Long Term Care Planning at Divorce is Important
Question: Just before my husband and I completed our divorce agreement after a 26 year marriage, my father died and, within weeks, my mother was diagnosed with Alzheimer's Disease. Since my brother and sister live in other states, the responsibility of caring for my mother's will lie with me. Because the majority of my parents' assets were used during my father's illness and because my mother's income is minimal, I learned very quickly that my mother's money will run out long before her need for care. To my surprise, I also found out that me, my brother, and my sister could be required to pay for my mother's care after her money runs out. I am very concerned that my divorce settlement -- which is all I will have -- not to mention my sibling's assets and income, could be used up. Why hasn't more been written about this problem? What can I do to avoid it? Are there any special arrangements I should make in my divorce settlement?
Answer: Divorce planning must include consideration of both disabilities and long-term care, not only for husband and wife, but also for children. Now, that the planning process will extend to parents.
Before qualifying for Medicaid, your mother will be required to spend all but $2,000 of her savings on nursing home care and, each month, she will be required to contribute almost all of her income toward the cost of nursing home care. Today, 29 states make adult children responsible for medical services, but, as of today, not nursing home care.
If a concept called "Family Responsibility" becomes law, states will be able to consider the incomes of adult children in determining whether or not their parents qualify for Medicaid. Vetoed by the President in the past, Congressional Medigrant proposals could allow states to make adult children financially responsible for the cost of their parents' nursing home care.
Family Responsibility could threaten the family finances of adult children whose incomes are greater than the state's median income -- an average of $32,264 in 1994 -- when a parent needs nursing home care. And since there are no limitations on how much of an adult child's income could be considered as "available" for parents' care, states could totally deny Medicaid assistance to a nursing home resident or pay only part of nursing home costs after requiring a contribution from the adult children.
Bottom Line: States could hold adult children responsible for such a large portion of parents' nursing home costs that the children would not be able to plan for retirement and would not be able to send their own children to college. Because nursing home care uses nearly onefourth of Medicaid expenditures and because states are encountering pressure to cut Medicaid expenditures for nursing home care and because of large cuts in federal funding. states will likely use cost-cutting alternatives provided by Congress.
Additional protections would also be repealed by the Congressional MediGrant proposal. For example, the prohibition against nursing homes asking Medicaid beneficiaries or their family members to pay more than the Medicaid payment rates for covered services, and the prohibition against nursing homes seeking family members as guarantors of private payment as a condition of admission or continued stays for a nursing home resident who is eligible for Medicaid.
Because of the potential fallout, we suggest that before you complete your divorce agreement, you contact an elder law attorney who can advise you of your rights since the Medicaid program varies considerably from state to state.
