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A New Financial Risk Every Family Needs to Be Aware of Now

In 2019, Robyn King had to move her mother — who was suffering from Alzheimer’s — into a nursing home. 

It wasn’t a choice she was eager to make. However, with rates of dementia and other debilitating end-of-life diseases rising, it’s becoming all too common for many families.

Robyn rightfully expected it to be a difficult transition. But it turned out the most traumatic aspect of the experience had nothing to do with the move itself. It wasn’t even being unable to visit her mother for several months as the COVID-19 pandemic erupted in early 2020.

Instead, the worst part of the experience was the letter she received the following October — just two days before her mother passed away — that said the nursing home was suing her for nearly $80,000. 

In short, a portion of her mom’s care had been paid for by Social Security, with the balance covered by Medicaid. 

However, her mother’s Medicaid approval had unknowingly lapsed several months prior. And since her mom didn’t have any additional assets to pay the balance, the facility then set its sights on Robyn — who had filled out the admissions paperwork on behalf of her mother — to collect the balance. 

Robyn was ultimately able to connect with a pro-bono legal firm that helped to free her from this situation. But a recent report from the Consumer Financial Protection Bureau suggests her predicament isn’t uncommon. Earlier this year, she shared her story with the U.S. Senate banking committee. 

Nursing homes are increasingly going after children and family members of residents who are unable to pay. And not every story has a similarly happy ending. 

So, if you or a family member are considering a move to this type of facility, you must be aware of this risk. 

Fortunately, this is a situation where a little knowledge and vigilance can make a huge difference. 

You see, federal law and regulations already prohibit nursing homes from requiring a resident’s family or friends to guarantee a resident’s cost of care. In fact, they’re technically not even allowed to request it. 

However, some nursing homes still include these guarantees in the documents they require friends or family members to sign before their loved one is admitted. 

These “admissions agreements” are often long and full of difficult-to-understand legal terminology. Even worse, caregivers are frequently asked to sign these documents at times of emotional distress with little to no discussion or explanation.

As a result, most people end up signing these documents without fully understanding everything they’re agreeing to. And while these guarantees often don’t stand up in a court of law, many folks don’t have the means to fight back.

So, the most important things you can do to protect yourself or your family from this financial risk are remarkably straightforward: 

  • Never sign ANYTHING — even supposedly “routine paperwork” — until you can read it carefully and in full.
  • If you don’t understand any portion of a document, don’t hesitate to seek assistance from a third party or a legal professional if necessary.
  • And, of course, if you disagree with the terms in any document, DON’T SIGN IT. Request the terms be changed or seek out another facility.

Moving a loved one to a nursing home or long-term care facility will always be difficult. But keeping these simple guidelines in mind will help ensure it isn’t even more challenging than it needs to be.

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