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By John M. Bigler Many seniors are confused when it comes to medical insurance and deciding on the best plan to serve their particular needs.
If that's the case, then Medicare will pay the first 20 days of the nursing home in full and the next 80 days with a co-insurance payment, which for 2002 is $101.50. A good medical insurance policy will cover the co-insurance. After 100 days, both Medicare coverage and the medical insurance will stop.
The reason for the confusion very often is that most plans will cover a hospital stay for up to 365 days after Medicare ends. However, even the best plan won't cover after 100 days in a nursing home. For that, long-term care needs to be considered.
Another misconception that many seniors have is the concern that should they become eligible for Medicaid they'll lose both their Medicare benefits and coverage they would have under medical policies. That's not the case. Medicaid is the payor of last resort when there are other benefits available. For example, in the hospital setting, Medicare would pay most of the initial cost with a one-time deductible that typically would be paid by insurance. Only when Medicare and private insurance benefits end would Medicaid step in and make payment for a Medicaid recipient.
Many people who become eligible for Medicaid are incorrectly advised to drop their medical insurance. That's a mistake. Local social services departments encourage people to keep their medical coverage, recognizing that, especially in a hospital scenario, the insurance won't only benefit the individual, but will save social services the cost of the care.
From the recipient's point of view, retaining the coverage allows him or her to continue to get medical treatment from sources that would not normally accept Medicaid. Statistically, only one in seven doctors in New York accepts Medicaid coverage and so if someone eliminates medical insurance, that will usually mean that the visits to the family practitioner will no longer be covered.
Perhaps the biggest benefit to a Medicaid recipient in keeping their medical insurance is that the coverage will typically not cost the recipient anything. A community recipient of Medicaid is allowed to keep a certain amount of income each month, and the rest of the income must be spent on medical expenses before the local DSS will pay the balance of medical bills in any given month.
For the year 2002 the monthly allowance is $654. That means that an individual with income exceeding that amount must pay the excess income toward medical expenses. For example, a Medicaid recipient receiving a Social Security retirement check of $954 would have to spend $300 on their medical expenses before Medicaid would pay the balance of their medical costs each month. Normally, because all medical expenses are covered, the $300 might be a payment to the home health agency providing aides in the home.
However, that money can also be used to pay the premium on a medical insurance policy. The same holds true for a Medicaid recipient in a nursing home who's allowed to keep only $50 a month of income. When advising individuals and their families, I tell them to purchase the best medical insurance that they can get so that if and when they need medical treatment they aren't limited to only those medical sources covered by Medicaid.
In New York, an individual who wishes to purchase a policy must be allowed to purchase a policy regardless of medical condition. There's a six-month preexisting clause, but the policy must be sold.
Purchasing or upgrading medical insurance is a perfect way to spend down monthly excess income. Next month in this article I'll analyze the various types of medical insurance policies that are available.
Reprinted with permission of the Suffolk Times © 2002
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For one thing, there's a common misconception that medical insurance will cover nursing home care. The standard medical policy will cover at most the co-insurance payments during the first 100 days. Medicare will cover the first 100 days in a nursing home, assuming an individual comes from at least a three-day hospital stay and requires and receives skilled care on a daily basis.