Medicaid is the nation’s largest health coverage program. The program was originally a welfare-based health coverage program, but has become a health insurance and long-term care program for those who are struggling financially and for people with disabilities. Because of its complexity, there is a lot of misunderstanding about the Medicaid program.
MYTH: Medicaid is obsolete.
FACT: Medicaid is an innovative program that has changed as the American health care system has evolved. Through the waiver process, states experiment with benefit design, eligibility, and delivery systems. Currently, several states are experimenting with transitioning long-term care services to home based setting.
MYTH: Medicaid is an inflexible program.
FACT: Medicaid has minimum federal standards, but states have flexibility to customize their Medicaid program beyond those minimum standards. In many ways, Medicaid operates like fifty individual state coverage programs.
MYTH: Medicaid spending is out of control.
FACT: The cost growth per enrollee for Medicaid is lower than comparable coverage under Medicare, private health insurance, and employer-sponsored insurance. Medicaid costs continue to increase, but so do health care costs across the board in the American health system.
MYTH: Medicaid provides “Ritz Carlton” coverage.
FACT: Medicaid has a unique role as a safety net for the weaknesses in our health system. The populations served by the Medicaid program require services that are not readily available in typical health insurance plans. Medicaid not only functions as an acute care plan for low-income families, but it is also the only alternative available for many individuals with disabilities and low-income elderly who require long-term care.
MYTH: Medicaid covers too many people and competes with private insurance.
FACT: The vast majority of the people who are covered by Medicaid do not have access to other insurance. Many work for employers who do not offer coverage. Many are priced out of the private market because of illness or disability. Studies of Medicaid have demonstrated that Medicaid as an alternative to private coverage is limited. Those who are newly enrolled into Medicaid were previously uninsured.
MYTH: Medicaid is for people who don’t work.
FACT: Working families make up 65% of those who receive Medicaid coverage. For those who are not in the workforce, like people with severe disabilities, Medicaid supplements cash assistance and makes available essential health care coverage.
MYTH: Medicaid foots the nursing home bill for affluent seniors.
FACT: Medicaid is only available to the very poor or those with health care expenses that have depleted their savings. The new Medicaid rules make it difficult to transfer assets to qualify for nursing home care. About three out of five nursing home residents are not on Medicaid at the time of their admission. Even when a person’s assets are depleted, they still must apply their income towards the cost of care, except for a meager personal needs allowance.
MYTH: Federal financing of Medicaid encourages wastefulness.
FACT: During hard economic times, more people need Medicaid coverage and spending increases. But, unlike the federal government, most states are required to balance their budgets so they are hindered from over spending. States struggle to control Medicaid spending even as more people are covered.
MYTH: The Medicaid program is inefficient.
FACT: Medicaid has lower administrative costs per claims paid than private sector health insurance. And, year in and year out, the per capita growth of Medicaid is about half the rate of growth found in private sector health insurance.
MYTH: Medicaid is a second rate program.
FACT: There is substantial evidence that Medicaid has improved access to primary and preventive health care comparable to that of those with private insurance. In particular, Medicaid’s inclusion of pregnant women and children has helped reduce infant mortality and acute health conditions.
The rules and regulations concerning Medicaid are not only very complicated, but also work independently from, and often contrary to, tax laws, veterans benefit and estate planning. Careful considering to individual circumstances is critical. Don’t go it alone. Call me at (203) 488-5586 to discuss specific situations to avoid making an inadvertent mistake.
Author: Mark R. Connell Attorney At Law, LLC
420 East Main Street, Suite 12
Branford, CT 06405
Phone: (203) 488-5586
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