Are you prepared to pay for your parents’ long term care?
Your mom or dad may have decided to move to an assisted living residence or a nursing home if they need comprehensive long term care. The cost of this care can range from $5000-10,00 per month depending on their location and the extent of care. Unfortunately at some point they may run out of money to pay for these services. At that time they will need to apply for Medicaid, a program jointly funded by their state and the federal government, to pay for their nursing home care.
In order to apply for Medicaid they must select a facility that is Medicaid approved. They must also meet the severe limitations on income and assets established by Medicaid. Medicaid funding has become a major budgetary issue for many states over the last few years, with states, on average, spending 16.8% of state general funds on the program. If the federal match expenditure is also counted, the program, on average, takes up 22% of each state’s budget.
As baby boomers retire at the rate of 10,000 per day dependence on Medicaid is very likely to increase. At some point states may no longer be able to fund these increases. They may be required to implement the filial responsibility laws. These laws could hold children legally responsible for the long term care expenses of their parents. They are on the books in 30 states but have rarely been implemented.
But recently the State of Pennsylvania enforced it filial support laws and found a defendant responsible for his mother’s long term care bill from a skilled nursing facility for $93,000. Other states may follow suit if their budgets get tighter.
What does this mean for you and your family? This possibility makes it increasingly important that you have a conversation with your parents about their plans for long term care. You need to ask them three basic questions.
- If either one of them needs long term care do they plan to stay in their home?
- If either one of them is incapacitated who do they expect to be the caregiver?
- If they need long term care services how will they pare for this care?
If initially your parents respond that this is really none of your business, you should tactfully answer that it may become your business. You can cite the case in Pennsylvania as an example.
Your conversation with your parents may uncover their plans to stay at home if they need care. In that case they need to look carefully at their home to see if it safe for a physically limited person. You may learn that they expect your spouse to be their primary caregiver. This opens up a whole new area of conversation. You also may find that they have significant assets to provide their care or they have long term care insurance.
You will not know the answers to these questions if you are afraid to engage them in this critical conversation. It all starts with three words… “Can we talk?