What Every Adult Child Should Know About Their Parents' Medicare, Medicaid and Long-Term Care Options

Helping an aging parent manage new health challenges can be daunting for adult children. When the time comes, many of those adult children find themselves overwhelmed as they navigate Medicare, Medicaid and long-term care options.

These three resources are often misunderstood, and knowing the basics before a crisis can protect both parents and children.

What Medicare does and does not cover

Medicare is a valuable health insurance policy that can replace your company’s health insurance, and you can start accessing it at age 65. It's generally much more affordable than private insurers, but there are gaps. For instance, Medicare doesn’t tend to cover long-term care such as the cost of assisted living facilities. You typically need a separate long-term care insurance policy for that coverage.

That can often come as a surprise. More than half (58%) of respondents to the Nationwide Retirement Institute Long-Term Care survey released last year mistakenly think that Medicare will cover long-term care. And while Medicare can cover hospital care, doctor visits, prescriptions and limited skilled nursing care after a qualifying hospital stay, you’ll still likely face out-of-pocket costs, prescriptions and premiums.

If your older parents do not have Medicare set up yet, you should do some research and gather the necessary documents and login information so you are prepared in the event of a health emergency. It’s also important to have a Medicare card.

How Medicaid fits into long-term care planning

Medicaid can pay for long-term care in some cases, but coverage varies from state to state. Strict income and asset limits are a part of eligibility.

Take proactive measures by contacting the state Medicaid office or an elder law attorney to discuss next steps and whether it is possible for your older parents to qualify.

Long-term care options families should discuss

Older adults have several options for long-term care, and discussing them with your parents before it becomes necessary will make the transition easier. Aging at home lets older adults stay put, and adult day services can offer socialization. Assisted living, memory care for people with Alzheimer's, nursing homes and family caregiving are all viable options.

The right option depends on several factors, including your parents’ health and mobility, finances, housing and preferences.

It’s important for adult children to talk with their parents early, while they can still express what they want. That may include documenting key information, such as insurance details, doctors and passwords. The Eldercare Locator can be a good starting point.

Discussing options with your parents now helps ensure you don’t have to make rushed decisions in hospital hallways or under financial pressure. Your parents get more autonomy with their choices, and you have more time to map out which programs are worth considering.