Potential Trap - Paying for your parent's Nursing Home Care - You are NOT financially responsible in New Jersey
In New Jersey, by statute (NJSA 30:13-3.1) a Nursing Home may NOT require a guarantee from a third party to pay for a resident's nursing home care. They cannot require you, the child, to agree to pay for the nursing home as part of the admission of your loved one. However, some nursing homes find the law in this regard to be very inconvenient, and try to essentially dupe family members into paying for a loved ones care even though they are not legally responsible to do so.
NJSA 30:13-3.1 provides in relevant part that a Nursing Home may NOT":
"(2) require a third party guarantee of payment to the facility as a condition of admission or expedited admission to, or continued residence in, that facility; except that when an individual has legal access to a resident's income or resources available to pay for facility care pursuant to a durable power of attorney, order of guardianship or other valid document, the facility may require the individual to sign a contract to provide payment to the facility from the resident's income or resources without incurring personal financial liability."
However, I recently had a client a come to me whose mother had just been admitted to a nursing home. The mother was admitted directly from a hospital, and, as is common, the client was given a huge stack of papers to sign in order for mom to be admitted. The client did not really look at all the papers but to fill them out and turn them in - her sole motivation was obviously her mother's well being and "doing the right thing".
Luckily, the client's husband did read the paperwork. One of the paper's was labeled "Guarantee". This document stated that the "Responsible Party" - defined as the person who was signing the paperwork - agreed to be personally responsible for the nursing home costs. Here, as in most situations where a person is admitted to a nursing home directly from a hospital, the nursing home resident was incapable of signing the paperwork - hence, her daughter did so for her. Under the terms of the contract, the daughter became the "Responsible Party". If she had signed the Guarantee, the daughter would have been agreeing to pay for all of her mother's care, regardless of if the mother had assets or not. This is illegal, but if you aren't aware of your rights, you could be taken for money you don't have to pay.
The purpose of the Medicaid system is to pay for the long term health care of poor people. If the mother spent all of her money, Medicaid is designed and created to pay for her care. However, many nursing homes don't like dealing with Medicaid (though all are required to accept Medicaid patients in New Jersey), being that they get more revenue from private paying patients. This is not a charge against all nursing homes. It is however a "buyer beware". You need to know your rights in order to deal with this situation.
When I contacted the Nursing Home, they said that I misunderstood the "Guaranty", that is was just so that the resident agreed to pay for her care. This is not what the document said, it said my client was financially responsible. My client refused to sign it, and her mother was admitted in any event.
While my client was very appreciative of all we had done, I began to wonder how many other people had unknowingly signed the guarantee and were using their savings for their parents care when another financing source exists. The fact that this practice exists at all is an outrage.