Government
Warns that Con Artists are Ready to Use Discount Drug Card Confusion to
Cheat Seniors
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 & 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!
8th
Annual Marshall & Associates Professional Update Planned
Spring has
arrived and that means…the
Marshall & Associates
Professional Update is right around
the corner. This year, our 8th
Annual Update will take place from
8:00AM-12:00PM
, May 6th, at the
Radisson in
Williamsport
and on May 7th, 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 & 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
© 2000-2005
Marshall & Associates www.paelderlaw.com
