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Understanding Medicare, Medicaid and Medicare Advantage

Medicaid, an insurance program for low-income persons, pays for non-medical home care, home health care, and other in-home supports to help individuals remain living in their homes. However, Medicaid rules are state-specific. Therefore, eligibility and benefits differ in every state. When Medicaid provides care outside of nursing homes, it is referred to as Home and Community Based Services (HCBS). HCBS can be covered under the following:

  • Regular Medicaid, often called State Plan Medicaid
  • Medicaid Waivers, also called 1915(c) Waivers or HCBS Waivers
  • A relatively new state plan program called the Community First Choice Option (CFCO)

Regular / State Plan Medicaid is an entitlement program, as is CFCO. Anyone who meets the eligibility requirements can receive entitlement services. However, waivers are not entitlements. A limited number of slots are available and waiting lists are common for Medicaid Waiver programs. Most states cover home care for the elderly (both non-medical and home health) in both their State Plan and their waivers.

Medicare Benefits do not pay for non-medical, home care aides and only selectively covers home health care.

There are many misconceptions around Medicare’s benefits for home care. Original Medicare, also referred to as traditional Medicare, does not pay for non-medical care, period. Therefore, assistance for non-medical care provided in the home is not covered. Medicare Supplemental Insurances cover Medicare co-payments and deductibles. But they do not add new areas of coverage. So, these policies are of no assistance for non-medical home care.

On the other hand, when home health care is considered medically necessary, it is covered, at least in part, by Medicare and other health insurance programs. However, original Medicare severely restricts coverage to only those individuals who are “homebound”.  This is defined as persons who require assistance (by human or medical equipment, such as wheelchairs to leave their homes. Alternatively, persons whose health may be worsened by leaving their homes are also eligible. During home health care visits, Medicare will not pay for any personal care that is provided during that visit. Visits tend to be brief and procedural in nature.  If a skilled need is required Medicare may pay for short home health Aide visits (2-4 hours)

Medicare Advantage (MA) plans can offer supplemental health care benefits to their participants. CMS does not clearly define “supplemental health care benefits.” But they are interpreted to include benefits that:

  • Offer compensation for a functional need
  • Are used to prevent or care for an injury
  • Lessen the likelihood of requiring emergency or health care

Therefore, several in-home services, such as home health aides, personal care assistance, palliative care, and meal delivery, may be available via one’s Medicare Advantage plan. Other benefits that may be available include adult day care, non-medical and medical transportation, and home modifications to aid aging at home, among others. Beginning in 2020, Medicare Advantage plans will be able to offer even greater flexibility when it comes to supplemental benefits. In fact, Medicare Advantage plans will be able to offer non-health related supplemental benefits for persons with chronic conditions, which includes Alzheimer’s disease and related dementias. This is if it is reasonably expected that the goods and services will improve or maintain one’s functioning or health. In addition, benefits can be customized for the individual in need. As an example, a person with chronic asthma may qualify to have their carpets deep cleaned to help control their asthma.

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