7/18/2012 8:03 PM ET|
Will you get Dad's nursing-home bill?
The gap typically occurs after the patient's savings and other assets have been exhausted -- which can happen fairly quickly in high-cost states, where care often costs $12,000 a month -- but before he or she is approved for Medicaid, the government program that pays nursing-home bills for poor people. (Medicaid is a separate program from Medicare, which covers health expenses for people 65 and over. Medicare typically doesn't cover custodial costs, like those that make up most nursing-home care. )
Such gaps are growing more common as states make Medicaid tougher to get, elder-law attorneys said. The application process can involve reams of documents, and decisions by the states can take months -- sometimes more than a year -- which can lead to huge nursing-home debts.
Even when filial-responsibility laws aren't invoked, your parents' long-term care can still wreak havoc on your extended family's finances. One study found that people caring for their parents lose an average $304,000 each in wages, pensions and Social Security benefits, as I wrote in "The high cost of caring for parents."
When parents don't have the means to pay for their own care, their children often wind up reducing work hours or even quitting their jobs to help out. Caregivers may not be able to save adequately for their own retirements and long-term care, which means they may become a financial burden to their own kids.
So if your parents or in-laws are still alive, even if they're in good health now, you should consider taking the following steps:
- Find out if your parents are prepared. Do your folks have long-term-care insurance or substantial savings to pay nursing home bills? If you don't know, asking can be tricky, but one way to start is by talking about your own efforts to prepare for the future. For example, everyone needs a will, a health care directive and a power of attorney for finances, said Gregory French, the elder-law academy's current president and an elder-law attorney in Cincinnati. The will expresses how you want your estate divided after your death, while the two other documents help others make decisions for you if you become incapacitated. Once you have your own documents in place, ask if your parents have this paperwork ready. If not, ask if they'd like help preparing it. "A discussion about long-term care fits very naturally into that.," French said. (For more on preparing for incapacity, read "3 must-have legal papers.")
- Consider long-term-care insurance. If your parents are rich, they should be able to pay for long-term care directly, although the tab may reduce your inheritance. If they're poor, they'll likely wind up on Medicaid. Everybody in between should at least consider long-term-care insurance, elder-law attorneys said. "We have a lot of clients who pay or help pay for their parents' long-term-care insurance," said elder-law attorney Ronald Fatoullah of Great Neck, N.Y. A life insurance policy with a long-term-care rider is another option for families with the means to pay the premium, said Fatoullah, who serves on the elder-law academy's long-term-care task force. The problem with either type of insurance is that coverage isn't cheap, and health problems can prevent getting it at all. A couple, both aged 55, could expect to pay an average $2,350 a year for long-term-care insurance, according to American Association for Long-Term Care Insurance, with premiums and denial rates rising sharply with age.
- Be careful about accepting gifts. Families often try to get around Medicaid rules, which require applicants to be essentially impoverished before they can get coverage, by transferring a parent's house into the children's names, for example, or making cash gifts. All that does is delay the parent's eligibility for Medicaid, perhaps forever, said Elizabeth Gray, who practices elder law in Fairfax, Va. Furthermore, nursing homes have been known to go after the recipients for an amount equal to the transfer. If your parent may end up on Medicaid, get advice from an elder-law attorney before accepting any transfers or gifts. If the money has already changed hands, keep it in cash rather than spending it, because one way to "erase" the Medicaid penalty for such transfers is to give the money back, Grodberg said.
- Take charge of the Medicaid application. Your parent's nursing home may offer to help with the application for government assistance, but Hazen has seen cases where nursing homes not only filed inadequate applications but then failed to tell families the applications had been denied in time for them to file an appeal. Consider hiring an elder-law attorney or a geriatric-care manager to help guide you through the paperwork.
- Get good advice. Don't rely on relatives, hearsay or random Internet searches when applying for Medicaid or dealing with nursing-home billing departments. This is complicated stuff, and one wrong move can have expensive consequences. Even if you're not able to pay for extensive, continuing legal advice, consider at least one session with an elder-law attorney familiar with your state's rules and regulations. "If someone gets good advice and follows through, they should be OK," Grodberg said. "It's the people who think they can do it on their own that are going to get hurt."
Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.
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While I agree that we need to help our parents, this goes too far. I agree that those who've taken funds from their parents or cheated them on their home should pay, but should my retirement fund be wiped out because my father gambled his money away or never thought to save? If I have money but the siblings don't do I have to pay it all? I am 60 and my father is 84 and going strong. I've planned for my retirement and long term care and talked about his but can't make him do anything. If his money runs out, he should be able to qualify for Medicare.
On the other hand if I had millions and could afford it without jeopardizing my own long term needs, I would expect to.
I can see being held responsible if you were given large sums of money from your parents and shortly after they run out . But for those people who have no relationship or an abusive past relationship with their parents, this is a slap in the face.
I just lost my mom, I was trying to sell my house to help her, I left home at 16, and I contributed to her financially longer than she had raised me. I never held back and even sold things I had at discount whenever she needed anything. I was the first to show up in the morning and take her for breakfast, shopping, a ride out of the house. I helped her with her small company for over 35 years, so her and my younger sisters would be able to have what they needed first. I seldom took any small amount of money for it. I contributed despite my own physical limitations, my own injuries. I would do it again, I have no regrets anything for my mother, ......... now I'm glad I did.
OK- This is ridiculous. 90% of what is posted here is dating SPAM. Get rid of it! readers- mark it as spam. Spammers get lost!
Oh by th eway, in my prior post, I forgot to mention that we have paid for the insurance co-pays for short term nursing care for my husbands elderly mother. Cost us thousands. WIth four parents, we would have no money left for our own care and we have no children to take care of us. If I were a parent, I would not want to wipe out my childrens savings when my own ran out. No one would let their parents starve, which is I think the original intent of the laws applied, but othe than that, I don't think you can be responsible for the debts of your family members
People don't realize they need your money to support the wh ores who have multiple babies by multiple baby daddies who will reap all kinds of benefits and never have to be accountable for anything.
Medicaid will put a lein on your loved ones home at a rate of 50% of the taxable value if they are in a nursing home with medicaid benefits. Reward for doing well and trying to have something.
ok, i work in a nursing home in one of the above listed states. my job happens to be clinical reimbursement. we do not sue families for a patients stay. all patients are screened prior to admission, both medically and financially, but not their families. if a patient enters the facility and qualifies for medicare skilled services, medicare part A will pay for 100 days of the stay. medicare will pay 100% of the first 20 days and 80% of the remaining days as long as the patints is recieving skilled services. the 20% copay is paid generally by a patients secondary insurance. if a patient does not have a secondary insurance and meets the financial qualifications, we assit them with applying for medicaid to pay their copay. in many cases where someone does not have a secondary insurance and/or does not meet the financial criteria for medicaid, their copay is written off by the facility.
if a patient enters the facility under medical assistance, (ie:medicaid) they must meet certain medical and financial qualification before admission. the only time that a facility generally would pursue a family for payment is if the family agreed either to pay privately for a full stay or for a copay or if their was some sort of fraud involved.
unfortunately, many people do not see an elder care attorney to help them with this prior to the need for some type of long term care.
we dont know all the specifics of what was involved in this case. for instance, in my state to be eligible for long term care medicaid a patient must have under a certain amount of monthly income and assets. one of the rules for eligibility is if their is a home or large sum of money that was given to a child or family member it must be done more than 3 years prior to being eligible. someone cannot sign their house over to their son and expect for the state to pay for a nursing home a month later. if that was what occurred in this case, then i would agree the son is responsible. did the son sign a contract with the nursing home agreeing to pay for moms care privately? was there money or a house that was transferred to the sons name recently to hide the assets?did mom initially meet the clinical requirements for medicaid but as she got better with rehab no longer meet them and stay past the authorized days disputing the medicaid decision? the article states the woman left the country. was she not a US citizen? was she visiting from another country when she got sick and therefore not eligible for medicare or medical assistance? there are just a lot of variables here that we dont know.
as far as what jilly said, we do all of those things for our patients and more!! we work where we do with the geriatric population because we care!! ...and 12k a month??? seriously???
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