It’s an unfortunate conversation that more and more adults are forced to have with their elderly parents. How best to fund the parent’s need for assisted living, in-home support or other forms of long-term care?
For many grown children, it’s a challenging dilemma. On one hand, they want the best care and treatment possible for their parents. On the other hand, the parents may have few resources to cover the bill, and the child has their own financial obligations. They may need to save for retirement and possibly even support their own children.
If you’re in this position, you know firsthand just how complicated it can be. Adding to the complexity, some states now have laws that allow nursing facilities to bill a patient’s closest relatives—usually their children—for unpaid bills. That means you could be on the hook for your parent’s care whether you want to be or not.
Fortunately, there are a few things you can do to manage the situation. Below are some tips on how to make sure you’re financially protected and your parent gets the healthcare support they need:
Have the conversation.
Both you and your parent may be reluctant to have a conversation about long-term care. After all, it’s not a pleasant subject. However, by talking about it now, you may still have time to make plans and prepare yourself and your parent.
You can learn about what kind of insurance your parent may have. You can discuss the types of care and facilities they may be open to. And you can explore government programs for which they may be eligible.
If you wait until your parent needs care to have this talk, it may be too late. Many patients are incapacitated because of strokes or cognitive impairments when they need care. That will leave you to sort out the situation on your own.
Reassure your parent that you only want to have a conversation. That doesn’t mean they need care now. It just means you want to be prepared when the time comes.
Explore all government options.
There are a variety of government programs that can help cover assisted living and long-term care. Many people mistakenly assume that Medicare will pay for long-term care costs. There are some limited instances in which Medicare will partially pay for care on a temporary basis. However, Medicare isn’t usually a permanent solution.
Medicaid will often cover costs in a Medicaid-approved facility. Medicaid, however, has strict asset limitations. Your parent will essentially need to be without any assets to qualify. They could gift assets to qualify for coverage, but they would have to complete that process years before the need arises.
Also, many veterans are eligible for coverage. However, their eligibility depends on their service, their income and their level of assets. If your parent is a veteran, you may want to contact your local Veterans Affairs office to get more information and explore their eligibility.
Inventory their assets.
Finally, you’ll want to make a list of your parent’s assets and determine how they can be used to fund any necessary long-term care. For instance, if your parent is incapacitated, they may no longer need their car. Could you sell it to raise money for care?
Similarly, if the house is paid for, you may be able to either sell it or tap into the equity through a reverse mortgage. That could provide a substantial amount of income to cover assisted living or long-term care costs. Life insurance policies with substantial cash value could also be a source of funding.
Get an inventory of all of your parent’s assets. You can then compare assets, insurance and governmental assistance to form a complete picture of funding options.
This can be a complicated process. You may find it helpful to work with a skilled and experienced financial professional. For more information, contact us at Foote Financial Group. We’re happy to serve as your dedicated resource and help you find the best strategy for you and your parent. Let’s start the conversation today.
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