If you’re paying your parents’ bills, don’t overlook these sources of money and tax breaks.
• Medicaid. Medicare provides only limited coverage for skilled nursing or rehabilitation services after a hospital stay. It doesn’t cover custodial care, such as help with bathing, dressing and eating, which people with Alzheimer’s and other debilitating illnesses need.
Medicaid covers custodial care in Medicaid-eligible long-term-care facilities. In some states, it will also cover home health care. The catch is that your parents must be practically impoverished to qualify. State laws differ, but in general, your parent can’t have more than $2,000 in countable assets, including investments. A spouse who lives at home can usually keep up to $115,920, along with the home, car and assets in certain kinds of trusts (for more information about eligibility in your state, go tomedicaid.gov). If your parents want to preserve some assets by giving them to you or your siblings, they usually must do so more than five years before applying for Medicaid.
If your parents have a long-term-care insurance policy that qualifies for a state partnership program, they may be able to protect more of their assets. For example, if your mother has a partnership-eligible policy that covers a total of $200,000 in care, she can qualify for Medicaid after exhausting the policy’s benefits but still keep $200,000 in assets. For more information, go to longtermcare.gov.
• Help for veterans. Did your parent serve in World War II, the Korean or Vietnam conflicts, or the Persian Gulf War? He or she may be eligible for a little-known U.S. Department of Veterans Affairs program known as the Aid and Attendance benefit. This benefit can provide up to about $2,000 a month toward the cost of home health care, a nursing home or assisted living. Spouses of veterans also may qualify.
The program is income-based. In general, an applicant must have less than $80,000 in assets, excluding a home and vehicle. Veterans with more assets may qualify if they have large unreimbursed medical costs, says Debbie Burak, founder of veteranaid.org, a website that provides information about the program.
If you believe your parents are eligible, be persistent. Only three VA processing centers handle A&A applications, Burak says, so it’s important to mail your application to the right place (you can find those locations, and lots of other information, on Burak’s website). Make sure you provide all of the required documents and obtain a return receipt for all correspondence, Burak says. The claims process can take several months, but if you’re approved, benefits are retroactive to the day you filed.Sandra Block is a senior associate editor at Kiplinger’s Personal Finance magazine. Send your questions and comments to firstname.lastname@example.org. And for more on this and similar money topics, visit Kiplinger.com.