Medicare Versus Medi-Cal by Kevin Staker

Medicare

Medicare

Medicare is the federal medical insurance program.  Its funds come primarily for payroll deductions out of the paychecks of American workers.  All individuals 65 or older who have contributed to Social Security receive its benefits.  Also, individuals under age 65 who have been eligible for Social Security disability benefits for at least two years, or persons of any age with end-stage kidney disease are eligible.

Medicare has two parts.  Hospital Insurance is Part A, and Medical Insurance is Part B. Those persons eligible for Social Security or Railroad Retirement benefits as workers, dependents or survivors, All individuals are eligible for Part A when they turn 65. If an individual has failed to work enough calendar quarters to qualify for benefits, he or she may pay a monthly premium and qualify. If an individual purchases Part A, Medicare Hospital Insurance, he or she must also enroll in Part B, Medical Insurance.  Participants in the Medicare are liable for co-payments and deductibles along with monthly payments for Part B coverage. Medicare is not based on financial need. Any individual is eligible who meets the age, disability or coverage requirements of Medicare.

Medicare does not cover all medical expenses.  It must be supplemented with private insurance, also called "medigap" insurance, such as Anthem, or consumers can enroll in an HMO plan that contracts with Medicare, such as Kaiser Permanente. After three days in the hospital, Medicare will pay up to 100 percent for the first 20 days of skilled nursing care. For days 21 through 100 days, the individual pays a typically large co-payment. The premiums and copayments increase every year. After day 100,  Medicare coverage for nursing home care ends.

Please note that Medicare only pays for “skilled nursing care.”  It does not pay for “custodial care”, such as in a board and care home.  The average stay in a nursing home under Medicare is usually less than 24 days; people simply do not want to pay the large co-payment. Thus, Medicare fails to cover long term care in a nursing home.

Medi-Cal

Medi-Cal is a California State program largely paid for with federal tax dollars.  It pays for medical care for individuals with low income. Some Medi-Cal recipients may receive Medicare, but the two programs are separate. Medi-Cal is a needs based. In California it is now called "Covered California".  It is part of the Affordable Care Act - Obamacare. 

Kevin Staker has stated the following:

You cannot rely on Medicare to pay for long term care.  Long term care insurance is very expensive.  Older folks must consider what must be done if they need to qualify.  In a future blog post, I will talk about the keys: a good financial power of attorney that allows gifts, including to the agent, and a living trust if you own a home.

By Kevin Staker