Dear Penny: Do I Owe It to My Spendthrift Dad to Pay for Long-Term Care?

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Dear Penny,

You often get questions regarding the generation that is faced with their parents’ potential needs. I am amazed at how many people think they are responsible for their parents’ elder care costs or their parents’ debts. 

My father has always been irresponsible with money. Wine clubs, timeshares, a new car every five years and expensive vacations all contribute to his lack of financial stability. At 88, he still lives on his own, with a mortgage and zero savings. 

He thinks I am too frugal. I have never owned a new car and saved so that my children went through college debt-free. We have always had different priorities and opinions. It is kind of comical: I will invest in a Treasury bond and he loses money on bitcoin! 

My husband and I are saving now for our own retirement and elder care. There is no way I am paying for any of his elder care. And that means he will be in a not-so-nice place toward the end of his life. I have tried to get him to understand this while he can still save, but he is not interested in saving for a future he doesn’t want. 

That is the background; my specific question for you is in regard to the elderly who run out of money. There is always a Social Security payment and in my father’s case a disability insurance payment.

What happens when he can’t live alone and has to shop around for a nursing home or assisted living? Let's say he falls and the hospital won't release him until he has a place to go that is not on his own. How does he do that from his rehab bed? Am I right to think that he will go to whatever he can afford? Remember, he refuses to set anything up before a crisis.

— P.

Dear P.,

If your father needs nursing care, he’ll probably go to a facility that Medicaid pays for. That certainly isn’t unusual. Medicare generally doesn’t cover long-term care, so Medicaid, the federal-state program that helps low-income people pay for health care, kicks in. In fact, Medicaid is the primary payer for about 6 in 10 nursing home residents, according to the Kaiser Family Foundation.

I can’t tell you exactly what the discharge process will look like. But hospitals have social workers and other professionals who navigate the complexities of Medicaid every day.

Dear Penny

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I’m not going to make excuses for your father’s lifelong lack of financial discipline. But I also get where he’s coming from at this stage. At 88, he’s almost certainly too old to buy long-term care insurance. (These policies are often prohibitively expensive even for younger people.)

If he’s living primarily on Social Security, your father probably doesn’t have a lot of extra money to save. And any savings he could accumulate at this point would likely be wiped out by even a short stay in long-term care. That would essentially leave him in the same position, i.e., in a facility that accepts Medicaid. Most states don’t allow individual Medicaid beneficiaries to have more than $2,000 in assets, though a homestead residence and vehicle are typically exempt.

So where does that leave you? I agree with your decision not to pay for your father’s elder care or debts. Putting judgment about his poor decisions aside, it’s simply unrealistic for most families to pay for a loved one’s long-term care. Meanwhile, keep prioritizing your own retirement and long-term care savings so your children won’t have to worry about the issues you’re currently facing with your dad.

But that doesn’t mean you have to abandon him in a nursing home. You can still show your love for him by visiting and calling regularly, and making sure he’s receiving adequate care should he require extended care in a facility.

The odds of your dad changing his habits now are pretty much zilch. You’ve set your boundaries by deciding you won’t pay for his care. Your father knows how you feel. Now it’s time to accept his decisions, even though you don’t approve of them.

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Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].