Caregivers, especially those who have been responsible for aging parents for a long time, have typically spent some of their own money to help provide care. While some seniors may have put aside money for their golden years or have purchased long term care insurance, many have few resources and those they were counting on to see them through have failed to sustain them through their aging years.
Many seniors and family caregivers put their faith in the Medicare and Medicaid system to pay healthcare costs, especially once staying at home is no longer an option. Medicare generally covers health care costs and rehabilitation to get our seniors back to their prior level of functioning. It doesn’t pay for custodial care that your senior loved one might require on a day to day basis and does not pay for long term care. Medicaid can pick up the costs of long term care once your senior becomes eligible.
So the time has come, your senior is now living in a long term care facility where all her needs are being managed. Time marches on and your senior has passed on. To your surprise, you receive a notice from the state Medicaid Recovery Unit asking, well more like demanding, you pay for your senior’s bill incurred while she was receiving care under the Medicaid program in a facility.
Filial Support Laws and Repayment of Unpaid LTC Bills
Twenty nine US states have filial support laws that can be used to charge adult children who are caregivers for the unpaid long term care bills of their parents. Pennsylvania is a leader in applying this law, South Dakota has filed a few claims and other states, who find themselves needing to fund state Medicaid programs, may look to adult children for re-payment of bills not paid because Medicaid applications were not made by the adult children for whatever reason, such as lack of awareness, lack of access to financial records, inattention/refusal or urgent nature of care required.
In Pennsylvania, this law forces adult children to either apply for Medicaid for their parent or pay the bills. Under the filial support law, parents are required to be considered indigent and the child deemed able to pay. These terms are undefined, which gives ample leeway for the state courts to jump in.
In addition to the state, many healthcare providers in Pennsylvania are using the law to force the hand of adult children to apply for Medicaid and provide the necessary paperwork to get their parent approved for eligibility, especially when parents are unable to complete the application process themselves. This is a way to make families fully disclose assets which were potentially transferred to children and thus fair game for Medicaid. If adult children are considered responsible parties, then they are also deemed responsible for compiling and filing the necessary paperwork for state Medicaid eligibilty and reimbursement.
What Happens to the Senior’s Estate?
Under the 1993 US Budget Reconciliation Act, each state was mandated to seek estate recovery for every Medicaid recipient receiving long term care benefits after their deaths. Essentially, Medicaid coverage for long term care placement is looked upon as a loan and any assets the elder person might have can be recovered by the state Medicaid department. For those seniors who qualify for Medicaid, they are usually without assets but some have a probate estate with assets that transfer on death that are desired by Medicaid. This can often be avoided by advance planning by ensuring that your senior loved one has no probate estate at death through a variety of means such as joint ownership with right of survivorship. Beware that transfers of these types are subject to time frames limiting your senior’s ability to apply for Medicaid. It is recommended that you contact an elder care or other knowledgeable attorney to help with restrictions and plans for any assets before an emergency occurs.
What About the Senior’s Home?
For the most part, at the time of the Medicaid application the elder’s home is exempt from being seized by Medicaid for payment of long term care bills if the value is below $500,000 (this may be higher in some states, so check your own state’s rules). If the elder’s spouse is still living in the home, it should be exempt regardless of its value. In all states upon the death of a senior, Medicaid will seek ways to be repaid and may even file a claim against his/her estate and will desire re-payment when the house is sold.
Lawyers advise that in order to prevent potentially being responsible for the bill or losing a home to Medicaid, adult children need to seek advice about their parents finances and coverage for aging as early as when their parents turn 65 years old. Waiting until they are 80 and tragedy strikes is probably too late to protect you from this law. Getting long term care insurance, building in-law suites well in advance of their need, and planning for healthcare costs should be done early to avoid future problems. An elder law attorney can help assist you and your aging parents make the essential decisions for the family.
Do you have experience with this you would like to share with our community? We would love to hear from you!