When aging parents lack health insurance

Elderly woman and doctor
  • Poor, aging parents may be tempted to go without Medicare supplement insurance.
  • A physician or attorney might help adult children have a "money talk" with parents.
  • A professional geriatric case manager can help get what's needed for Mom and Dad.

A hospital waiting room is a lousy place to discover that Mom and Dad are broke.

Unfortunately, a parent's health crisis often provides the first warning sign that the folks have made a major financial blunder by dropping or downgrading their Medicare supplement health insurance to save money.

"In a lot of cases, this comes up at the last minute when a parent suddenly needs care and there's a lot of running around. When you throw dementia into it, it becomes even harder," says Jim Sullivan, a CPA and personal financial specialist in Naperville, Ill., who specializes in retirement planning. "That should never be an emergency meeting."

Medicare doesn't cover everything, and Medicare supplement insurance -- also known as Medigap insurance -- fills the gap. The most popular plans can be expensive for seniors, costing thousands of dollars a year, according to the U.S. Department of Health and Human Services. As a result, Sullivan is seeing a lot of emergency room family meetings these days.

One of his clients dropped a Medicare supplement to save money just months before undergoing emergency heart surgery and could not afford the resulting $15,000 in deductibles and co-pays the policy would have covered. Another client "saved" money by choosing a Medicare supplement that does not cover co-pays for stays in a skilled nursing facility, leaving her on the hook for $145 per day in deductibles for a 50-day stay.

Had the kids known what their parents were up to, they might have stepped in, sought guidance, and even helped pay the supplement premiums to keep Mom and Dad on the right path.

But that would have required having the dreaded "money talk."

Take on 'the talk'

"It's easier to talk to your parents about sex than it is about money," says Kathleen Kelly, executive director of the Family Caregiver Alliance, a nonprofit support group. "It makes several presumptions -- about earning and worth, about decline, even about motivation -- that nobody really wants to think about."

Sally Hurme, AARP senior project manager in education and outreach, says making the necessary role reversal is uncomfortable for both parties.

"As parents, you make sure that your kids are on sound financial ground and may even step in when they struggle financially," she says. "How do you put that shoe on the other foot?"

Many of us are about to find out. According to AARP, roughly 30 million American households are providing care for an adult over age 50, a number that is expected to double over the next 25 years.

Here are some gentle ways to ease into the money talk with your parents.

  • Seek their help. Your senior parents likely know more about Medicare and long-term care planning than you do. Why not ask for a tutorial? "It brings it up in a natural way," says Kelly.
  • Use current events. Headlines in the news and upcoming Medicare open enrollment seasons can be a good opportunity to draw Mom and Dad out regarding their health insurance coverage. "When open season comes, help your parents do the comparative shopping because there are lots of options," says Hurme.



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