When you were a child, your parents took care of your healthcare needs — from scheduling doctor appointments to filling your prescriptions. Now that you’re grown, the roles may reverse, and you may need to take control of your parents’ medical care.
Caring for aging parents can be emotionally overwhelming, but the financial component does not need to be. By creating a plan as soon as possible, both you and your parents will have comfort in knowing that they can receive the care they need without wondering how it will be paid for.
Here are a few tips to prepare for your parents’ future medical care:
- Discuss the topic with your parents. It is important to have “the talk” with your parents, no matter how uncomfortable it may be. You need to understand their health and their finances. Will they have their own insurance? Are they eligible for Medicare? What retirement savings accounts do they have, and can they be tapped for healthcare costs? You also need to discuss what they would like to do in the event they cannot care for themselves. Assisted living, nursing homes and in-home care all have costs associated with them, and some can be covered by careful planning. It is important to ensure that all family members take part in this discussion. Involve all siblings to eliminate potential family issues or conflicting opinions.
- Evaluate long-term care insurance. It is very likely your parents will need some form of long-term care. Long-term care insurance can cover items such as the cost of a nursing home as well as a home health aide to help your parents with daily activities they might struggle with alone. It can be added now to a life insurance policy as a rider or linked benefit to help prepare for the future.
- Prepare for worst-case scenarios. Ensure your parents have all the necessary estate planning documents, such as a current durable power of attorney, a health care power of attorney and a living will/terminal care directive. These documents can name a family member to make decisions during periods of incapacity.
- Evaluate your finances. In the case of a major medical emergency, are you able to help your parents? Determine how much you are willing to spend out of pocket and ask your employer if your benefits package could provide any assistance.
- Create a plan. With a good understanding of your parents’ healthcare situation and financial resources, and with decisions about how much financial help you are willing to contribute, you can begin to align needs and resources. Decide which financial resources will be used to cover specific healthcare needs. Outline actions that need to be taken, and by when. Then, assign responsibilities for completing those actions.
- Work with a financial planner. When addressing each of these items, emotions can run high. A financial planner can be an objective third party who provides unique expertise to help. They will look at your holistic financial picture and make recommendations to ensure that your parents’ health will be taken care of as they grow older.
A medical emergency is a stressful event, especially if it is experienced by a parent. By planning far in advance, you can avoid causing a financial hardship. Consult a CERTIFIED FINANCIAL PLANNER™ professional to better understand what steps you can take to prepare for your parents' future medical expenses. Visit Letsmakeaplan.org to locate CFP® professionals near you or your parents.