Written By: Jeffrey A. Marshall , Esquire, CELA*

  Con artists are set to profit from Medicare's upcoming launch of an approved drug discount card program.

Leslie Norwalk, deputy administrator of the Centers for Medicare and Medicaid Services, has warned consumers to be wary of scams involving the new Medicare drug discount card. While the cards won't become available until May or June, Norwalk noted that many states, including Pennsylvania , are already seeing cases where con artists are targeting seniors with fraudulent come-ons related to the cards.

Scams may involve phone calls or door-to-door solicitations to "register" people for the new program. The thieves offer to enroll seniors in exchange for their bank information, social security number, or credit card number.  Norwalk noted that Medicare will contact recipients only by mail and will never phone or knock on a beneficiary's door to enroll them in a program.  She cautioned seniors not to give out personal or financial information to people they don't know.

Even if you decide you want to buy a Medicare approved discount card, it's good advice to never give out your Social Security number over the telephone to anyone who calls you.  You can never know the true identity of the person on the other end of the call. 

This is a confusing time for seniors and disabled Medicare beneficiaries.  Medicare approved discount drug cards, drug subsidies for low income beneficiaries, and the many other complicated changes resulting from the new Medicare Act are difficult for even the experts to comprehend. 

Seniors who need help with Medicare questions or assistance with information about health plans can contact the Pennsylvania Department of Aging's State Health Insurance Assistance Program (APPRISE).  It gives free health insurance counseling and assistance to Medicare beneficiaries.

APPRISE counseling services are available through your county Area Agency on Aging.  All services are free and confidential. You can also call APPRISE toll free at 800-783-7067.  APPRISE counselors can help you over the phone.  

If you suspect you have been a victim of a scam involving Medicare, you can contact the Medicare Fraud Hotline at 800-447-8477.

Pre-Paid Funeral Arrangements

Written by: Jeffrey A. Marshall and Kevin R. Grebas , Attorneys, Marshall, Parker & Associates'

  Most of us want to avoid becoming a burden to our families, either during our lives or at our deaths. This may account for the increasing popularity of prepaid funeral arrangements.

By making your funeral arrangements yourself, in advance, you can free your family from having to deal with this onerous task at a time of emotional turmoil.  You may also make wiser and more cost-effective choices which are more consistent with your own desires.

Advance Planning is Popular

People who make their own funeral arrangements in advance often prepay funeral and burial costs at the same time. A 1998 survey by AARP showed that approximately 25% of Americans over age 50 have prepaid for a cemetery plot or other burial place and 13% have prepaid for goods or services from a funeral director or funeral home. Your motivation for prepayment may be to free your family members from financial obligation or to ensure that your wishes will be carried out. An added incentive to pre-funding your funeral is that irrevocable prepaid funeral accounts are protected from loss to nursing home costs.  

Options for Pre-Funding

A variety of pre-funded arrangements are offered by different funeral homes. Some use life insurance as the investment vehicle, while others employ trust accounts. In some plans, the consumer picks out the services and merchandise desired for the funeral, and then prepays the money to pay for that specific funeral. The interest earned by the investment of the consumer's advance payment helps cover the increases in funeral costs that will occur over time. As part of this type of arrangement, the funeral director may guarantee to provide the funeral service you choose for whatever funds are in the account at your death, regardless of the actual cost of the service on the date of your death. Thus this option may have the advantage of protecting your family from the effects of future price increases.

In other plans, the consumer merely pays a flat fee to the funeral director. The funeral director agrees to invest the funds and, upon your death, to apply the funds to your funeral expenses. Any extra funds left after payment of funeral costs will be distributed according to the terms of your contract with the funeral director. Depending on the terms of that contract, the excess funds might be paid to your family or your estate, or might be retained by the funeral home. Under this option, if the funeral expenses exceed the prepaid funds, then your family or estate will have to make up the difference.

Consumers also have the option of creating a burial account directly with a bank.  The account can be set up to pay out to the funeral home of choice.  If the burial account is irrevocable, so that the funds can not be returned to the consumer, it is protected from nursing home costs.  

Proceed with Caution

Prepaid funeral plans can offer peace of mind and help ease the stress placed on family members at the time of your death. But, as several thousand Pennsylvanians have discovered in the past, there are a number of reasons why you should proceed with caution before buying a plan.

In the 1980s, hundreds of funeral directors in Pennsylvania invested their customers' prepaid accounts with Mechem Financial, Inc. But, Mechem placed the funds in highly speculative ventures, such as rare coins and diamonds, that yielded little return. By the time Mechem filed for bankruptcy in 1990, four million dollars in trust funds that Mechem had received from 1986 to 1990 had disappeared.

The Mechem case reinforces the need for consumers to use great caution when paying for a funeral plan in advance. Below are some tips to consider.

