Can you imagine your aging parents losing their independence? It might be the conversation they don’t want to have with you. Will you, the adult child bring up this subject? What we see here at AgingParents.com is that when no one talks about it, the sudden costs of caring for them can overwhelm all but the most financially secure. Parents are unprepared and their adult children become very uncomfortable with the prospect of having to help support their aging loved ones.
Sudden costs happen when a parent falls, or has a stroke and becomes disabled. Anything unexpected can trigger the need for help. Mom or Dad (or both sometimes) can’t manage alone any longer. Then the scrambling begins.
Here is a typical scenario.
A health crisis happens to your parent. First, there may be a hospitalization. OK, Medicare covers that, together with supplemental insurance. A rehab facility is next with therapy and nursing care. Medicare covers that but only to a point. When the elder is ready for discharge, the family is told, sometimes a day or two beforehand, that they will have to get help for the aging loved one at home. ”Doesn’t Medicare cover that?”, they ask. Unfortunately, no, they are told.
So the family members, maybe YOU start looking for someone to come into the home to help with bathing and walking or meal prep or whatever the parent needs. You search the internet. An agency in your parent’s neighborhood looks good. When you call, you inquire about the cost. In some parts of the country the cost is about $30 per hour. According to the Genworth 2015 Cost of Care study, the national median price for someone to provide help with bathing, dressing and walking or other hands-on home help is $20/hour. Gulp.
When you do the math, you realize that even if your loved one needs just twenty hours a week at the average cost, it will add up to nearly $20,000 a year. If your aging parent doesn’t have an extra $20,000 a year, who will have to cover it? Will it be you? Will your parent drain savings to meet this need? This is the discussion that has to take place but in most cases the conversations are not happening.
A parent who is already disabled or who has chronic illness will not qualify for long term care insurance so insurance help is out. How much is in the bank, you wonder. They’ve never told you.
The cost of long term care for aging parents most often does deplete their savings accounts and investments, should it continue as it often does for the remainder of a parent’s life. The financial burden then falls on their children. It is expensive and there is no way out of it unless the older person has spent everything they have and can qualify for Medicaid. I would not recommend Medicaid as the best way to get quality care. Most people are terrified of the prospect, telling their children “promise you’ll never put me in one of those homes!” It’s sort of a last resort. If you can prevent it, you will.
Bottom line: be prepared or the cost of good long term care for your aging parents will come back to bite you, and hard.
Here are three tips on the subject of talking about your aging parents’ future:
1. Do not wait to have these discussions. Bring it up now, even if both parents are perfectly healthy and seem fine. The burden will fall on you if you are in the dark about what resources they have
2. Find out if they purchased long term care insurance. Lucky for you if they did, but only about 9% of seniors actually have this coverage. If not, you have a greater incentive to have the conversation about how to pay for care they may need.
3. Work with your parents’ financial advisor. If they don’t have one, urge them to find one who understands long term care costs. You and your parents need to plan ahead just in case. If their funds are in any sort of inaccessible investment, consider how to get the funds to a more liquid place so that they could be accessed to cover that home care worker in any sudden or unexpected situation.
The concept of potential disability or infirmity is not an easy one to bring up. But the smartest adult children are taking it on with aging parents, not only so they will be better informed about their parents’ resources, but so they will know if they will have to eventually contribute funds to the care costs themselves. These conversations are a must if you want to do prudent planning not only for them, but for yourself.
For guidance on how to have a conversation with your aging parent about finances, get The Family Guide to Aging Parents, available at AgingParents.com and on Amazon.
by Carolyn Rosenblatt, RN, Elder Law Attorney