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After their mother's stroke, Patricia and her brother Tom toured skilled nursing facilities, chose the one that felt right, and signed the admission paperwork. The immediate crisis was over. Their mother was safe. They allowed themselves, briefly, to exhale.
Two weeks later, the care team told them their mother could not safely return home. Medicare would not cover the long-term care she now needed. The family had never discussed how they would pay for it. They spent weeks looking for the long-term care insurance policy their mother had bought years earlier, which was buried in a filing cabinet. It covered the situation. The ending was manageable. The weeks of worry were avoidable.
This is an illustrative story, not a report of a specific family.
I have spent 34 years in long-term care, beginning as a social worker and admissions director in skilled nursing facilities, and now working on the technology side. I have seen families face this financial surprise again and again. Many do not lose money because they made a bad choice. They lose options because no one discussed the money while there was still time to plan.
As a financial advisor, you may be the one person at the table who can start that conversation.
What No One Wants to Talk About
Families often put it off. Talking about money with aging parents touches on mortality, independence, and family dynamics. A hospital discharge is a difficult time to learn what a policy covers — or whether one even exists. A financial advisor may already have a reason to bring the family together, a record of the client's finances, and a relationship that predates the emergency.
The conversation does not require a financial plan. It can start with an inventory:
- Is there a long-term care insurance policy, and where is it?
- What are the main assets and monthly income sources?
- Is there a will, power of attorney, and health care directive?
- Who are the financial and legal advisors?
- Where are the important documents kept?
- If care became necessary, what could realistically be paid for, and for how long?
No one has to answer everything in one sitting. The insurance policy question alone can change a family's options. Older adults may still have coverage they bought years ago and rarely discuss. Adult children may not know it exists. Group coverage through a former employer, premium payments shown in bank statements, and letters from insurance companies are all worth checking for.
Options Narrow Over Time
Time changes the available choices. Medicare generally does not pay for long-term custodial care, though it may cover qualifying short-term skilled nursing care. Medicaid is the nation's primary payer for long-term care services. Eligibility and covered services vary by state.
For long-term services and supports, Medicaid may also impose a penalty when an applicant has transferred assets for less than fair market value during the five years before applying. Planning well in advance with a qualified elder law attorney can help a family understand its options.
Families can pay for long-term care privately, and the options may be broader earlier in the process. Home equity may be part of the discussion. Some life insurance policies and annuity contracts have long-term care benefits or riders, though the terms and costs vary.
Qualified veterans and survivors may also be eligible for VA Aid and Attendance benefits, which the Department of Veterans Affairs adds to a monthly pension. Families can miss these options if no one raises them.
A family that starts discussing assets years before a placement is needed may have more flexibility than one that starts during the week of admission. I am not a financial planner or an attorney, and nothing here replaces specific advice about an individual situation. However, in my experience, families carry less regret about the money when they have talked about it early, while they still have time to make choices.
The bill for care comes either way. Families who see it coming have more say in how they meet it.
Cory Fosco is the author of “The Question of When: A Practical Guide to Knowing When It's Time for Assisted Living, Memory Care, or Skilled Nursing” and publisher of Campion Hall Press LLC. He has spent 34 years in long-term care as a social worker, admissions director, and healthcare executive. A free one-page checklist families can use to recognize when a loved one may need more help is at https://coryfosco.com/resources/four-signal-categories-checklist/ Cory also can be reached at [email protected].
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.