Handling a nursing home
The health of an elderly parent falters and fails, a home for decades gives way to a hospital room and suddenly the longtime source of family unity and strength can't even live alone anymore. That's a family challenge that often sends adult children to a financial adviser for help.
One family found that the answer involved a gutsy approach to knowing when and how to complain.
For a woman in her late 80s and her four grown kids, the situation began some five years ago with Mom's back surgery, recalls adviser Wendy Spencer of Spencer Capital Strategies in Arvada, Colo. "Mom goes home then has spasms and pain, and her daughters took her to the hospital."
Bad enough a family must deal with sheets of new medications and how suddenly a pillar of their lives needs "looking after." Spencer's clients also soon ran afoul of arcane funding rules for health care.
The family, for instance, planned to handle elder-care expenses; the long-widowed mom also carried long-term care insurance. When she came in for back spasms, though, the hospital admitted her only for observation before sending her straight to a nursing home -- a distinction that ordinarily nullifies Medicare's paying for the first 30 days of a nursing home.
Such residences in Spencer's area cost about $210 to $220 a day. This one also came with physical and occupational therapy. That didn't soothe Mom's patience.
"She was ticked off," Spencer says. "Every time when I'd visit, she'd talk about all the residents who fell out of bed each night. I got the impression people who came to visit her brought her stuff from restaurants because she said the food sucked."
Mom also worked her tail off and "pestered" every therapist to show she was ready to head home. One kid took in Mom's dog. One daughter also badgered the hospital to somehow get Medicaid to pay for the first month of the home.
One nagging concern: Though Mom never did eventually apply for the government coverage, Medicaid runs a look back period and only pays for a nursing home after an individual runs out of money and exhausts such resources as a long-term care insurance policy (which the mom had had for some eight years).
In a look back, Medicaid, if ever needed in this case, would try to find any instances of Mom misdirecting or trying to hide money.
"That is what the big panic was about: that by making gifts, Mom could have shot herself in the financial foot," says Spencer, who showed the daughter scenarios of a potential five-year look back and asked if the mom had in fact given away money.
"Medicaid rules often conflict with estate planning and tax regulations," Spencer says. "You almost need a cheat sheet to navigate the thicket between the various regulations, almost all of which are piecemeal and are enacted to achieve very different and often conflicting purposes."
True, few relying on government insurance have private fortunes to give away, but even a sprinkling of gifts in the low thousands of dollars can trigger red flags and turn off funding.
"Turns out she had given away quite a bit of money, loans of $5,000 and $10,000 to one of her three daughters," Spencer says. "I guess you get old and feel you have more money than some of your kids, I think you feel kind of sorry for them."
After 40 days in the home, the mom did not feel sorry for her therapists and certainly not for herself. "Some people just give up and wallow. She got better," says Spencer, "put her foot down, pitched a fit and was able to go home."
Not all trips to nursing homes are one-way -- Medicaid's new Money Follows the Person program helped more than 40,000 people relocate back into communities in recent years -- but emotional fallout still settles in. "I think she was a little bit pissed at [her kids]," Spencer says. "Later, she thanked them."
Mom came home, reunited with her dog and settled back into her life after glimpsing what for many is a final residence. "She doesn't talk about it much," Spencer says. "I think she'd just as soon forget about it."