A Pennsylvania state legislator is trying to amend the state’s filial responsibility law, which compels adult children or family members to pay for medical bills when a patient passes away or can’t afford their long-term care.
State Rep. Kristine Howard (D-Malvern) introduced H.B. 2094, which would restrict corporate nursing homes’ legal right to sue the children of patients for outstanding medical bills. In a March memo, Howard wrote that in enforcing the law, Pennsylvania’s “outlier status is shameful.”
“While [filial laws] have generally fallen out of favor elsewhere, Pennsylvania stands as the only state to have enforced its filial responsibility law in the past 25 years,” Howard wrote. “Given that Pennsylvania nursing homes average a cost of nearly $400 per day, this can quickly lead to bankruptcies.”
‘Scarecrow’ Laws Resurrected
Filial laws are modeled after the Elizabethan Poor Laws of 1601, which obligated adult children to care for vulnerable parents to the best of their ability.
“Clearly, there is a societal good that comes from caring for one’s parents in much the same way there is a good emanating from marriage and care for children,” said Matt Dean, senior fellow in health care policy at The Heartland Institute, which publishes Health Care News.
“The duty to care is imposed upon parents not just as a moral tradition and perceived virtue, but as a legal obligation, enforceable by the courts,” said Dean. “Both parents are legally bound to care for their child until adulthood. The concept of reciprocity holds that the debt owed to parents for raising them from a baby is due to them when they, like the child they raised, become vulnerable and no longer able to care for themselves.”
But today, filial laws enacted in approximately half of the states are rarely used and exist mainly as ‘scarecrow’ legislation to deter parents from transferring money to children to shield it from their financial obligations to a care facility, said Dean.
Closing States’ Financial Gaps
In 2012, in Health Care & Retirement Corporation of America v. Pittas, the Pennsylvania Superior Court ruled in favor of corporate nursing homes holding children accountable for their parents’ unpaid bills.
Such laws could make a comeback in other states, says Stephen Moses, president of the Center for Long-Term Care Reform and a visiting fellow at the Paragon Health Institute.
“It could be that states will get so desperate, they may start using their filial responsibility rules to close [financial] gaps,” said Moses. “As it is harder for state and federal governments to close their budgetary gaps, we may see more filial responsibility.”
Long-term-care Tax
Some state governments also use filial responsibility to promote payroll taxes for state-run long-term care (LTC) plans.
“It becomes a way to sow discord and confusion and convince people to give up their personal freedom and compel them by the government to pay into a system,” said Moses.
In November, Washington state voters will decide whether to repeal a mandatory payroll tax for LTC. (See related article, page 1)
Entitlements Under Pressure
Medicaid has been a primary source of funding for long-term care. Legal professionals counsel families on how they can shelter assets to qualify for Medicaid. But as state Medicaid budgets crack at the seams, filial laws could keep those programs afloat.
Medicare is also under a great deal of financial pressure, says Terry Nager, founder of Plan for America, a proposal to privatize entitlement programs.
“In about 10 years, the [government] trust funds [for Medicare] will be empty, but the reality is they are already empty,” said Nager.
“The one thing we won’t see as much of [in the future] is the government being able to borrow and spend and throw money at problems,” said Moses. “We’re already seeing the excessive government spending and consumers having to pay, not through honest upfront taxes, but through inflation.”
Middle-Class Burden
“When courts can decide who should pay, there is a hefty and unfair burden placed on the middle class,” said Dean. “Wealthy families have the ability to shield income and wealth as well as pay for LTC with insurance or self-insurance.
“Low-income folks depend on Medicaid and rarely have the resources to pay, and what little they have is not worth the time of the legal folks at the state or the care center,” said Dean. “Middle-income families, however, do pay at least a portion of the costs and can have assets attractive to their dead or indigent parent’s bill collectors.”
Surprise medical bills from nursing homes can be financially devastating, Dean said.
“While we all have an obligation to cover our expenses, including skilled care expenses, the cost burden should not fall disproportionately on middle-income families trying to raise children of their own,” Dean said.
Case for Privatization
Plan for America is a contractual trust created by the federal government and the states into which individual payroll taxes and other earnings could be placed, guaranteeing lifetime health care and retirement income, reducing the need for filial laws.
According to the plan’s authors, the trust could eliminate more than $100 trillion in estimated unfunded liabilities of the entitlement programs between 2059 and 2079.
“The ideal solution is a constitutional amendment, but that could take 30 years so that’s not practical,” said Nager. “We believe the hybrid solution is a contract, among the federal government, the 50 states and a trust, which we call the For America and Security Trust, representing the interest of the people.”
Ashley Bateman (bateman.ae@googlemail.com) writes from Virginia.
