By Julia Quinn-Szcesuil
If your mom needed to move to an assisted living facility after a fall, would you know what to do to make sure she gets the best care possible and how to pay for it?
Don't feel ashamed if you said no – you have lots of company. In fact, 70 percent of adult children have never talked to their parents about financial plans, says Barbara McVicker, an elder care expert, author, speaker, and president of Stuck in the Middle.
But use that uncertainty to spur you into action because someday you might need to pay for senior care. If mom or dad haven't saved much for retirement and you don't know how Medicaid or Medicare works or how to compare costs for an assisted living facility or a nursing home, you could put your own finances into real disarray.
All families need to talk about how they will pay for senior care, says McVicker. Ideally, she says, it's when the kids head off to college and parents still have insurance and care options available through their workplace. But it isn't easy. Even if you bring it up, your parents might halt the discussion, citing privacy or cultural taboos against talking about parents' money.
If broaching the subject takes a few tries, you can at least start getting educated now. Start by organizing what McVicker refers to as the seven essential documents: a will, a trust, a Do Not Resuscitate order, a living will, a financial power of attorney, a health power of attorney, and a HIPPA privacy form so you can speak to your parents' doctors. Getting the advice of a financial planner or adviser who specializes in senior issues or an elder law attorney will also help.
A quick online search will give you information about what agencies, programs, and government plans pay for what specific treatment or situation. Find out what coverage your parents have and what they have saved to help pay for these costs, so you'll know what options are available.
Ask lots of questions so you will know what to expect in different circumstances. For instance, if mom needs to go to a rehabilitation facility after a hospital stay, did you know that if she goes home for a night or two first, Medicare will not pay for the rehab stay at all? If she goes straight to rehab, part of the expense is covered. McVicker says if you know how to play the game, meaning if you know all the rules and regulations, senior care will end up being both more affordable and more comprehensive.
"Find out how Medicare and Medicaid will work for your family by researching it or finding a seminar on how it all works. Find out if your employer offers any kind of flexible spending account and look into a dependent care tax credit if you are providing hands-on care," says McVicker. If your parent is a veteran, look into any benefits they might receive. McVicker suggests investigating the State Health Insurance Assistance Plan (SHIP) for financial help and seeing if mom or dad is qualified for benefits under the Program of All-Inclusive Care for the Elderly (PACE).
Housing and health care are some of the largest financial pressures, so making sure you look into insurance coverage, prescription coverage, and health care plans will help you save money. Long-term care insurance is a great option, but it's best done sooner instead of later. “If you wait too long, it gets too expensive or there could be some complications that disqualify you," says McVicker.
If your parents are living at home and need assistance, there are other options available that will help reduce their costs. You can sign them up for Meals on Wheels and check with their physician's office and with local senior centers or a Council on Aging to see if they qualify for any kind of housecleaning, personal care, or physical assistance.
Talking about financing your parents' later years is a tough conversation, but it's actually very proactive. “Families in crisis, even good families, can become dysfunctional," says McVicker, because kids might have to guess at what mom or dad might want and not know how to pay for it. And it can cost heaps of money – enough, says McVicker, to derail the retirement of both generations – the parent and the adult children.