Photo (cc) by ell brown
Medicare pays the lion’s share of medical services for our nation’s seniors. What it doesn’t pay, however, is for long-term nursing home care.
If you’re in the hospital for at least three days, Medicare will pay for up to 100 days of rehabilitative care. But when it comes to spending years in a nursing home, you’re out of luck.
And the price of nursing home care — $75,000 a year on average — could easily bankrupt a family.
So what will you do if your parents need a nursing home in their later years? One answer can be your state’s Medicaid program, designed to assist impoverished people. If your parents qualify, it’s a valuable source of help.
Qualifying for Medicaid
Medicaid is for those of all ages with low income and assets. When it comes to nursing homes, qualification rules differ by state. But according to Nolo.com, you can typically make up to 300 percent of the SSI income limit ($2,130 a month in 2013) and qualify.
Asset limitations also vary, but it’s common to be forced to “spend down” savings to $2,000 to qualify. (Some assets, like a home, don’t count.)
These are the basics — the exact rules you’ll deal with will depend on where you live and the type of assistance you’ll need. But the bottom line is that if you want Medicaid to pay the nursing home bills for your parents, they can’t be worth a lot of money.
Which leads to the question…
Could you be on the hook?
No one is talking seriously about forcing adult children to repay Medicaid for their parents’ nursing home care. Not yet, anyway. But Medicaid is under financial pressure, so the problem of who’s legally responsible for parents’ care is on the horizon.
A FindLaw blogger wrote a few years ago: “The pressure for Medicaid dollars is dangerously high, and having some children pay for some parental support is an often talked-about release valve.”
The possibility of billing children for their parents’ nursing home costs exists, in theory at least, because 30 states (PDF) have “filial responsibility” laws on their books. These laws hold adult children responsible for their elderly parents’ basic care. Elder Law Answers describes the laws. Legal publisher Nolo says they aren’t often enforced.
The FindLaw blogger wrote:
Filial responsibility laws vary widely from state to state, as does the method and frequency of their enforcement. This variance can range from simple fines for non-support, to civil remedies leveraged against children for not obeying the filial responsibility laws.
Money is tight
The pressure’s on in Congress to cut costs and cuts to programs once thought to be untouchable are up for discussion. Social Security and Medicare programs are in the crosshairs.
Adding to the pressure, many elders are living longer than they expected and they’re running out of money.
“Medicaid is in big trouble — cutting here, squeezing there — and will be inundated when baby boomers reach old age,” wrote The New York Times — and that was back in 2008.
“Research shows that at least 70 percent of people over 65 will need long-term care services at some point in their lifetime,” says Genworth Financial, a financial services company, in a comparison of the costs by state.
Lots of baby boomers are supporting their aging parents, in whole or in part, writes Forbes contributor Carolyn Rosenblatt. But the bills for nursing home care are huge. In 2013 the median national cost (half cost more, half less) for a semi-private nursing home room with 24-hour-a-day care was $207 a day, says (PDF) Genworth. That’s $75,555 a year.
What’s more, costs are rising. In 2038, when today’s 65-year-olds are 90, that semi-private room will cost around $246,000 a year, estimates Genworth’s future costs calculator.
How far could states go?
As the money crunch continues, could states possibly go after families to recover Medicaid payments for nursing home care?
Right now that seems unlikely. There are several buffers protecting adult children.
One buffer is in the laws themselves. In about two-thirds of the states with filial protection laws, nursing homes can sue families for residents’ unpaid care, but “most take into consideration the adult child’s ability to pay,” according to this Forbes contributor.
The biggest protection for families is in Medicaid rules. There’s no current move to change that. Wrote The New York Times:
When the elderly exhaust their assets, individually or as a couple, the government steps in and pays for their long-term care. Adult children are not part of the Medicaid eligibility equation.
Pennsylvania goes after the kids
Even though grown children are off the hook for their parents’ bills after Medicaid steps in, what about bills incurred while waiting to qualify for Medicare?
In 2012, a Pennsylvania state appeals court ordered the grown son of a nursing home resident to pay $93,000 for his mom’s care before Medicaid kicked in, wrote Elder Law Answers.
While these cases are rare, they may become less so. Elder Law Answers sees a trend:
The Deficit Reduction Act of 2005 made it much more difficult for the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. With enactment of the law, advocates for the elderly said that nursing homes would likely be flooded with residents who need care but have no way to pay for it, and that in states that have filial responsibility laws, the nursing homes might seek reimbursement from the residents’ children.
“While this is an unusual case, some practitioners wonder if rising care costs will cause more cases like this to surface,” Nolo writes.
What you can do
What can you do to protect yourself? Perhaps nothing, if your parents are running out of money.
But you may be able to protect your own children by considering long-term care insurance. AARP describes these plans on its site and MSN Money describes three types of plans. These policies are expensive, but even if you can’t buy total coverage, a policy with limited coverage may be better than none, says Consumer Reports, explaining how to buy long-term care coverage.