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.
Check out the video, too:
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.
To ensure the success of your assisted living investment, download our Business Plan Checklist which will guide you through the essential steps of creating a solid business plan. Additionally, consider applying to our Assisted Living Investing Mastermind program. This comprehensive 12-month program is designed to guide you step-by-step toward owning and operating your own assisted living facility. With the added benefit of personalized coaching support, the program ensures you have the resources and guidance needed to succeed in this rewarding industry.
Download Your FREE Calculator
Stay connected with news and updates!
Join our mailing list to receive the latest news and updates from our team.
Don't worry, your information will not be shared.
We hate SPAM. We will never sell your information, for any reason.
