Sunday, May 22, 2016

A Shameful Problem: Elder Financial Abuse

A new report suggests that financial abuse of older adults is much more prevalent than previous thought. The statistics we have been using on financial fraud and exploitation of the elderly may be way low.
If you are over 65 you probably suspected this was true. If you are like me, you receive fraudulent telephone solicitations every week, if not every day. I get a lot of robocalls from Rachel and Heather from Credit Card Services, and occasional robocalls stating that I owe back taxes to the IRS.
Unfortunately, you cannot rely on caller ID to verify the identity of the person who is calling you. Scammers use fake caller ID information to trick you into thinking they are someone else – maybe someone you trust like a government agency or a company with whom you do business. This deception is referred to as “call spoofing.” So, it is impossible to tell whether the caller ID information shown on your phone is real.  
The most frequent fraudulent call I get is the “Microsoft Technical Support” scam. The caller says he/she is from Microsoft Technical Support and they have discovered a problem with the “Windows” on my computer.  Of course the caller is not from Microsoft and the whole thing is a fraud. The best response is just to hang up. But a few days ago I told one of these callers (“John”) that I was writing a blog article on scams against seniors and asked if he would answer a few questions. To my surprise he agreed.
John said he had been doing this “work” for about 10 years. He said he only works one day a month. He doesn’t have another job – he makes enough from this one day to support himself. He said that the people who fall prey to this scam are generally people who don’t know anything about computers. He said most of those people end up giving him access to their computers.
I asked John why I sometimes got more than one call on the same day from “Microsoft Technical Support.” He said his group works each day on a particular geographic region. Today was “Pennsylvania” day. At this point, John apparently got bored with my questions and hung up.
Now, I do appreciate that John is in the business of lying, and that he may have just been boasting about only having to “work” one day a month. But I’m guessing there is some truth in his responses to my questions. Clearly many older adults fall prey to this and other forms of financial abuse.  
How much do seniors lose to financial abuse? It’s difficult to say, especially since so much of the damage likely goes unreported. But a recent report suggests that financial abuse costs the elderly over $36 billion a year. See: The True Link Report on Elder Financial Abuse 2015. [It should be noted that True Link has a financial interest here - it sells products to protect older Americans from financial abuse.]
The True Link report is based on a survey of people who are family caregivers for older Americans. The 2,096 respondents were asked to describe the financial issues they experienced in caring for an older adult over the last five years. Elder financial abuse was defined as any time someone took financial advantage of an older adult in a way that would not have been possible when the senior was younger.
According to the survey results approximately 37% of seniors are affected by financial abuse in any five-year period. The report breaks the abuse down into three categories: 
  1. Financial exploitation: $16.99 billion is lost annually to financial exploitation, defined as when misleading or confusing language is used—often combined with social pressure and tactics that take advantage of cognitive decline and memory loss—to obtain a senior’s consent to take his or her money.
  2. Criminal fraud: $12.76 billion is lost annually to explicitly illegal activity, such as the grandparent scam, the Nigerian prince scam, or identity theft. 
  3. Caregiver abuse: $6.67 billion is lost annually to deceit or theft enabled by a trusting relationship—typically a family member but sometimes a paid helper, friend, lawyer, accountant, or financial manager.

Some of the study’s conclusions are unexpected. Because of their added exposure, seniors who are young, urban, and college-educated actually lose more money than those who are not. And seniors described as extremely friendly lose four times more to elder financial abuse.
It seems to me that our society is not yet prepared to protect our older adults from this onslaught of financial elder abuse. Existing Older Adult Protective Services Agencies and law enforcement can respond in the caregiver abuse area. But they don’t have the ability or resources to address the kinds of telephone based financial exploitation and criminal fraud seniors are experiencing.  
So, don’t rely on the government to protect you from telephone scams and other financial abuse. You are going to need to educate yourself to protect yourself and your loved ones. Listed below are some online resources you can use.
And I personally suggest that we older adults all put notes on our telephones that say: “Don’t Be Nice. Hang-Up Now!”  
Further Reading and Resources:
-       Ten Ways to Avoid Fraud, Federal Trade Commission
-       Elder Justice Initiative website, US Department of Justice
-       Resources for Preventing Elder Investment Fraud, Investor’s Protection Trust

-       Lies, Secrets, and Scams: How to Prevent Elder Abuse – Consumer Reports 

Friday, May 13, 2016

PA Department of Aging Releases Draft State Plan on Aging for 2016-2020

Every four years, the Pennsylvania Department of Aging (PDA) is required by both state and federal law to develop and submit a "State Plan on Aging" to the federal government. The Plan is required for Pennsylvania to receive federal funds under the Older Americans Act.

