Chapter 5 Government Benefits

LibraryAlzheimer's and the Practice of Law: Counseling Clients with Dementia and Their Families (ABA) (2013 Ed.)

CHAPTER 5 GOVERNMENT BENEFITS

Winning the Diagnosis Lottery

When it comes down to it, the health-care system isn't a whole lot different from a lottery system. If someone gets a diagnosis that there is a Medicare reimbursement code for, then Medicare cares about that person's care and will cover it. If someone gets a diagnosis that's not covered by Medicare, Medicare does not care about that person's care and that person will have to spend down until that person qualifies for Medicaid.

There's a story of two sisters of the same relative age, sharing the same genes and even living on the same street. One sister had heart issues and was able to rely on Medicare. The other sister was not so "lucky" and had Alzheimer's disease and was unable to use Medicare. In essence, the first sister won the diagnosis lottery.

Medicare cares about helping seniors to not die of heart attacks or strokes. For the sister that had a heart problem, there was a Medicare reimbursement code to take care of almost everything that she needed: medication, health services, rehab services, hospital services, doctor services. She was provided an enormous amount of care—probably half a million dollars or more because there was a Medicare reimbursement code for the diagnosis that she had.

Medicare didn't completely abandon the sister with Alzheimer's. When she got a urinary tract infection and had to go to a hospital as an inpatient, Medicare paid for her acute care. Part B paid for doctor services. Part D helped pay for medications, such as Aricept and Risperdal.

But look at what's not covered. Someone who has memory issues and starts to need assistance will not be able to access Medicare benefits for care. As the sister with Alzheimer's started to have memory issues, she was living at home. One day she decided to turn on the water in the bathtub upstairs and she didn't turn it off. She didn't turn it off for a couple of days. At this point it became obvious that the sister was no longer safe in a normal environment and somebody needed to be overseeing her activities of daily living. She needed in-home care.

Medicare does not care about in-home care, assisted-living care, or nursing home care. There are no Medicare reimbursement codes for that kind of care. So the sister diagnosed with Alzheimer's starts to have memory issues that cause her to be unsafe in her own environment and she even needs to have someone coming in to be with he or she needs to go somewhere where she is supervised and the environment is controlled, but Medicare does not care about providing that kind of care.

That means the sister with Alzheimer's will have to pay for her care out of her pocket, out of her savings account. If she had a long-term-care policy—she didn't, and most people don't—it may have helped pay for care. With a long-term care policy, Medicare continues to pay for all the things that it paid for before: acute care.

So, the sister with Alzheimer's has had to pay for care at home. When she finally gets down to $2,000 or less of assets (because she's a single individual), she can qualify for Medicaid nursing home benefits and she can move to a nursing home.

Up the street, the other sister has had over $500,000 of health care provided by Medicare and hasn't had to spend down all of her assets.

Today, it's common that people don't like the fact that someone is helping people to get qualified for Medicaid, because Medicaid is taking money from the government. However, think of it this way: The first sister didn't do anything wrong and she got a heart attack and the government happily paid for her benefits. But the second sister worked all of her life, saved her money, and also did everything right. Why should she be denied care?

In 1965, a political decision was made that Medicare would cover acute care because the "Big Killers" of the time were all acute problems such as stroke, heart attack, and cancer. Now a couple of generations have passed, and the problems of the elderly are no longer just acute-care issues. Today's big aging issues are long-term illnesses: Alzheimer's disease, other dementia, and Parkinson's disease.

Many seniors believe that Medicare will pay for their nursing home costs. After all, the language states that Medicare will pay for "skilled care," and we refer to facilities as independent, assisted, and skilled. Many clients are shocked to discover that the benefits they paid into will not pay for their "skilled care" in the nursing home.

Both sisters paid into the Medicare system through contributions from employment income. However, the hard truth is that one will be able to access those benefits and one will not.

Medicare Versus Medicaid

Medicare is the federal medical insurance plan for senior citizens and individuals with disabilities, but the program does not cover the kind of long-term care that those inflicted with Alzheimer's disease require.

