Why You Might Be Responsible For Paying Your Parents’ Medical Debts

By Kelly Phillips Erb, Forbes Staff, Forbes.com, April 27, 2024

In her five years as a Democratic member of Pennsylvania’s State House, Kristine Howard has fought for gun control, abortion rights, environmental protections and greater funding for public education. But this year, after the death of a colleague, Anthony M. DeLuca Sr., she took up his decade-long crusade to change an obscure state law under the provocative bill title: “Stop Bankrupting Pennsylvanians Over Family Medical Bills” Act.

The law Howard is seeking to change is Pennsylvania’s “filial support” law–a concept dating to colonial days, with the current version written into state law in 1937. It makes those with financial means legally responsible for nursing home, medical and other bills of destitute family members, including aging parents, adult children and a spouse.

“It can be a rude awakening for many people,” says Howard, a 62-year old lawyer representing Chester County in eastern Pennsylvania.

More than half the states and Puerto Rico have such laws on the books, though most of them are what Katherine C. Pearson, an elder law expert and law professor at Pennsylvania State University, refers to as “scarecrow” laws. That means they’re rarely enforced but left in the state code as a warning—in this case, to those who might consider shirking familial responsibility, whether it’s helping to pay parents’ bills or providing hands on care themselves. (An estimated 42 million Americans, the largest group of them women in their 50s, but increasingly men and younger folks too, provide caregiving to aging relatives.)

Two significant Pennsylvania cases, combined with the rising costs of long term care nationwide and yawning gaps in coverage for that care, show that these scarecrow laws can turn into a live threat–and not just to Pennsylvanians.

The Keystone state’s law, which provides an exemption if your parents abandoned you for 10 years or more while you were a child–but no break for adult estrangement–gained new relevance in 2012. That’s when the Pennsylvania Superior Court held John Pittas liable for his mother’s full $93,000 unpaid nursing home bill (resulting from a car accident), after she’d moved to Greece to live with two of her other children.

In 2019, the Pennsylvania Supreme Court ruled that a Princeton, N.J. couple could be held liable for an unpaid $205,000 bill for the care of their severely disabled adult son at Melmark, a residential care facility in Delaware County, Pennsylvania. (New Jersey had been paying the tab, but stopped paying because it wanted him moved to a cheaper New Jersey facility. The couple wouldn’t have been liable under New Jersey law, but Pennsylvania’s high court decided it could hit the parents with Pennsylvania’s harsher rules.)

There’s no uniformity in the filial laws. While in Pennsylvania, the potential hit is wholly financial (including a possible lien on your property), in some states failure to support a parent can be prosecuted as a criminal offense. Massachusetts’ law, written in 1915, imposes a fine of up to $200 and a prison term of up to one year (or both) for “neglect or refusal to support a parent.”

“Most adult children do undertake responsibilities for their parents as they age… They do this without laws obligating them to do so, thank goodness.”

North Carolina’s law, which has been in its current form since 1955, makes it a misdemeanor–which could result in jail time–for a person to “without reasonable cause, neglect to maintain or support his or her parent or parents, if such parent or parents be sick or not able to work and have not sufficient means or ability to maintain or support themselves.” The law is still on the books, though recent history suggests it is not often enforced. Ditto in Kentucky.

Even in states where there hasn’t been an appetite to enforce filial support laws, there also hasn’t been much movement to repeal them. Economics–and that desired scarecrow effect—are likely the primary reasons.

While the federal Medicare program pays for the majority of medical care for those over 65, it does not–despite what many middle class Baby Boomers think–cover long term custodial care. The confusion over Medicare stems from the fact that the federal program will pay for up to 100 days of rehabilitation in a skilled nursing care facility (after a three-day hospital stay) and some skilled nursing or physical therapists visits at home, but not for custodial care–the kind of help with activities of daily living (such as bathing, dressing and eating) a majority of elders end up needing either in a nursing home or their own or their children’s home.

It’s hard to predict whether any one individual will need extended long term care support–about four in ten of today’s 65-year-olds won’t need such care at all, but more than 20% of Boomers will need five or more years of care. The cost of nursing home care varies based on geography and level of care, but it’s steep: on average, a semi-private room in a nursing home runs around $8,669 per month, while a private room will cost you $9,733 per month, according to Genworth’s annual Cost of Care survey. Home health care aides now average $33 per hour, with homemaker services running at $30 an hour, the survey found.

