When Costs of Care Are Too Much

Early preparation for costs of care for aging parents is crucial to minimizing family stress and worry about how to pay for care. Mom and dad want to stay at home. You are the caregiver learning first hand what happens when costs of care are too much.

Caregiving cost was never discussed. Dad needs care, and mom is trying to figure out how to pay for care costs. You have no idea what to do when the costs of care are too much.

When No Planning Limits Care

Nobody wants to talk about caregiving or needed care before the need arises. At that time, whenever this is, it’s usually too late to talk about planning for costs of care. Families are in crisis. Everyone is wondering what to do because there’s not enough money to pay for care.

Some adult children feel committed to finding a way to help loved ones stay at home. Quickly learned that the costs of in-home caregivers and care communities are well beyond the financial ability of aging parents who may not have saved appropriately for retirement years and care costs.

Even with pooling money, adult children can’t come up with enough to pay for needed care. What now?

Medicaid is Usually the Last Thought 

If there truly is no money, no retirement savings, no investment accounts, and an aging parent needs hands-on care, applying for Medicaid is usually the last thought. But in many cases if a parent has income but little savings, Medicaid should be one of the first thoughts. 

Many family members hesitate to investigate Medicaid because adult children are concerned about giving up their inheritance, no matter how small it may be.

For Medicaid to be approved, an individual must meet physical health requirements and financial requirements. In my experience, the financial requirements were more difficult to meet for the reason I stated.

Adult children want to receive a financial inheritance. The question is asked, “why do my parents have to spend their money on care?”

My answer is usually, “if they’re going to run out of money, now is the time to spend down funds so that your parents do qualify for Medicaid without any surprises or penalties.”

Over the years, I have had families attempt to spend or divert funds. These tactics usually backfired unless an attorney was hired specifically to draft a well-thought-out Medicaid plan.

Don’t Give Away or Loan Money or Property

Family members think that accepting loans or transferring property is the way around Medicaid. Usually not. There’s that little question on the application that asks, “in the past five years have you given away anything of value?”

Being dishonest on the application is usually not a good idea. It’s a federal offense and more than likely, the omission or fib that you list will be found out. If not sooner than later.

Talk About Caregiving Costs Early and Talk Often

The importance of talking about caregiving early and often is relevant to everyone. The likelihood that we will need care at some point in our lifetime is high probability. The likelihood of being a caregiver is great.

Aging parents don’t want to talk about needing care, and they don’t want to be a burden. Having conversations today helps plan for these eventualities and may prevent aging parents from being a burden.

Families who plan in advance fare better and worry less. More choices exist about options to remain at home and choices about care.

Without financially planning for care, choices are limited and eliminated. When Medicaid becomes the last resort, where and how a person receives care is no longer a choice. The government decides, and the person needing the care makes the best of the available options.

Medicaid Won’t Leave You Without Care—But The Care May Not Be What You Expected

Medicaid offers services for aging adults with healthcare issues that affect daily functioning. It is the payor of last resort.

In the early stages, care may be offered in the home until the limits of care are reached, and the aging parent cannot remain safely in the home. At that point, moving to a care community is necessary. Not all care communities accept Medicaid. Those that do may have long waiting lists.

Other communities may allow a “spend-down” meaning that if a period of private pay occurs, the person can remain in the care home and apply for Medicaid. These are usually better situations but still may not be ideal.

Expectations of Aging Parents May Not Be Realistic

The expectations of aging parents about their care and about the help that adult children can offer are not always realistic. I have witnessed the tug of war battles between unrealistic aging parents who refuse to admit their physical frailties.

Those who refuse to acknowledge that one day very soon, they will run out of money. Running out of money without a plan is the worse possible scenario.

Refusing to take action to spend down funds to live in a better than average Medicaid community results in damaged family relationships.

The aging parents blame the children for not doing anything to help. All the adult children can say is, “I told you this would happen.”

That statement usually results in a firestorm of disagreements. The reality is that the situation is what it is. The aging parent needs care. There’s not enough money to pay for care. Medicaid becomes the payor and care source of last resort.

This Doesn’t Have To Happen To You

If you are an adult child watching this scenario happen to your aging parents, there still may be time for you to avoid not having enough money to pay for care. The choice is between instant gratification and saving for retirement care. It’s between that annual vacation and paying for a long-term care insurance policy.

You can play roulette and hope that aging and needing care won’t happen to you. You can let the dice fall where they may and hope that your children—if you have any—will take you into their home and care for you for the rest of your life.

The choice to gamble on your future is yours. You can plan now or pay later in more ways than you might imagine.

© 2019, 2022 Pamela D. Wilson, All Rights Reserved. 

Return to Financial and Wealth Planning Category Return to All Category Page