Parents are not liable for medical debts of adult children on shared insurance

Nov 28 2017

Are parents responsible for adult children's medical debts? Should people squeeze in appointments and expensive procedures before year's end because of changes that might come with the GOP tax bill? Should consumers pay a broker to help them enroll in a plan? I answer these questions from readers this week.

Q: My 25-year-old brother died in April, and now hospitals are calling my parents to cover his bills. He was covered under my parents' employer-sponsored plan, but are they liable for his medical debt?

No, parents are not generally responsible for an adult child's medical debts, said Richard Gundling, senior vice president at the Healthcare Financial Management Association, an organization for finance professionals in health care.

"Normally, if you're 18 or older, you're considered the responsible party, even if you're insured under your parents' policy," Gundling said.

Under the Affordable Care Act, parents can keep their children up to age 26 on their insurance policy, even if the adult kids are financially independent and live on their own.

When young people turn 18, they can decide whether to receive medical care or check themselves into a hospital. Once there they typically would sign their own paperwork that says they consent to medical care and agree to pay any amounts that their insurer doesn't cover.

Generally, parents would be responsible for their adult child's debts only if they had signed an agreement with a medical provider to cover them.

The situation would be different if it were a minor child. Parents are generally responsible for those bills, Gundling said.

Q: As a 78-year-old person with multiple sclerosis, I have many out-of-pocket medical expenses that I deduct from my income taxes. I heard that the new tax bill would eliminate this deduction. I am facing approximately $9,000 in dental expenses, and I planned to delay this dental work until early 2018. But now I wonder if I should have it done before year's end. What's the timing of this change?

You're in a tough spot. Under current law, you can deduct from your income tax the amount of your medical expenses that exceeds 10 percent of your adjusted gross income. The big tax bill passed by the House earlier this month eliminated that deduction, effective in 2018. However, the Senate Finance Committee's bill, which is headed to the full Senate, did not change the current deduction.

If the bill passes the Senate, legislators from both houses will have to hammer out a version that they think can pass Congress. All of this takes time. It likely would be mid- to late December before a final bill takes shape, said Timothy Jost, an emeritus professor of law at Washington and Lee University in Virginia who is an expert on health law.

There's no way to predict if the provision eliminating the deduction will survive that process.

"The medical expense deduction repeal is pretty controversial, and I would not be surprised if it does not end up in the final bill," Jost said.

But that doesn't help you decide what to do today. One option is to schedule your dental work to be done late in December. Then you can make a decision over the next month about whether to keep those appointments based on what, if anything, happens in Congress.

Q: I got an email from an insurance broker that says they'll help me sign up for Obamacare, but they'll charge a $200 fee. Why would I pay that? Aren't there places I can go to get free help signing up?

Federal funding for health care navigators who provide free Obamacare enrollment help has been slashed in many areas. But those helpers are still available in every state, say experts. At healthcare.gov, click on "find local help" to find an assister or navigator in your area. Community health centers are another option, said Karen Pollitz, a senior fellow at the Kaiser Family Foundation (KFF). (Kaiser Health News is an editorially independent program of the foundation.)

Navigators may be your best option if you qualify for subsidies on the marketplace or need to enroll in Medicaid, or if your situation is complicated because of your immigration status or a language barrier, for example.

If you don't qualify for premium tax credits that are available to people with incomes up to 400 percent of the federal poverty level (about $48,000 for one person), you may want to work with a broker to search for policies not sold on the marketplace, said Sabrina Corlette, a research professor at Georgetown University's Center on Health Insurance Reforms.

You don't necessarily have to pay a fee for that, though.

As insurers have continued to reduce the commissions they pay brokers for selling Obamacare products, some say it appears more brokers are charging consumer fees. When KFF surveyed brokers in 2016, 49 percent said that at least some insurers had stopped paying sales commissions on all marketplace policies.

If you consider working with a broker who charges a fee, "your No. 1 question to ask is, 'Is this it, or do you also get a commission?'" Corlette said.

Please visit khn.org/columnists to send comments or ideas for future topics for the Insuring Your Health column.