The four year plan is intended to provide a vision and direction for Pennsylvania’s network of aging services and to help structure the Department’s priorities. A draft of the 2016-2020 Pennsylvania State Plan on Aging is now available to the public for review and comment. You can find the draft plan on the Department’s website here.
The PDA will hold public hearings during May in Harrisburg, Philadelphia, and Pittsburgh to obtain public input on the plan. Further information on the public hearings is provided below.
The Draft Plan establishes 4 major goals:
Goal 1: Promote existing services.
Goal 2: Improve access to services.
Goal 3: Enhance quality of services.
Goal 4: Empower the workforce.
The final plan will be submitted to the federal Administration for Community Living later this year. This plan will be effective from October 1, 2016 through September 30, 2020.
Information on Public Hearings
The public hearings provide an opportunity for stakeholders to submit formal feedback on the Draft 2016-2020 State Plan on Aging. Here is the date, location and time of each of the three public hearing. 
  • May 18 – Allegheny County, Allegheny County AAA, 2100 Wharton St., 2nd Floor Conference Room, Pittsburgh, PA  15203, 10:00 A.M. to Noon 
  • May 19 – Dauphin County, Hamilton Health Center, Community Room, 110 S. 17th St., Harrisburg, PA 17104, 2:00 P.M. to 4:00 P.M.
  • May 24 – Philadelphia County, Drexel University, Bossone Engineering Building, 3rd Floor Atrium, 3126 Market St., Philadelphia, PA 19104, 10:00 A.M. to Noon
How to Comment on the Draft Plan
If you want to provide comment at a hearing, you must contact Abby Fox, Community Liaison, at (717) 783-6128 or StatePlanonAging@pa.gov to confirm your attendance. You will be allotted five minutes to provide your testimony. You are also required to submit a copy of your written testimony on the day of the public hearing you attend. 
If you require auxiliary aids/services, please contact Abby Fox, Community Liaison, at (717) 783-6128 or StatePlanonAging@pa.gov, at least three business days in advance of the hearing you plan to attend. 
If you are unable to attend in person, please submit your written comments by email to StatePlanonAging@pa.gov. All comments must be received by May 24, 2016. You may also submit your written comments by mail to:
Pennsylvania Department of Aging
Kelly O’Donnell, Director, Operations and Management Office
555 Market Street, 5th Floor
Harrisburg, PA 17101

Thursday, May 5, 2016

Cost of Care 2016



Each year Genworth surveys long-term care providers in hundreds of local regions nationwide to determine the cost of various long term care services. This information  can help consumers anticipate and plan to meet the high cost of care in their preferred geographic location and care setting. 
Genworth recently issued its survey report for 2016. Here are some highlights with a focus on areas my law firm serves in Northcentral and Northeastern Pennsylvania.
What is Long-Term Care
Long-term care refers to the types of assistance you need if you have a prolonged physical illness, disability or severe cognitive impairment (such as Alzheimer’s disease) and require ongoing support. These limitations may prevent you from carrying out basic self-care tasks, such as bathing, dressing or eating, which are called "Activities of Daily Living" (ADLs). And you may need assistance with "Instrumental Activities of Daily Living" (IADLs), such as meal preparation, money management, house cleaning, medication management, and transportation.
The support may be provided in various settings including the care recipient's home, a personal care facility, or a nursing home. The care required can range from only limited in-home support all the way to 24 hour care provided by professional nurses and trained staff in licensed nursing facilities. 
About 70 percent of people age 65 or older will need some long-term care services and supports at some point in their remaining lifetime.
Initially long-term care support may be provided by uncompensated family members. But a loved one’s care needs can easily overwhelm family caregivers and unpaid care must often be supplemented with paid assistance. Unfortunately, the costs of paid long-term care services and supports are typically not covered by Medicare or other health insurance. They can easily bankrupt the recipient and destroy a family's financial security. 
The Genworth survey provides both national and local cost of care information that can help families understand, prepare for, and perhaps limit the potentially catastrophic financial impact of long-term care.
Care Costs for the Williamsport, Bloomsburg, Scranton and State College Areas
Long-term care is provided in a variety of settings. Costs vary by setting and by geographic location. The Genworth survey provides a list of costs incurred for various services in different settings and localities in each state.
In Pennsylvania, the survey places Williamsport, Bloomsburg, Scranton/Wilkes-Barre, and State College into separate regions and the average costs for similar services do vary somewhat between these regions. The median annual costs for various support services in each of these areas during the most recent survey were as follows:
Homemaker Services (based on 44 hours per week)
$45,760        Williamsport
$44,616        Bloomsburg
$50,336        State College
$43,476        Scranton/Wilkes-Barre
Home Health Aide Services (based on 44 hours per week)
$45,760        Williamsport
$44,616        Bloomsburg
$50,336        State College
$49,129        Scranton/Wilkes-Barre
Personal Care Facility (based on 12 months, private, one bedroom)
$41,580        Williamsport
$43,140        Bloomsburg
$41,940        State College
$33,300        Scranton/Wilkes-Barre
Nursing Home (semi-private room(based on 365 days of care)
$107,493      Williamsport
$84,315        Bloomsburg
$98,003        State College
$107,675      Scranton/Wilkes-Barre
Nursing Home (private room) (based on 365 days of care)
$120,315      Williamsport
$98,550        Bloomsburg
$69,533        State College [Editor's note: this figure appears to be incorrect]
$112,734      Scranton/Wilkes-Barre
The above costs are staggering. Fortunately, there are a few programs including Medicaid and Veterans Benefits (for veterans and their spouses) that can often help finance the cost of care.  Expert guidance from an elder law attorney can help families qualify for financial assistance sooner rather than later.
Planning, preparation, and expert assistance are critically important. Pennsylvania residents can meet with an experienced elder law attorney at Marshall, Parker and Weber to set up a plan that will help you find the most appropriate care and pay for it without bankrupting your family.
In addition, Marshall, Parker and Weber offers care management services that help families get the long-term care information and support needed to best manage health and personal care issues. A care manager can help you ensure that your loved one will get the best possible care whether at home or another location. And they can help relieve the enormous burdens and stress you face in being a caregiver.
Contact our care manager Karen Griswold for more information on how professional care planning can benefit your family. You can contact her at 1-800-401-4552 or KGriswold@Paelderlaw.com.   

