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A ‘sleeper law’ awakens

According to Forbes reporting, over half the states currently have laws holding adult children financially responsible for the care of their senior parents. This may include nursing home, medical and other bills. These are old laws that are rarely enforced but are retained as a warning to ensure good behavior.

However, a 2012 and 2019 case in Pennsylvania showed that these “scarecrow” laws could threaten the financial futures of middle-aged children. According to ABC News, in 2012, John Pittas was forced to pay for his mother's nearly $93,000 nursing home stay after her Medicaid application was not approved in time.

This has led Democrat state Rep. Kristine Howard to sponsor a bill called Stop Bankrupting Pennsylvanians Over Family Medical Bills Act.

“Pennsylvania’s outlier status in this regard is shameful,” Howard wrote in the bill memorandum in March. "Filial responsibility laws first emerged in the 17th century and became common in the colonies. While they have generally fallen out of favor elsewhere, Pennsylvania stands as the only state to have enforced its filial responsibility law in the past 25 years ... Given that Pennsylvania nursing homes average a cost of nearly $400 per day, this can quickly lead to bankruptcies.”

“It can be a rude awakening for many people,” Howard told Forbes.

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Long-term care costs

“Most adult children do undertake responsibilities for their parents as they age and especially if their parents’ abilities wane,’’ said Katherine C. Pearson, an elder law expert, to Forbes. “They do this because it is the right thing to do. They do this without laws obligating them to do so, thank goodness.”

But the costs to pay someone to take care of elderly parents can be exorbitant.

Statistics compiled by the National Council on Aging show a wide variance of median monthly nursing home costs — from a low of $5,125 in Texas to an astounding $31,512 in Alaska. Consider that latter figure for a moment: It equals $378,144 annually, just pennies shy of the median home sales price in Anchorage ($378,500).

According to Genworth, the monthly median cost in the U.S. for adult day health care and assisted living facility is $2,058 and $5,350, respectively. In-home care services are more expensive with the monthly median cost for a home health aide at $6,292.

In March 2024, the price of care of invalids and elderly at home was up a whopping 14.2% year over year, compared to an overall inflation rate of 3.5%.

Adult children of boomers face tough questions and tougher choices. Among the most gripping: How can they afford nursing home bills? And what happens if the money runs out — not just to their elderly parents but also to the family finances?

A patchwork of solutions

Relocating might be an option, especially if the overall cost of living in a given state is also cheaper.

Another defense against runaway costs comes via private long-term care insurance. However, Forbes notes that “a raft of carriers have stopped selling the policies because the risk is so high and healthy consumers aren’t buying policies because they fear premium increases.”

Medicare doesn’t pay for long-term care unless skilled nursing services are required and even then it’s only for 100 days.

Medicaid is the primary source of coverage for long-term care services and supports. In 2020, more than 30% of Medicaid’s $598 billion budget was for long-term care services, according to KFF. However, you need to make sure the senior qualifies for Medicaid in their state. For example, MedicaidPlanningAssistance.org says in 2024, a Pennsylvania single Nursing Home Medicaid applicant must have an income under $2,829 a month, assets under $2,000 and require a nursing home level of care.

Your parents’ savings may be of partial help at best. Figures calculated by The New York Times reveal that among seniors with between $171,000 to $1.8 million saved at age 65, about one in four living in a nursing home (23%) died broke between 2020 and 2021.

This may mean you’ll need to tap your savings to supplement what insurance and retirement savings can’t cover. To plan ahead, it helps to know where your older parents stand. Approaching potential care costs with clarity instead of guesswork can help prepare you financially for the possibility of a nursing home stay or other costs.

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Lou Carlozo Freelance writer

Lou Carlozo is a freelance contributor to Moneywise.

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