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What are the Differences Between Medicare and Medicaid

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					    WHAT ARE THE
DIFFERENCES BETWEEN
    MEDICARE AND
     MEDICAID?
What Are the Differences Between Medicare and Medicaid?




    A Look at the Differences Between the
Two Government Programs Relevant to Seniors –
           Medicare and Medicaid




                              By Larry Parman
                 OKLAHOMA ESTATE PLANNING ATTORNEY
        When you are planning ahead for
        retirement      you    need     to   gain    an
        understanding of government programs
        that are relevant to senior citizens.
        Medicare is certainly one of these
        programs.

        However, Medicaid is also something that you should understand if you are
        looking ahead toward your golden years and the twilight years that will follow.

        In this report we would like to explain the differences between these two
        programs.

        THE MEDICARE PROGRAM

        Medicare is the government health insurance program that you are paying into
        as you pay taxes on your income. If you have paid into the program sufficiently
                                                          throughout     your      working
                                                          career, you will be eligible for
                                                          Medicare coverage when you
                                                          reach the age of 65 under
                                                          currently existing laws.

                                                          There is a formula that is
                                                          utilized to determine your
                                                          eligibility for Medicare. You
                                                          accumulate credits as you are
                                                          working and paying taxes. If
        you earn $1,160 in 2013 you are awarded one Medicare credit.




What Are the Differences Between Medicare and Medicaid?        www.ParmanLaw.com
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        You get one credit for each $1,160 you earn. However, you can only earn four
        credits in a year.

        Over the course of your lifetime you must earn at least 40 credits to qualify for
        Medicare. As long as you qualify, you get the same level of coverage as the next
        person regardless of your contributions into the program.

        There out-of-pocket expenses that you must account for if you are budgeting for
        the future. Medicare Part A pays for inpatient hospital stays. There is a
        deductible for each benefit period, and co-payments may be necessary
        depending on the length of stay.

        Medicare Part B covers outpatient care and visits to doctors. There is a relatively
        modest deductible of $147 per year, but there is also a monthly premium that
        must be paid. Most people are paying just under $105 per month in 2013, and it
        is generally deducted from your Social Security direct deposit.

        If you need to reside in a nursing home or assisted living community later in
        your life, Medicare will not assist with these expenses.

        MEDICAID ASSISTANCE

                                                             Now       let's     get    into   the
                                                             differences                 between
                                                             Medicaid and Medicare.

                                                             Unlike Medicare, Medicaid is
                                                             a need-based program. If you
                                                             paid     into       the    Medicare
                                                             program           sufficiently,   you
                                                             could be a billionaire and




What Are the Differences Between Medicare and Medicaid?            www.ParmanLaw.com
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        still qualify for coverage.

        To qualify for Medicaid your countable assets cannot exceed $2,000.

        People pay into the Medicare program throughout their lives while they are
        working. On the other hand, Medicaid has no requirements with regard to
        accumulating credits while you are working. You can qualify for Medicaid even if
        you did not earn enough credits to qualify for Medicare.

        In addition, Medicare is a program that is available to people who have reached
        the age of 65 as we have stated previously. Medicaid is available to people of all
        ages, even children.

        Another difference is the fact that Medicaid will pay for long-term care if you
        become eligible for the program

        MEDICAID PLANNING

        Long-term care is very expensive, with the average nursing home stay of just
        over two years coming with a price tag that is in the vicinity of $200,000 using
                                                          current costs. This is more than
                                                          many Americans have saved for
                                                          retirement.

                                                          Since Medicare will not pay for
                                                          long-term care, Medicaid winds
                                                          up filling this void in many cases.

                                                          If you don't plan ahead, you
                                                          could potentially spend all of
        your resources paying for long-term care. Once you have exhausted your
        savings, you could then qualify for Medicaid to pay for the long-term care that



What Are the Differences Between Medicare and Medicaid?          www.ParmanLaw.com
                                                                                                4
        you are receiving.

        It is possible to take steps in advance of applying for Medicaid to keep a
        maximum store of resources in the family.

        You can divest yourself of assets, giving them to people who would otherwise be
        inheriting them. However, you have to be cognizant of the 60 month look back
        period.

        If you give away assets within five years of            It is possible to take
        applying for Medicaid coverage your eligibility          steps in advance of
        will be delayed. The duration of the period of         applying for Medicaid
        ineligibility would be determined based on the          to keep a maximum
        amount of your divestitures as compared to the          store of resources in
        cost of long-term care in the state of your                   the family.
        residence.

        The Medicaid evaluators don't count the value of your home up to $536,000 of
        equity in 2013, but it is possible for Medicaid to seek to attach the value of the
        house after you pass away.

        With the correct type of planning you can take steps to prevent future Medicaid
        recovery.

        CONCLUSION

        Medicare will not pay for long-term care. Medicaid will pay for living assistance,
        but there are very low upper asset limits.

        It is possible to qualify for Medicaid without losing everything if you plan ahead
        effectively. To get good information about Medicaid planning, discuss the details
        with a licensed elder law attorney.



What Are the Differences Between Medicare and Medicaid?         www.ParmanLaw.com
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        REFERENCES

        Social Security Administration
        http://www.ssa.gov/retire2/credits1.htm

        Medicaid
        http://www.medicaid.gov/




What Are the Differences Between Medicare and Medicaid?   www.ParmanLaw.com
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        About the Author
        Larry Parman

                                    After helping his own family deal with a lengthy probate and a battle with
                                    the IRS following his father’s death in a farm accident, Larry made a
                                    decision to help families create effective estate plans designed to reduce
                                    taxes, and minimize legal interference with the transfer of assets to one’s
                                    heirs, and protect his clients’ assets from predators and creditors.
                                    Following a dozen years in the investment banking and financial services
                                    business, in the mid-1980s Mr. Parman formed a law firm that gives
                                    families the peace of mind that comes from having created a premier
                                    estate and financial plan.

                                      After forming his law firm in 1984, he offered a series of public and
                                      private seminars to inform the public about using a Living Trust as the
        foundation of a family’s estate plan. Today, Parman & Easterday is one of the leading business and
        estate planning law firms in the Midwest. The firm’s primary focus is on business and estate planning,
        elder law, asset protection, and providing effective estate planning solutions for clients. Today, the
        firm’s premier estate plan design is referred to as a Legacy Wealth Plan.

        Mr. Parman is a frequent guest on the radio and can be seen on television talk shows explaining the
        importance of proper estate planning. Prosperity Productions selected Mr. Parman as a featured
        speaker in a nationally-recognized educational video on Living Trusts. He is the author of numerous
        published articles on financial and estate planning matters and the co-author of two books, Estate
        Planning Basics: A Crash Course in Safeguarding Your Legacy and Guiding Those Left Behind in
        Oklahoma: Settling the Affairs of Your Loved Ones.

        Mr. Parman is a member and Fellow of the American Academy of Estate Planning Attorneys. He is also
        a member of the Oklahoma and Missouri Bar Associations, the American Bar Association, and the
        Oklahoma City Estate Planning Council.




                                         www.ParmanLaw.com
             OVERLAND PARK, KS                                  OKLAHOMA CITY, OK
             10740 Nall Avenue, Suite 160                       13913-B Quail Pointe Drive
             Overland Park, KS 66211                            Oklahoma City, OK 73134
             Phone: (913) 385-9400                              Phone: (405) 843-6100
             Fax: (913) 385-9422                                Fax: (405) 917-7018

What Are the Differences Between Medicare and Medicaid?                     www.ParmanLaw.com
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Description: A look at the differences between the two government programs relevant to seniors - medicare and medicaid.