Tuesday, April 19, 2016

Pennsylvania Authorizes ABLE Savings Accounts



Act 17 of 2016 - The Pennsylvania Achieving a Better Life Experience Act (PA ABLE) - became law on April 18th. The new law authorizes the creation of special tax free savings accounts for individuals who became severely disabled before they reached age 26.  
In December 2014, the Federal government first authorized states to create ABLE tax free savings account programs. ABLE accounts allow certain individuals with disabilities to accumulate savings without losing their eligibility for means tested SSI, Medicaid and other government benefit programs. To be eligible for an ABLE account an individual’s blindness or disability must have occurred before the individual reached age 26.
An ABLE account is established by and owned by the disabled individual (or by a parent or fiduciary acting on behalf of an eligible individual who is a minor or who lacks capacity). Anyone can contribute to it.
The money in an ABLE account can be used to pay for a broad range of "qualified disability expenses." Funds can be used to pay for education, housing, health, transportation, personal support, employment training, legal and financial assistance, and more.
If the rules are followed, earnings on the ABLE account will not be subject to federal income tax, and perhaps more importantly, the funds in the account will not disqualify the owner from continued benefits under the Supplemental Security Income (SSI) and Medicaid programs. (If the account balance exceeds $100,000, SSI is suspended but Medicaid eligibility can continue.)
Act 17 provides the PA Treasury Department with the authority to enact regulations to establish and administer an ABLE account program for the Commonwealth. Treasury may coordinate the required administrative or investment structures with the already existing Tuition Account Investment (PA 529 College Saving Plan) Program.
It is anticipated that the PA ABLE program will open for accounts in the fourth quarter of 2016. Treasury has already created a website with information on the PA ABLE program. On that website you can sign up now for updates and open an ABLE account when the program becomes available.
In addition to the public benefits and federal income tax advantages, an ABLE account will not be subject to attachment, levy or execution by any creditor of a contributor, account owner or designated beneficiary. It shall not be used as security for a loan. Under Section 702 of the Act ABLE accounts are exempt from Pennsylvania income and inheritance tax. A related bill (HB1319) that will allow ABLE contributions (up to $14,000 annually) to be deducted from Pennsylvania state income tax appears to be on track to become law.
The PA ABLE program may become available to qualified individuals residing in other states. Act 17 directs Treasury to engage in joint efforts with other states to establish and maintain ABLE savings programs. And it authorizes Treasury to provide all or part of the program to beneficiaries residing in another state. Likewise, ABLE programs established by other states may become available to qualified residents of Pennsylvania.
One interesting aspect of Act 17 is its prohibition of medical assistance (Medicaid) recovery upon the death of a designated beneficiary. Section 503(d) of the Act says:  
(d)  Death of beneficiary.--Unless prohibited by Federal law, upon the death of a designated beneficiary, proceeds from an account may be transferred to the estate of a designated beneficiary, or to an account for another eligible individual specified by the designated beneficiary or the estate of the designated beneficiary. An agency or instrumentality of the Commonwealth may not seek payment under section 529A(f) of the Internal Revenue Code from the account or its proceeds for benefits provided to a designated beneficiary.
However, Federal law provides that after the death of the beneficiary funds remaining in an ABLE account must be used to repay any state Medicaid plan that was used by the beneficiary after the account was established. Under section 529A(f) of the Federal law, a qualified ABLE program must provide that, upon the designated beneficiary's death, any State may file a claim for the amount of the total medical assistance paid for the designated beneficiary under the State's Medicaid plan after the establishment of the ABLE account.
It will be interesting to see how the regulations developed by the PA Department of Treasury deal with this Medicaid repayment issue. The lack of a repayment component could make the PA ABLE program particularly attractive to qualified individuals across the entire country.

For national information on ABLE accounts you can visit the ABLE National Resource Center.  
I’ve written a number of other articles on ABLE Accounts: