Understanding Medicare & Medicaid: A Guide for Assisted Living
Nov 07, 2024
This blog will cover an important topic for anyone considering investing in assisted living: understanding Medicaid and Medicare. These programs are frequently mixed up, but understanding the distinctions and how they work can greatly impact your ability to run your business. Whether you're just getting started or want to improve your knowledge, understanding the principles of these government programs can provide you with the information you need to make informed decisions and optimize your investing strategy.
Medicaid and Medicare serve different purposes and demographics, yet both play important roles in the assisted living environment. Medicaid is a state-administered and federally-funded program that offers health coverage to low-income individuals, including many seniors who require long-term care. On the other hand, Medicare is a federal program that provides certain medical services, generally to individuals over 65. As an investor, understanding these programs' eligibility requirements, coverage alternatives, and financial ramifications can help you better serve your residents and increase the profitability of your assisted living facility. Let's get started.
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What is Medicaid?
Medicaid is a federally funded program administered at the state level and intended to assist low-income individuals and families. States have some leeway in administering the program as long as it falls within federal limitations. Eligibility is determined mostly by income level or special medical needs. Here is a closer look at who qualifies.
Low-income families who meet certain economic criteria are eligible for Medicaid. Each state determines its requirements, and programs such as the Children's Health Insurance Program (CHIP) offer supplemental coverage to children.
Individuals with impairments, such as children with autism or cerebral palsy and adults with mental problems, are eligible for Medicaid assistance.
Elderly persons, particularly those who qualify for Medicare, can obtain Medicaid assistance if they can show a lack of funds and assets. This category includes many inhabitants of assisted living facilities.
What is Medicare?
Medicare is a federal program typically serving individuals aged 65 and up, regardless of income. The Centers for Medicare and Medicaid Services (CMS) oversee Medicare. Medicare is divided into three parts: Part A covers inpatient treatment, Part B covers outpatient services like clinic visits and specialist consultations, and Part D covers prescription drugs. While Medicare provides extensive medical coverage, it does not cover long-term care, which is why Medicare does not cover services in assisted living facilities.
Key Differences Between Medicaid and Medicare
Knowing the important differences between Medicaid and Medicare is essential for assisted living investors:
- Medicaid is state-administered under federal rules, whereas Medicare is federal.
- Medicaid eligibility is based on income and can cover people of all ages with specific requirements, whereas Medicare is typically based on age (65 and up) or disability.
- Medicaid can cover long-term care expenditures, making it available to assisted living facilities. Medicare does not cover long-term care but provides medical coverage that many residents in assisted living facilities will need, including doctor visits and medications.
Impact on Assisted Living Facilities
You will interface with these programs as an assisted living facility owner. Medicaid can directly influence your revenue because it pays for long-term care for eligible residents. While Medicare does not cover long-term care, it is essential for your resident's overall wellness.
Final Thoughts
To summarize, Medicaid and Medicare are foundational programs in the healthcare landscape, each serving different needs and populations. Understanding these programs ensures better financial planning and resident care for assisted living investors.
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Show full transcript 👇
Transcript
00:00:01
[Music] hey guys it's brandon gustafson welcome back to assisted living investing happy to have you on the channel today i just want to make sure that you are uh liking subscribing the videos and and following me on my other social media platforms and and make sure you check out assistedlivinginvesting.net i'd love to have you over there check out the free resources and subscribe to my newsletter for future content the last four videos we've been talking about my calculator and doing kind of a really in-depth
00:00:40
overview of how to use a tutorial on how to use a calculator how to underwrite an unassisted living facility my process that i go through i hope those videos were helpful to you make sure you go and check those out they should be up here in the cards and and make sure you give me some feedback on that is that helpful for you is it something that is helping you understand kind of the process of underwriting and understanding uh what it's like to to underwrite a facility i'd love to see your comments and see what i can do to
00:01:10
help you out on your journey to purchase your own assisted living facility today we're going to talk about what are medicaid and medicare uh just kind of give an overview of what they are next video we'll be getting into how they impact assisted living but today i wanted to give you a quick overview of what they are how they work and just give you a good understanding of what medicaid is what medicare is how people qualify for them just so you have a good base understanding of exactly what those programs are because
00:01:36
as you get into assisted living you're going to hear these terms thrown around and you might be a little bit familiar but i think a lot of people get them confused so i want to give you some clarity on exactly what the two different programs are because they are different they have different a lot of differences in them i just want to make sure that this is all clear for you so you understand what you're getting into so first off what is medicaid medicaid is our nation's public health insurance
00:02:01
program aimed at serving people who have low income medicaid is a federally funded program but it's administered at the state level so each state has their own flexibility to administer the program within the mandated federal guidelines so they're able to kind of make some decisions budgets are approved at the state level and they are then administered by the state a person qualifies for medicaid in large part because they meet a low income threshold or they have something that that causes them to
00:02:34
need um medicaid services for medical reasons so it could be a variety of things i'll get into that here a little bit later in the video so that's medicaid now what is medicare medicare is a is also a federally funded program but it's administered at the federal level so you probably have heard of cms which stands for centers for medicare and medicaid services the the director of cms is actually appointed by the president so president biden has has appointed somebody to head up cms president trump did that prior to
00:03:07
that every president has has a person and a lot of times you'll see former directors of cms go out and they create really cool innovative companies um within within the healthcare space so cms has a really good track record of bringing in good very intelligent people um to to head up the program regardless of your political views there there are some really cool things that come out of cms with that said cms is a federally funded federally administered program it's slow moving it's cumbersome
