Long Term Care (LTC) Financial Responsibility Case

Happy senior couple walking together on a beachLTC Financial Responsibility Case – You need to know about this!                     

Did you know that you can be sued for the cost of your parents’ care?  A 2012 court case in Pennsylvania made us sit up and take notice of this potential risk.  An older woman was involved in a car accident, and afterward required rehabilitation in a residential care facility.  She applied for Medicaid during her stay, but the application was not yet approved when she checked out of the facility and left the country, leaving a bill of $93,000.  The facility sued her son for the balance under the state’s filial responsibility law, which requires spouses, children or parents of indigent persons to support them.   In this case, the woman had a husband and two other adult children who could have been held responsible, as well as her pending Medicaid application.  However, the appeals court ruled that the facility could choose which family member to pursue for payment of the bill.

The lesson here is that if you have the ability to pay, you may be required to do so, regardless of others who might also have an obligation to cover the costs of your parents’ care.   There are 29 states that have filial responsibility laws, including California.   They have seldom been enforced, but now that states are strapped for funds, delays in approval of Medicaid applications are likely to become more common.

The Center for Long-Term Care Financing estimates that one-third of Medicaid long-term care costs are for seniors who could have purchased their own insurance, but didn’t.  California has used the partnership program to encourage families to insure for this type of care by allowing them to retain assets equal to the amount their policy has paid, and still qualify for Medicaid later.  This sort of approach is a “carrot,” offering incentives to families to address long term care through private coverage.  In the current fiscal environment, states are likely to employ the stick as well, using filial responsibility laws to hold families accountable for the costs of elder care.  If your parents are insurable, it might make sense to join forces with your siblings in offering to help pay their premiums for Long-Term Care insurance.  If your parents qualify for Medicaid, encourage them to apply as early as possible.

If you need some help understanding the options in your particular situation, please don’t hesitate to call us at 408-551-6100 or toll free 800-927-8314 and ask to speak with one of our financial advisors.

Best Regards,

Retirement Capital Strategies
A Registered Investment Advisor
1190 Saratoga Ave, Ste. 140
San Jose, CA 95129
Tel (408) 551-6100
www.rcsadvisor.com

Source: This article was written by Margaret (Peggy) Stephan, CFP® – LPL Registered Representative at Retirement Capital Strategies.

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