Research shows that 1 in 4 adults over the age of 65 has medical expenses that can bring them to the brink of bankruptcy. That type of financial burden impacted 7 million senior citizens in the United States in 2007. Even if your parents are healthy now, an unforeseen crisis can quickly escalate into medical debt that they cannot escape especially if they are retired.
Hospital bills are often the largest bulk of these bills, but other expenses can add up too, including items like nursing care or home adaptations. When planning for retirement, people do not always consider future health concerns like a debilitating illness or physical impairment. Your parents may not have enough for the high cost of their future needs.
A home care provider survey found that among people aged 40 or more, “84% have nothing saved for their parents’ future should they need it,” even though many would pay their parent’s expenses. You can help protect your family by planning for your parents’ financial future today.
Talking About Medical Expenses
The first step is sitting down and having a conversation with your parents about planning their future. This may be difficult for you as well as for them but it is a necessary step. Set aside time to discuss this without other distractions, whether it’s in person, by conference call, or via video chat.
As you prepare for your meeting, keep in mind that you and your parents will be changing roles as you plan to care for them. Be sensitive to their feelings but do not avoid this conversation. Stephen D. Forman of Long-term Care Associates, Inc. says that “45% of older adults (55+) have $10,000 or less saved for retirement.” This could be your family!
Your first discussion is to get an idea of where they are with their long-term planning and what their desires are, including:
- Future living arrangements. They may want to remain in their home as long as possible, but they must be prepared should they require daily care or nursing services.
- Critical documents. Discuss where insurance contracts, mortgage papers, wills, and other legal documents are and ask to view them.
- Current plans, assets, and debt. You want to find out if they have already made investments on arrangements like a burial plot, own assets such as a gold IRA or owe a sizable debt.
- End of life arrangements. End of life preparation is a necessary piece to add to your discussion. Talking with them about their final wishes may be difficult but it can bring them peace about the future.
Finally, understand your place in this plan. Do you live close enough to care for them? Are you willing to be their executor or have power of attorney in place?
Research and Financial Planning
Once you have an idea of what your parents want and where they stand right now, start your research. This will involve getting an idea of costs, liability, insurance coverage, and more. You may need to do a little legwork contacting and visiting local facilities.
- Nursing Homes and Long Term Care Facilities: These should be inspected personally to get a feel for their care capabilities, staffing personalities, and cleanliness as well as the well-being of their residents. Find out what type of activities and outings they have available as well as how they address your parents’ requirements, such as faith-based services and visiting policies.
With the 2020 crisis of COVID-19, many of these facilities were hard hit. You should inquire about what preventative measures and steps the administration has taken to deal with the pandemic and how they are protecting residents from getting sick. It’s also a good idea to research what lockdown measure they take and how it will impact your ability to visit your parents.
- Aging In Place: Your parents will likely want to remain in their home and if they can, that is a good choice. In that case, you may want to investigate what kind of nearby care services are available to them such as home nursing care. Look for a local vendor that can make accessibility adaptations in the event they lose mobility. This may be a difficult choice if they live in a two-story home.
A great deal of technology is available to help your age in place. For example, a device like a doorbell camera can not only help them see who is visiting or delivering items, it can also alert the authorities if a suspicious person is lurking around their home or stealing items at the front door. Other smart home gadgets that can keep your parents safe include gadgets that turn off your stove, dispense medication, and help turn on the lights.
- Funding Assisted Living and Long-Term Care: The costs of these facilities and services can be steep so you need to investigate different assisted living funding options, such as long-term care insurance or life insurance. Future loan options can include a bridge loan or reverse mortgage if they own a home. Additionally, federal assisted living grants and Medicaid may be available in your state, or your parents may have veteran benefits that can help.
- LGBTQ+ and Long-Term Care: The LGBTQ+ community may face discrimination and/or less access to healthcare and funding in this area. Seniors in this group also share an increased risk of mental health problems or specific physical problems such as HIV, AIDS, or body image issues. Despite the legalization of same-sex marriages, estate planning can still be difficult to navigate so you may want to employ an attorney or financial planner with expertise in this area.
Preparing for your parent’s future medical expenses provides financial relief in times of medical crisis. This is a savvy and achievable goal that can bring peace of mind to you and your family.
Updated: February 5, 2021