Medicare provides care for individuals who are blind, have disabilities, or are over the age of 65 and need acute medical care. "Acute medical care" means an individual has been diagnosed with an illness or other medical issue where there is a high probability that the individual can recover and return to a normal life.1

When Medicare was born in 1965, the average male died before ever reaching 65 years of age and the average female lived to be about 70. So when Medicare was first designed, it was created in a society where most people would never qualify for it or, if they did qualify, they would qualify for a relatively short amount of time.

Looking to the other side of the equation, many people believe that Medicaid is just about paying for care for poor people. Medicaid was designed to be the part of the social safety net that provided health care for people who were too poor to be able to have their own health care. It was limited in what it was going to do because it was means tested, meaning that it was only available if someone qualified for certain poverty limitations.

Practice Pointer: Medicare Versus Medicaid

Lawyers will need to be familiar with the differences between Medicare and Medicaid and what type of coverage they provide. Lawyers may have to give clients the bad news that what they think about Medicare coverage is incorrect.

In 1965, there was no such thing as assisted-living facilities. Assisted living is for a person who has gotten to the point in life to have chronic-care conditions—chronic meaning the person is never going to get well. That is an important difference between Medicare and Medicaid.

Medicare does not cover chronic medical care services for most individuals who are suffering from a long-term illness or medical problem where there is a high probability that they will not recover and will not return to a normal life.2

Many people believe that Medicare will provide them with long-term-care benefits if they need to be in an assisted-living facility or a nursing home, but they are mistaken.

Medicare

Medicare is primarily designed to provide care for people over the age of 65 who can get well. Medicare is supposed to pay for acute care assuming the person needing the care is placed as an inpatient.

"Inpatient" is a key term and has become a controversial issue. Hospitals are starting to have people who are there to undergo tests, but these people are determined to be "under observation," which means they are on their own when it comes to paying their medical bills. Medicare helps pay for inpatient care in the hospital or skilled nursing facilities following a hospital stay. And it's not just any hospital stay; basically, a person has to have three midnights in the hospital before qualifying for skilled nursing care in a rehab center or home health care. A person could actually be in the hospital multiple days, having multiple tests, and seeing multiple doctors, and if that person has not been "admitted" but is merely "under observation," they need to be prepared to pay multiple bills.

Medicare is concerned about care only as long as a person can get well. There are a few exceptions to that, due to political lobbies that were strong enough to make changes. For instance, Medicare cares for people who have amyotrophic lateral sclerosis, or Lou Gehrig's disease, and about people with chronic renal failure. Why? Because these diseases or conditions had a big enough lobby to get the Medicare law changed. Medicare does not care about Alzheimer's disease and was never designed for long-term care.

Although Medicare can sometimes cover up to 100 days in a skilled-nursing facility, it is intended for patients who need recovery or rehabilitation from surgery or illness. For Medicare to pay for a stay in a nursing home, patients must continue to recover during their stay.

Individuals in the middle to late stages of Alzheimer's require custodial care instead of rehabilitative care.3 "Custodial care" means assistance with preparing meals, bathing, grooming, toileting, and other activities of normal daily life. It may appear that this is skilled care, and even involves measures to keep individuals from harming themselves or others, but Medicare is not going to pay for this custodial care.

There are four parts of Medicare coverage: hospital insurance, medical insurance, Medicare advantage plans, and Medicare prescription drug plans, all with their own eligibility requirements.

Hospital Insurance (Part A)

Most people age 65 or older who are citizens or permanent residents of the United States are eligible for free Medicare hospital insurance (Part A). You are eligible at age 65 if:
• You receive or are eligible to receive Social Security benefits; or
• You receive or are eligible to receive railroad retirement benefits; or
• Your have a spouse who is eligible; or
• You or your spouse (living or deceased, including divorced spouses) worked long enough in a government job where Medicare taxes were paid; or
• You are the dependent parent of a fully insured deceased child.4

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