Caught in the Medicare and Medicaid Crunch

Today, seniors are the fastest growing segment of the U.S. population. While many baby boomers have outgrown childcare issues, many may already be (or will shortly be) facing the issues of long-term care for their parents. While the options for care have expanded beyond nursing homes to include home health care and assisted living/residential care facilities, the public funding available for financial assistance remains very limited.

It’s common to be confused about the coverage provided by Medicare and Medicaid; however, there are important differences you must understand to be financially prepared. Medicare is the national health insurance program for people with qualifying disabilities and for seniors who are age 65 and older. Medicaid, which is jointly funded by states and the federal government, provides health care for qualified low-income individuals and is currently the only public program that will cover long-term care. For seniors, Medicare covers a portion of acute and rehabilitative care, while Medicaid primarily addresses issues related to chronic and long-term illnesses (only for those who qualify).

Since long-term care costs can be expensive and Medicaid requires individuals to be at poverty levels in order to qualify for assistance, many families are financially concerned about the prospect of long-term care for loved ones. One strategy that can help families minimize the financial risks of future health care expenses is long-term care insurance. The financial assistance coverage offers can help families with asset preservation and estate conservation, as well as fund a variety of care options.

Planning now can help you be prepared later. With the proper insurance coverage in place, you may be better positioned to avoid being “squeezed” between your limited Medicare and Medicaid options.