LTC Insurance vs. Medicaid: Which is Better?
It is very important to understand the difference between Medicaid and Long-Term Care insurance (LTCi) if you’re planning for long term care. Otherwise, you may fail to invest in the coverage you really desire or need, so let’s look at some ways in which these health plans differ, and which one is better for you in the long term.
What’s the Difference between Medicaid and Medicare?
The Medicaid health program is jointly sponsored by federal and state governments and aims to help low-income individuals and families pay for medical and LTC costs. Each state has its own Medicaid program, targeted towards specific groups like families, children, elderly and disabled, pregnant women, etc. The program has very strict eligibility criteria and only those who meet the specific requirements may avail the benefits.
Medicare, on the other hand, is a government-sponsored healthcare plan available to all US citizens aged 65 or older, and the coverage extends to people with particular disabilities. Unlike Medicaid, income is not a factor for eligibility under Medicare long term care.
Medicaid LTC: Requirements and Benefits
Generally, Medicaid in every state provides custodial care in nursing homes, for individuals who need assistance with two or more activities of daily living (ADLs), which include bathing, dressing, walking, toileting, feeding, etc. Medicaid is a good option for individuals and/or families with insufficient funds/savings to pay for the care services they need.
Comparing Medicaid and Insurance
Overall, long term care insurance is more flexible than Medicaid in its eligibility, coverage and options. Conversely, Medicaid has certain benefits that LTCi fails to provide. The table below summarizes the main differences between these two coverage plans:
| Coverage/Benefit | LTC Insurance | Medicaid |
|---|---|---|
| Stays in Nursing Homes | Generally | Generally |
| Nursing Home Coverage (Right from the first day) | Seldom: Very costly and not tax-qualified. | Generally |
| Nursing Home Coverage (for as long as needed) | Seldom: Very costly | Generally |
| Nursing Home Coverage (for stays in any nursing home) | Generally | Seldom (Medicaid is not accepted at many places) |
| Home Care Coverage | Optional | Only in a few states |
| Adult Day Care Coverage | Optional | Seldom |
| Assisted-Living Coverage | Optional | Only in a few states |
| Respite Care Coverage | Optional | Rarely |
| Access to Full Range of Nursing Home Services | Generally (available private or spousal rooms, shopping trips, personal care items and other services covered by the policy) | Seldom (family needs to pay for available private or spousal rooms, shopping trips and personal care items) |
| Ability to stay in one place | Yes, while the facility remains open (you can change to a different one when you choose) | Not guaranteed: Nursing homes may move you if they are too full or decide to stop accepting Medicaid patients |
Home-Based Care
LTC insurance offers more flexible options. In addition to nursing-home care, patients can avail in-home care as well. For many people, this option is preferable to an assisted-living facility. If you want to continue living in your home for as long as possible, your best option would be to choose LTC coverage as it entails the option of home care.
Assisted Living Facilities
An assisted living facility is designed to care for seniors who can no longer live independently but do not require the 24-hour care provided at a nursing home. They can receive assistance with tasks like meal preparation, housekeeping, medication, etc.
If the option of long term care facilities is appealing to you, then an LTC insurance package is the right choice for you.
Adult Day Care Centers
Adult day care is a senior care service designed to help caregivers look after their elderly charges in the comfort of their own home (instead of sending seniors to nursing homes). With these facilities, adult care providers look after seniors during the day, allowing primary caregivers some reprieve from round-the-clock responsibility as well as time to fulfill work obligations.
Again, LTC insurance offers the option of adult day care, while Medicaid users cannot avail this option in many states.
Deciding whether to avail Medicaid or LTC insurance can be quite confusing, since both healthcare plans have their own benefits and drawbacks. LifeCentra can help you select a coverage plan that is compatible with your healthcare and financial situation, so get in touch with us for a free review of your coverage today!