Medicare vs. Medicaid

Medicaid and Medicare are two very different programs and it is important to understand the differences between them. (See Medicare-Medicaid Comparison Chart, attached as Appendix I). Medicare is a federal medical insurance program primarily for persons over 65. Medicaid is a federal-state medical assistance program for low-income recipients of public benefit programs. Medicare provides only partial coverage, and requires beneficiaries to pay premiums, deductibles, and co-payments. Medicaid provides more complete coverage, without significant payments from the beneficiaries. All persons over 65 (as well as younger individuals disabled for at least two years) who paid into Social Security are eligible for Medicare, but only low-income persons who are elderly, blind, disabled or are low-income families can receive Medicaid.

Who Receives Medicaid?

Medicaid was created as an add-on health benefit to two welfare programs, Supplemental Security Income (SSI) and Aid for Dependant Children (AFDC). AFDC was replaced by the Temporary Assistance to Needy Families (TANF) program. Recipients of either SSI or TANF, or those who would qualify for AFDC if it still existed, are eligible for Medicaid, as are Old Age Pension (OAP) recipients who are disabled or over 64 years of age. People who would continue to receive those benefits except for earned income or cost of living increases often continue to receive Medicaid. Women with breast or cervical cancer may also qualify if they lack health insurance.

The eligibility rules for elderly or disabled persons generally use the SSI income and resource rules. Thus, except for excluded earned income, income must be below $584 for one person, or $609 for those 60 or older. Total resources (bank accounts, property, etc.) may not exceed $2,000 for an individual, or $3,000 for a married couple. Some property does not count as a resource, like your residence, your car, some funeral items or plans, wedding jewelry, and life insurance with cash value of $1,500 or less. For long-term care (see section below) the income cap is three times the SSI payment standard for one, or $1,737 per month for 2005. For additional income and resource rules for couples see the “Spousal Protection” section below.

There are many additional eligibility rules, including citizenship requirements, special requirements for long-term care and severe transfer restrictions (see Estate Planning section below).

What Services Are Covered?

In Colorado, Medicaid covers most necessary services, including hospital, nursing home, physician, prescriptions, medical supplies and equipment, skilled (nurse or Certified Nursing Assistant required) home care and assistance with transportation. In addition, non-skilled or personal in-home services are provided by Home and Community Based Services (HCBS) programs for specific groups such as the elderly, and people with developmental disabilities, mental illnesses, AIDS, or other chronic disabilities.

While there is a co-payment for some services ($ .50 to $10 or more in Colorado), Medicaid generally pays the entire charge approved by the Medicaid program. Additionally, most nursing home recipients must pay all but $50 per month of their income toward their care. Medicaid is the payor of last resort, so other insurance, including Medicare, must pay first.

How to Apply for Medicaid

Apply for Medicaid at your County Department of Social or Human Services.  See Resources, Chapter One for a list of addresses.  If you are receiving SSI, bring your SSI award letter.  If you are eligible for SSI, but not receiving it, first go to your local Social Security office to apply for SSI.  You can apply for OAP and Medicaid at the County Department of Social Services at the same time.  Nursing home residents apply in the county in which the nursing home is located. 

You will need to be able to verify income, resources, age and disability, if any.  You should bring the following documents with you:

• Proof of all income, including investment income, if any

• Bank statements for all accounts

• Copies of title or other proof of ownership of any real estate or other

assets

• Copies of life and health insurance policies

• Proof of age, such as a birth certificate

• Medicare and Social Security cards.

While you may be asked to come back for another appointment with any documentation that is lacking, you have a right to sign the first page of the application when you first come in. This serves as your application date. If you cannot travel to the office, a responsible person can apply on your behalf.

Nursing-home residents should tell the nursing-home staff that they are applying for Medicaid. The law prohibits a nursing facility from requiring a third-party guarantee of payment.