Before signing a contract

1. Review the contract carefully to decide whether it makes sense for you. Try to determine:

 (1) What is the rate of return on the investment of your funds? (2) Is there a guarantee that the ultimate charges for your funeral and cemetery goods and services will cost no more than you are paying for the plan? (3) Is the plan portable - that is, is it effective if you move to a different area?  Be sure that the contract you are entering into allows the funds to be transferred to another funeral home in the event that you move or decide to be buried elsewhere.  If the plan is not "portable," can it be canceled? If so, is there a cancellation penalty? (4) If the earnings of the trust or insurance policy are less than the cost of your funeral merchandise and services, who receives the difference? (5) What procedures are to be followed if the designated merchandise or services are not available at the time of your death?

2. Find out how the money you pay to the funeral home will be protected from the risk of loss.

Pennsylvania has enacted its own set of rules regulating the funding of prepaid burial accounts in order to protect residents of this Commonwealth from the risk of losing their investments. A Pennsylvania funeral director is required by law to deposit the entire amount of moneys received under a prepaid contract into an escrow account or into a trust administered by a banking institution located within Pennsylvania .  However, these protections are not available if you purchase funeral merchandise from other sources. Since companies that offer prepaid funeral merchandise and services are not regulated by the State Board of Funeral Directors, they are not required to place your funds into a trust or escrow account.

3. If you are purchasing merchandise and services through a company that is not regulated by the State Board of Funeral Directors, find out how the money you pay will be invested.

4. Check the reputation of the funeral home, and of any company that is holding your funds. Deal only with the most reputable companies.

5. Ask friends, family and clergy for their opinions and recommendations.

6. Visit the funeral home and burial site. Examine the floor samples of the merchandise you have chosen.

7. Don't be hesitant to "shop around" for the arrangement that best meets your needs.

8. Don't be reluctant to make advance funeral arrangements without prepaying. This still can relieve your family from making difficult decisions at a stressful time, without the risk of loss of your investment.

There are other important issues to take into consideration when deciding whether prepaying for your funeral is right for you.  You should think about who will actually have control of your funeral and burial arrangements after you die, whether you are entitled to any burial benefits from the government, and whether your prepaid account can be transferred to a different funeral home. 

Control of Remains

In 1998, Pennsylvania enacted Act 99 which provides rules governing who controls the disposition of the remains of a deceased person. This law says that you can put instructions in your will regarding the final disposition of your remains.  If you don't specify your desires in your will, your spouse will have the sole authority to make all decisions.  If your spouse is incompetent, or you are unmarried, your next of kin will have the control.  The law defines your "next of kin" as the "relatives of the blood of the deceased."  This statute is found at 20 Pa.C.S.A. § 305.  Here is a link to it: http://members.aol.com/DKM1/20.Cp.3.html.

 Veteran's Benefits

The Veteran's Administration will pay up to $300 toward burial expenses and another $300 as an interment allowance for veterans who die from non service-related causes.  Much greater benefits are available to those whose death is service-related.  Also, many counties offer additional burial benefits to veterans. Since this amount will vary from county to county, veterans should contact their local Office of Veteran's Affairs to learn the amount that will be available to them.

In general, if you make advance arrangements for your funeral, you may ease the emotional burden on your family at the time of your death. Paying in advance, however, may not always be a wise choice. Proceed with caution before you invest.

The Federal Trade Commission has a consumer's guide to funerals.  It is available online at: http://www.ftc.gov/bcp/conline/pubs/services/funeral.pdf

Mark Your Calendars!

8^th Annual Marshall, Parker & Associates' Professional Update Planned

  Spring has arrived and that means.the Marshall, Parker & Associates' Professional Update is right around the corner.  This year, our 8^th Annual Update will take place from 8:00AM-12:00PM , May 6^th, at the Radisson in Williamsport and on May 7^th, at the Woodlands in Wilkes-Barre . 

This will be your opportunity to get the latest update on changes that are taking place that are of critical importance to seniors and to those of us who provide services to them. You will learn what you need to know about the new Medicare discount drug cards and transitional assistance subsidies.  Representatives from the Department of Aging, the Alzheimer's Association, the Assisted Living industry, and other experts will detail the many programs and issues involved in the great expansion of home and community based care that is taking place in Pennsylvania .

The Update is FREE and intended for professionals in the elder care and elder services network such as individuals working in nursing homes, hospitals, assisted living and personal care facilities, area agencies on aging, and county assistance offices.  It should also be of great interest to social workers, financial planners, accountants, lawyers, and trust officers who work with seniors.  To register, call 1-800-401-4552.

Stay tuned to the Elder Care Law Alert for more information!

Do you have a friend or colleague who would enjoy reading the Elder Care Law Alert?  If so, please feel free to forward it to them. Simply use the "Forward" button on your e-mail program.

  To subscribe or unsubscribe to the Elder Care Law Alert,

simply send your request to:

webmail@paelderlaw.com

Does Your Club Or Organization Need A Speaker?

If you are interested in having an attorney or geriatric planning specialist from

The Elder Law Firm of Marshall, Parker & Associates' speak to your group, or at an upcoming event, please contact

our Public Education Coordinator,  Melissa Bottorf

at mbottorf@paelderlaw.com or 1-800-401-4552

*Attorney Marshall is certified as an Elder Law Attorney by the National Elder Law Foundation under authorization from the Pennsylvania Supreme Court