You helped your aging parents find a long-term care facility that would meet their needs and budget, and made every effort to provide for their comfort, but financing their expenses was never part of the deal. Or was it?
The 2012 landmark case of a Pennsylvania man who was forced to pay his mother’s $93,000 nursing home bill gave more than a few adult children cause for pause. Who can blame them given the rising cost of eldercare? 1
According to the most recent “Cost of Care Survey” by Genworth, the national median amount paid for assisted living residences in2021 was $4,500 per month.2
Senior citizens in need of custodial care can burn through their cash reserves quickly. And, yes, depending on where their adult children reside and what documents they sign, they could potentially be on the hook for their parents’ unpaid long-term care bills, said Barbara E. Little in an interview, an attorney who specializes in trusts and estates for Obermayer Rebmann Maxwell & Hippel in Cherry Hill, New Jersey.
“It’s not prevalent today, but depending on changes in the law and the diminishing availability of public funds, it may become more prevalent,” she said, noting long-term care facilities may be more motivated to pursue family members for payment as Medicaid reimbursement rates decline. “There are several cases recently that have held children responsible for paying their parent’s bills.”
Unbeknownst to most Americans, many states have “filial responsibility” laws in effect that could potentially obligate adult children to support their impoverished parents. That includes paying the tab for basic necessities like food, housing, clothing, and medical attention, according to Little.
Some states allow nursing homes to file a civil court action to obtain financial support or cost recovery, while others can impose criminal penalties on children who do not support their indigent parents.
Filial responsibility statutes, which derive from England’s “Poor Laws” of 1601, were designed to minimize the state’s burden in administering public assistance programs, such as Medicaid.
Thus, they generally require that parents, adult children, and spouses support each other financially to the extent they are able, and, in some cases, only permit private entities to pursue family members for payment in cases where public funds have been spent.
The widely publicized case of the Pennsylvania man who was held responsible for his mother’s long-term care bill, however, did not involve public funds. Instead, he was sued by the nursing home after his mother left the country with unpaid bills for private care — before her Medicaid application was approved.
Most states stopped enforcing filial support laws after Medicaid was created in 1965, the federal-state health insurance program for low-income individuals, said Little. These days, Medicaid generally steps in to pay the tab when nursing home residents run out of money.
But a few states have left the door open for nursing homes and other health care providers to demand payment from family members of residents with unpaid bills, said Little. Pennsylvania, in fact, resurrected its support laws in 2005.That said, it’s still rare for adult children to be held responsible for their parents’ unpaid bills. (Learn more: Helping your parents while protecting your own )
“Other than the landmark case in Pennsylvania, we have heard of no cases in which the adult children ever actually paid for their parents’ nursing home bills,” said Alex Guerrero in an email interview, director of operations for the American Elder Care Research Organization, which manages the Payingforseniorcare website. “It is, no doubt, a sensational headline, but perhaps in reality it is not really a threat.”
Little agrees, noting that many (not all) of the cases in which adult children have been forced to pay up involved fraud or a disregard for costs incurred. “There’s usually some evidence of wrongdoing, or generally not doing as much as one could do” to manage costs, she said.
While filial responsibility laws are a minimal risk, however, adult children who help their parents sign the residency agreement for their long-term care facility can also potentially find themselves liable for their parents’ eldercare bills, said Lori Smetanka, executive director of the National Consumer Voice for Quality Long-Term Care, in an interview.
Indeed, while the Nursing Home Reform Act generally prevents a nursing home from requiring a person other than the resident to assume personal responsibility for any cost of the resident’s care, some nursing homes and debt collectors do bill or sue residents’ family members and friends for the cost of care on the basis of their admission contracts, the Consumer Financial Protection Bureau reports.4
Family members, said Smetanka, should read all contracts carefully and never co-sign if they do not intend to use their own resources to pay the tab after their parents’ assets run dry.
In some cases, the language on residency or admission agreements can be confusing or even deceptive. A few states, including California, now require nursing homes to use a standardized admission agreement to protect consumer interests.3 (Related: How to choose a nursing home)
“This is something adult children need to pay attention to,” said Smetanka. “When presented with an admission agreement as your parent goes into a nursing home, you need to be careful about the language in that agreement to be sure you’re not signing on to be the guarantor for the parent, if that is not your intent.”
Is power of attorney responsible for nursing home bills?
That’s particularly good advice in cases where the adult child is designated to manage their parents’ finances through a power of attorney legal document, she said. Any residency contract he or she signs should be clear that only the parents’ funds will be used to cover costs and not their own — again, assuming that reflects the adult child’s wishes, said Smetanka.
“Nursing home care is very expensive and it’s a big commitment, so adult children need to really pay attention to what they sign,” she said. (Learn more: Longevity risk and retirement planning)
In the past, some nursing home facilities required a family member to co-sign for their parent as a condition of admission, making them legally responsible for future bills. That’s no longer allowed, Smetanka said, noting new federal regulations were passed in October 2016 that prohibit nursing homes from requiring or even requesting third party guarantee for payment.
“That is certainly a welcome protection for adult children who have their own responsibilities in terms of providing for their children and saving for their own retirement,” she said. “But adult children still really need to be knowledgeable about what their rights and responsibilities are.”
Consumers with questions or concerns about long-term care should contact their state ombudsman, who can help advocate for nursing home residents and answer questions, said Smetanka.
Talk with your siblings
Little separately encouraged adult siblings to have a frank family discussion about how costs related to mom and dad’s health care should be handled, especially if one sibling is providing financial support.
“We see a lot of situations where siblings get frustrated with each other because one sibling is paying and the others are not,” she said, noting that sibling may later use filial support laws to try to get their brothers and sisters to pay their share. “We really encourage early dialogue and entering into a caregiver agreement that outlines who is responsible for paying and how the caregiver will be reimbursed.”
If one adult child is paying for a part of their nursing home fees, for example, they might stipulate in writing that they will be compensated later through the parent’s estate. (Related: How to keep heirs from fighting)
Or, if the parent lives at home with the adult child, he or she may collect monthly rent to help defray the cost of meals and any home health services that may be required.
“That’s beneficial because there’s a sense of equity there,” said Little. “When everyone is on the same page, there’s less of a likelihood of hard feelings later on.”
We all want the best for our parents, but their long-term care bills need not compromise our own financial well-being. To protect your personal savings, Little suggests researching the filial support laws in your state, reviewing all residency contracts carefully, and initiating dialogue with your siblings to ensure that family caregivers are fairly compensated.
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This article was originally published in March, 2017. It has been updated.