part A and Part B, and sometimes Part D, can be accessed
• Part D: Prescription drug coverage

Contrary to what many people believe, Medicare is not free, despite the fact that you paid into the program during your working years. Premiums, which vary depending on which parts you elect, are typically deducted from your Social Security benefits each month. You may also have to copays. Medi-Cal (Medicaid) Overview Medi-Cal, California’s name for Medicaid, is a healthcare program that is primarily funded by the United States government, although each state has the option to supplement funding as well. Although Medi-Cal is a federal program, it is administered by California. Because it is administered by the states, you will find some variation among the states with regard to eligibility guidelines and benefits offered to participants. Medi-Cal is, however, what is referred to as a “needs based” program, meaning that an applicant must demonstrate a need for benefits. Because Medi-Cal is intended to provide health care benefits to low income individuals and families, eligibility for Medi-Cal is determined, in part, by an applicant’s income and “countable resources.” Income limits are established on a yearly basis and are based on household size and the Federal Poverty Level (FPL) for the geographic area where the applicant lives. “Countable resources” refers to the value of an applicant’s non-exempt assets. Some assets are exempt from consideration when determining an applicant’s countable resources. Although it varies by state, most states exempt a primary residence, vehicle, and household furnishings from an applicant’s “countable resources.” The countable resources limit is typically very low — $2,000 for an individual. If you are eligible to participate in the Medi-Cal program, you will find that Medi-Cal covers most basic health care expenses, such as:

• Certain inpatient and outpatient hospital services
• Early and Periodic Screening, and Diagnostic, and Treatment (EPSDT) services for children
• Nursing facility services
• Home health services
• Doctor’s services
• Rural health clinic services
• X-ray and laboratory services
• Family planning services
• Midwife services
• Freestanding Birth Center services
• Certified pediatric and family nurse practitioner services
• Tobacco cessation counseling for expectant mothers

Long-Term Care and Medicare vs. Medi-Cal One of the most important differences between Medicare and Medi-Cal is that Medicare will not pay for custodial long-term care while Medi-Cal will cover LTC expenses. It is for this reason that many seniors need to qualify for Medi-Cal. To ensure that you will qualify for Medi-Cal if you need it, be sure to include Medi-Cal planning in your overall estate plan. There is a limited long term care benefit under Medicare which is that it will sometimes pay for a stay in a long term care facility if the purposes of the stay is rehabilitation from an illness or injury and not custodial or convalescent care.  The maximum daily limit per “spell” is 100 days. If you have additional questions or concerns about Medicare and/or Medi-Cal, call us at (916) 437-3500 to schedule an appointment.