NCPA - National Center for Policy Analysis


July 12, 2005

Less than one-third of older Americans are able to pay for two or three years of nursing home care, according to a recent study published by AARP. As baby boomers who have failed to adequately prepare for old age retire, there will be fewer seniors with the means to pay for such care says legal researcher Matthew Pakula.

Medicaid, the joint federal-state health care program for the poor, is the major funder of long-term care in the United States. For example, when seniors in nursing homes exhaust limited Medicare benefits, those who have not purchased long-term care insurance must pay for their care themselves. If they consume their financial assets and their incomes are low enough, they qualify for Medicaid coverage.

  • Long-term care cost Medicaid $60 billion in 2002, according to Centers for Medicare and Medicaid Services data.
  • Federal and state laws allow Medicaid to seek reimbursement from recipients' estates, and under current laws the states now collect $350 million a year, according to the AARP.

Unfortunately, most Medicaid recipients have no estate when they die, and an increasing proportion of those who receive assistance are sheltering their financial assets to meet the definition of poor under the Medicaid statutes. So while their children receive the benefit of these assets, taxpayers pick up the tab for their care, says Pakula.

More than 30 states have statutes that make adult children responsible for the care of indigent elderly parents, but the laws are seldom enforced. Enforcement of filial responsibility statutes could discourage much of this asset shifting, says Pakula.

Source: Matthew Pakula, "The Legal Responsibility of Adult Children to Care for Indigent Parents," National Center for Policy Analysis, Brief Analysis Nor. 521, July 12, 2005.

For text:


Browse more articles on Health Issues