At those rates, many seniors who need years of care will run out of money. Private long term care insurance isn’t much of an option these days—a raft of carriers have stopped selling the policies because the risk is so high and healthy consumers aren’t buying policies because they fear premium increases. (The Obama Administration killed plans for a voluntary public insurance program after concluding that premiums in them would be unaffordable for most people.)

That is where Medicaid, a joint federal-state program, comes in. It is primarily geared toward low-income families, but picks up long term care costs for elderly once-middle class folks who have exhausted their assets.

The eligibility standards vary from state to state—in Pennsylvania, in 2024, a single nursing home Medicaid applicant must have income under $2,829 per month and assets under $2,000 (not a typo). Assets include stocks, bonds, investments, and bank accounts—and your IRA or 401(k) (fortunately, however, the retirement accounts of a non-applicant spouse are exempt). Assets that aren’t included are personal belongings, your vehicle, irrevocable burial reserves (up to 25% of the average cost of burial in one’s area), and often, your primary home. 
The State of New York is a bit more generous when it comes to assets. While your income must be under $1,732 monthly, you can retain assets of up to $30,182. Unlike in Pennsylvania, New York exempts your IRA and 401(k) plans if they are in payout status, meaning that you’re taking required minimum distributions (RMDs).

Bottom line: to afford years of long term care, you typically need to be wealthy enough to cover costs out of your savings, or needy enough to qualify for government assistance.

Some seniors plan to get to the “needy” level by giving assets away. Done right, and early enough, with professional help, Medicaid planning works, says Carolyn Rosenblatt, a California lawyer and nurse (and Forbes contributor) who advises families on elder issues.

But the government has tough rules to discourage last minute maneuvers; when someone applies for Medicaid long-term care coverage, the government looks back at any asset transfers the applicant (or the applicant’s spouse) has made during the lookback period, typically 60 months. The government can deny coverage for an extended period based on the amount transferred and the cost of care and rules in each state. So, for example, Pennsylvania’s lookback rate is currently $11,548 per month. If you gave away $100,000 within the lookback window, you would be ineligible for almost 9 months. And there’s no time limit here–if you gave away $2 million, you’d be ineligible for 173 months. (As a practical matter, that would mean you’d have to wait five years after the transfer to apply at all.)

If an elder enters a nursing home, runs through his money, and then is found ineligible for Medicaid, a nursing home’s best bet is to come after the children with a filial suit (or more commonly, a threat of one) to cover the cost of care. The other alternative is eviction–not a terrific option when 24-hour-a-day care may be needed and no other nursing home will take a prospective resident with neither assets nor Medicaid coverage.

The Medicaid look-back rules might seem fair to taxpayers, who after all, pay the cost of the program. But filial laws are separate from Medicaid planning, good or bad. In Pennsylvania, for example, it doesn’t matter whether an adult child has received a penny of assets from his broke parent—only that the child has the financial resources to pick up unpaid bills. An ailing, aging parent could give all his money to Child A, who gambles it away and ends up busted. Then, if that parent is denied Medicaid because of the transfer, the nursing home could come after Child B, who got nothing from the parent, but has money in the bank because he works hard and saves.

That is where Pennsylvania State Rep Howard and her “Stop Bankrupting Pennsylvanians Over Family Medical Bills” Act comes in.

The bill would not repeal filial laws but would tweak them in a way that she thinks sounds fairer. Howard said it would modernize the law “to ensure spouses, children, and parents are only held liable for outstanding medical bills if the indigent individual has colluded with the family member to hide assets within the past five years, or if the family member fails to cooperate in the Medical Assistance process.” In other words, it would copy the Medicaid look-back process–kids would be on the hook if parents had recently transferred assets to them, but couldn’t be legally forced to cough up money they’d earned on their own to pay for their aging parents.

Law professor Pearson, no fan of filial laws, has worked for years to protect elders from financial exploitation. She observes she has “often heard from older parents who express worry about the possibility of ‘the government’ imposing a burden on their children,’’ but “has never heard one say they are relying on `the law’ to make their children do their duty.”

“Most adult children do undertake responsibilities for their parents as they age and especially if their parents’ abilities wane,’’ she adds. “They do this because it is the right thing to do. They do this without laws obligating them to do so, thank goodness.”