You Might Be On The Hook For Your Parents’ Nursing Home Costs
The annual cost of care study was just released by Genworth, showing the average private room in a nursing home – for the first time ever – costs over $100,000 a year. If that number doesn’t shock you, it should.
Imagine your parents needing this type of care. Now imagine that instead of your parents having to pay it, you must cover the bill. This might surprise you, but a little-known legal doctrine on the books in about half of U.S. states, called filial support laws, could hold you responsible for the long-term care bills of your parents or other family members.
While filial laws have been on the books for decades, the massively underfunded liability of future long-term care costs for today’s retirees is sparking a new look at these old rules. The cost of long-term care in the U.S. is becoming a serious issue for retirees and taxpayers.
Retirees must to set aside large portions of their savings, buy long-term care insurance, or rely on family or Medicaid. And while Medicaid serves as a de-facto safety net if you run out of money in retirement, the heavy reliance on the program is putting stress on state budgets and taxpayers to fund the system.
Legal Precedence Taking Shape
The most widely discussed and popularized case of filial laws being applied to long-term care costs came in 2012: Health Care & Retirement Corporation of America v. Pittas. In this case, the Pennsylvania appellate division upheld a lower court ruling that found an adult son liable for his mother’s $93,000 nursing home bill. The mother had left the country and was not covered by Medicare. Additional court cases have erupted since.
In a more recent case, Eori ex rel. Eori v. Eori, a Pennsylvania court upheld a finding of filial-support obligation from one brother to another to help pay for the long-term care support of their seriously ill mother. This was an interesting development because it applied the law outside of an existing debt and professional facility.
Laws on this matter vary significantly by state. Some state laws apply only from parents to children and children to parents. Others include siblings. Some, like Pennsylvania, have a very broad scope of what costs you could be liable for. Others, like Arkansas, limit it only to mental health care. Meanwhile, while some states do not have filial support laws, different doctrines may require spousal support for medical or other necessary expenses, like burial costs.
A Law is a Law
The applicability, constitutionality, and public benefit of these support laws have been questioned by numerous articles. I’ve seen articles by attorneys downplaying the laws by stating that the laws have existed for decades and never been applied. Well, that’s fine and dandy, but if the law is there, it’s what we like to call a law.
The Pennsylvania law wasn’t applied in this area until 2012. And decades ago we didn’t have the same long-term care funding issues that we face today. Granted, there are many laws that might be thrown out by a court if enforced today. However, it’s not clear if this is true with filial laws since some states have enforced them in recent years.
Another argument downplaying filial and support laws is that if the bills would otherwise be covered by Medicaid, you don’t have to worry because Medicaid can’t go after family members for the bill. That is true for the most part – Medicaid itself won’t likely be using filial laws to recoup bills it covers. However, the issue is not about Medicaid going after a child, it’s about the nursing home or other provider going after the money.
In fact, Pennsylvania courts in Eori have said it doesn’t matter if Medicaid would have covered it. Under the law, if the cost is there, you can recover it from family. The nursing home could ask Medicaid or the family member for support. So, while Medicaid itself can’t come after the child, the nursing home can, could, and has done so.
Another issue that has been raised about filial support laws is their state or federal constitutionality. There is some validity here. There appears to be a valid concern as to whether you can make someone pay for a family member’s nursing home bill if that person was not involved with it and made no promise to pay it. Well, in Pennsylvania the courts have found this law to be valid and have upheld it.
However, if you look at the history of a similar law, often called the “Doctrine of Necessaries or Necessities,” a few states have said it was unconstitutional. This law required a spouse to cover the medical liabilities, burial, and other support aspects of a deceased spouse. However, the courts focused on the gender inequalities and public policy implications of the rule as being outdated. It is not clear the gender rules would come into play with filial support obligations and is it not clear where filial laws would fall in a public policy debate.
Who Foots the Bill?
The public policy aspect is interesting. Opposition would say it is unfair and unjust to require children to cover their parents’ costs. This seems reasonable. The parents are grown and should be responsible for their own costs. Requiring the children to pay for them would push the burden onto a new generation and could create new hardships. But, on the other side, if the parents are unable to pay their bills, who else will? Should we stick the bill with the nursing home or care provider?
If the care recipient can’t make the payment, we need the pass the cost somewhere. If it goes to the service provider, they might stop providing care to non-wealthy individuals or raise their costs on others to offset non-payment.
The costs could also be passed onto the state in the form of Medicaid or other state payments. Well, this isn’t really being passed onto the state, it is being passed onto other taxpayers. So then, why should we the taxpayers have to pay for someone else’s nursing home costs? Shouldn’t parents have been saving for retirement instead of sending their children to a top tier college, paying for their children’s wedding and honeymoon, and putting a down payment on their house? If they didn’t save enough, taxpayers have to cover it, kicking the costs to the next generation and truly unrelated parties.
So, should the long-term care burden and costs be pushed onto taxpayers or kept within the family unit? Honestly, I would rather see families have to cover their own family’s costs. At a minimum, the public policy argument doesn’t break clearly one way or another.
Family Cost Leads to Better Planning
Keeping costs within the family unit might have a benefit.
Families might actually plan for long-term care. After all, it is easy to stick the bill to Medicaid, but it might feel more challenging sticking your kids with the bill.
States might want to consider supporting and furthering filial responsibility laws in the same way that long-term care insurance was supported by Medicaid partnership programs. Supporting filial laws could actually ease the burden on Medicaid, help state budgets, and reduce the need to further raise taxes by shifting the onus of planning, saving, and preparation back onto the individual.
We know today that the current system isn’t working. Supporting filial laws would be a move to support long-term care planning and personal financial responsibility, two things we should strive for as a society.
Source: Jamie Hopkins of Forbes.com