This question is often not considered until mom or dad is already in a long-term care facility or will be in need of such a facility in the very near future. At that point options are very limited. I often hear people talk about nursing homes and their experience with long-term care facilities of that kind when we sit down to prepare their estate plans. A majority of the time I hear the same or similar comments from people: "I don't want the nursing home to take my house away" or "I don't want them (the nursing home) to take all my money." The next comment relates to who told them or how they came to understand that the nursing home would "take their house." This idea either came from neighbors, friends, etc. or they believed they experienced it when their own parents required nursing home care. Now I am not sure what actually happened in some of those cases, since I was not personally involved, but I'm pretty sure that the nursing home did not literally take the person's house away. The nursing home likely required payment for the long-term care services it was providing, so in many cases that may have led to the sale of someone's home in order to pay the bills.
The reality is that long-term care is expensive, people are living longer, and the need for long-term care services will continue to increase. So the question of who will pay for long-term care should be a more immediate concern for everyone. The Elder Law Prof Blog had a post last month titled, Congressmen ask SSA to tell people Medicare does not cover long term care, that discussed one major area of misinformation on this topic. As the title indicates, Medicare generally does not cover long-term care. Professor Kim Dayton from William Mitchell College of Law mentioned the following from CQ HealthBeat in her post:
The statement currently says that Medicare provides some coverage for "nursing care," which the lawmakers wrote "creates an unnecessary risk that individuals will assume Medicare covers an extended stay in a nursing home, when in fact it does not." While Medicare covers care delivered in skilled nursing facilities for beneficiaries who require longer-term medical treatment, it does not pay for custodial care, such as assistance with eating, bathing and other daily living activities. A December 2006 AARP survey found that 59% of adults ages 45 and older overestimated Medicare coverage for long-term care (CQ HealthBeat, 8/9).
The time to ask this question is not in five or ten years or five minutes after you realize that mom or dad needs long-term care. The time to ask the question is now, while more options are available including long-term care insurance or long-term care specific planning. There is not a faster way to wipe out one's retirement assets or life savings than an extended stay in a long-term care facility without proper planning and without long-term care insurance.