Planning for long-term care can feel overwhelming, especially if you or a loved one is facing the possibility of needing daily support. Many families in New Jersey find themselves asking the same question: What’s the difference between Medicaid and Medicare when it comes to paying for long-term care? In short, Medicare is a federal health insurance program that generally does not cover ongoing custodial care, whereas Medicaid is a state and federally funded program that can cover long-term care for individuals who meet strict financial and medical eligibility requirements in New Jersey.
Knowing how each program works and how they might work together can help you make informed decisions before a crisis hits.
What Medicare Covers for Long-Term Care in NJ
Medicare primarily serves people age 65 and older, as well as certain younger individuals with disabilities. While it covers hospital stays, doctor visits, and short-term skilled nursing care, its role in long-term care is limited.
Medicare may cover:
- Short-term skilled nursing care after a qualifying hospital stay of at least three days, up to 100 days, if you need skilled services such as therapy or wound care.
- Home health services for a limited period, if you are homebound and need skilled nursing or therapy.
- Hospice care for those with a terminal illness and a life expectancy of six months or less.
What it doesn’t cover: Medicare does not pay for custodial care (help with bathing, dressing, eating, and other daily activities) if that is the only care you need. This is where many families discover a gap in coverage.
How Medicaid Works for Long-Term Care in NJ
Medicaid is designed to cover long-term custodial care for individuals who meet both financial and medical eligibility requirements. In New Jersey, this includes nursing home care and certain in-home services through state programs.
Key points about NJ Medicaid and long-term care:
- Financial eligibility: For 2025, an individual applying for NJ Medicaid for long-term care must have income and assets below certain limits. Some assets, like a primary residence (up to a set value), may be exempt.
- Look-back period: New Jersey applies a five-year “look-back” period to review financial transactions. Transfers for less than market value during this period can result in a penalty, where Medicaid will not cover the care.
- MLTSS program: Medicaid Managed Long Term Services and Supports offers eligible residents care at home, in assisted living, or in nursing homes.
The rules are complex, so many families seek guidance before applying to avoid costly mistakes.
Why the Difference Matters for NJ Families
The distinction between Medicare and Medicaid affects how you’ll pay for care. Medicare’s coverage often stops short of ongoing custodial needs, while Medicaid can cover them but only if you qualify.
Without planning, some families spend down their assets before realizing Medicaid could have helped sooner. Others delay applying because they assume they won’t qualify, missing opportunities to preserve savings.
Can You Have Both Medicare and Medicaid in NJ?
Yes. Many New Jersey residents qualify for both programs, known as “dual eligibility.” In this case:
- Medicare is the primary payer for medical services like hospital stays, outpatient care, and short-term rehab.
- Medicaid can cover long-term custodial care, nursing home costs, and some out-of-pocket expenses that Medicare does not.
For example, Medicare might cover post-surgery rehab, and once that ends, Medicaid could pay for ongoing custodial care if you meet NJ’s requirements.
Planning Ahead for Long-Term Care
The earlier you plan, the more choices you have. In New Jersey, preparation might include:
- Reviewing your current assets, income, and insurance
- Understanding how the Medicaid look-back period could affect you
- Considering long-term care insurance or other funding sources
- Working with a long-term care planning professional to structure your finances to preserve eligibility while protecting your resources
Even if you’re healthy now, knowing the rules can help you act quickly if needs arise.
E.A. Goodman Law Can Help
At E.A. Goodman Law, we help New Jersey seniors and their families understand the differences between Medicare and Medicaid, avoid common missteps, and prepare for future care needs. Whether you are planning ahead or facing an urgent situation, we can assist with Medicaid planning, asset protection, and other legal strategies to protect your care and your financial security.
Contact us today to schedule a consultation to discover how we can help protect your future and bring peace of mind to your family.
Posted in: Medicaid Planning