00:03:42
that's just a part of what it is a person will qualify for medicare when they turn 65 and there are several different parts that make up medical so there are several different parts that make up medicare and you may have heard of some of these so part a medicare is for inpatient or hospital visits part b is in boy is for outpatient clinic or specialist visits and part d is in dog is for prescription drug coverage so those are kind of the big three main parts but you may also hear of things like medicare
00:04:15
supplement plans or medigap plans it's actually a lot of what i do in my full-time job is is kind of work on those things medicare supplement plans are plans that supplement a beneficiary's care by helping take care of healthcare associate costs like co-pays or co-insurance deductibles some are getting to the point where they're offering some innovative options to the plans like including vision and dental care now none of these parts of medicare cover long-term care part a b d medicare
00:04:45
supplement plans none of those are going to care take care of long-term care and that's where assisted living falls in the the landscape of of health care so none of these parts part a b d medicare supplement plans none of them are going to cover long-term care and that's where assisted living is going to fall in the healthcare landscape so your assisted living facility you're not going to be dealing with medicare your residents will have medicare uh it's very likely that they'll have medicare
00:05:13
but the coverage that they have their medicare coverage is not gonna be something that um you're gonna be receiving reimbursement from that it's just those those services those healthcare services they don't overlap so that's something that you'll want to be aware of medicaid yes medicare no so who is it that qualifies for medicaid the first group that qualifies for medicaid are low-income families and this could be people that make low income there are certain like economic
00:05:43
thresholds and each state is is different you may have heard when president obama was was in office the the coverage gap and trying to expand medicaid that was to hit those people that fell into this gap where they made too much to to too much money to qualify for traditional medicaid they didn't make enough so they couldn't get things through the healthcare marketplace so that's that was the the gap in coverage so families that need assistance because they kind of fell into that gap
00:06:15
or they fall below this threshold they were able to get medicaid children there's there's a program that is called the children's health insurance program chip for short and that is going to be specific to to children that need care and then another one is pregnant women so pregnant women can actually kind of fall into the the chip program um it's it's not called that i can't remember exactly what it's called but they can kind of get medicaid benefits um to help them out through prenatal care even the
00:06:47
delivery of their baby so those are some options for low-income families the next group that can qualify for medicaid are individuals that have disabilities so this could be children with autism cerebral palsy hiv and aids or mental illnesses so my one of my facilities is a mental health facility the one in colorado and many of our residents there qualify for this type of medicaid so they deal with just various different types of mental illnesses and they qualify for medicaid through the mental health portion and the last
00:07:19
group that qualifies for medicaid are elderly individuals so this could be medicare beneficiaries who need assistance paying for medicare premiums for example maybe they they fall into that gap and they they don't they don't uh hit that threshold and so they need assistance so medicaid can step in and help them make those those medicare premium payments that they need to make uh it could be a community waiver participant so in utah this is called new choice waiver there are other waiver programs
00:07:45
throughout the nation but the waiver program is approved and it's funded by the state um and and a lot of times you're going to see assisted living falling into this category for the type of reimbursement that you're getting it'll be in a waiver program the other one is nursing home residents so nursing homes and assisted living are not the same but they kind of fall into this this group that is institutional care or long-term care it's it's there for the long haul so medicare does not reimburse for
00:08:17
institutional care or long-term care but a lot of that can be supplemented by medicaid so those are some of the the groups of people that qualify for medicaid and how they qualify a little bit of background there so to recap today we were talking about what medicaid and medicare are really diving into what medicaid is what medicare is who qualifies for medicaid and just how can just so you have a good base understanding of what those programs are i think as you're getting into healthcare as you're getting into
00:08:44
the space of purchasing an assisted living facility i you need to be aware of what's going on in the industry uh be aware of some of these terms and i'd love to to give you some videos on those please comment down below if that if that would be helpful i can give you an overview of of just kind of the healthcare industry i mean a lot of you i think are getting into this where uh it's brand new and you're attracted to the the asset class because it has good returns but you're kind of scared
00:09:10
because it's it's healthcare and and you don't know exactly what that means and you need some help with that so comment down below if having some videos that kind of go over terms and explaining the process of things would be helpful for you i'd love to get into i have a lot of experience there with my education my master's in healthcare administration having worked in the healthcare industry for about 10 years now i just have a lot of a lot of experience that i'd love to
00:09:34
share with you and help you along your journey as you look to get into assisted living and next time we're going to be getting into how medicare and medicaid work specifically in assisted living so i'm going to dive even deeper into these different programs how they might impact you as the owner of an assisted living facility so you can kind of understand the process and i'm just kind of doing a little series here on on these government-funded programs so you have a good understanding of exactly how they
00:10:00
work and can help you along your way along your journey so that as you get into this nothing is surprising um i just want to make sure that everything is kind of up there up front and you understand exactly what's going on uh make sure you comment uh down below if you have questions or you want me to dive into more of this content just kind of the way that the healthcare works make sure you like the video please give me a thumbs up it helps other people find this content uh and and ring the bell so
00:10:27
that you get notified uh when when i put new videos out like this make sure you're subscribing follow me on all my social media platforms and then make sure you visit me on assistedlivinginvesting.net i'd love to see over there i'm going to have free resources over there join my mailing list for future content and would love to see you over there thanks for watching and have a great day [Music] you
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