Reuters Money
Identity theft among family members affects millions
Two million to three million elderly parents had their identities stolen between 2006 and 2010 by a younger family member for fraudulent reasons including opening lines of credit, according to a new study.
The report by ID Analytics is different from typical surveys on the subject, which only capture what people say. This time, company CTO Stephen Coggeshall says, the figures are based on analyses of 1 billion applications for credit cards and cell phones that showed just how many times younger family members apparently fraudulently used their elder parents’ credit.
“We are literally looking at the entire set of credit-active people in the United States. Even surveys wouldn’t uncover this, because a lot of victims don’t know they’re victims,” he says. “The realities of familial identity theft are far worse than anything you see in a soap opera. It is the ultimate in family betrayal.”
Identity theft expert Linda Foley, who runs the consultancy ID Theft Info Source says the sad truth is family members steal each others’ identities because they can. “If you want to steal a Social Security number, it’s far easier to steal the information of someone close to you because you have easy access.” And she adds that this is a grossly under-reported crime because it’s particularly difficult for the victims to turn in their own children. ”The egregiousness of this crime is the parents don’t feel the need to protect themselves from their own children,” she says.
Laws in most states adds extra penalties when the crime victim is a senior, and on Thursday Senators Amy Klobuchar (D-MN) and Bill Nelson (D-FL) introduced legislation to protect seniors from fraud by court-appointed guardians and conservators. But legislation hasn’t yet translated into change. Last March when Mickey Rooney testified before Congress about elder abuse, he said he wasn’t a rare case of family members bilking money from older relatives, stealing their identities and committing other types of financial fraud. But what is rare about his case is that Rooney, 91, went public with it, and announced in September that he is suing his stepson and other relatives, alleging years of financial and emotional abuse that cost him millions.
The typical scenario of identity theft of older family members, Foley says, is when an adult child starts helping an elderly parent with the finances. When you’re older, she says, “It’s unlikely you’re going to be checking your credit report all the time. So they remain blind to the crime.”
When an adult child has been put in charge, Foley notes, that’s often who is informed when there’s a suspicion of theft.”If the adult child is the one managing the parents’ finances they’ll simply be told that someone is stealing their parent’s identity and they already knew that,” she says.
What next for long-term care after CLASS act folds?
The federal government threw in the towel on creating a public option for long-term care coverage last week, and that would seem to be definitive for now.
In defeat, Health and Human Services (HHS) Secretary Kathleen Sebelius was doing the right thing in admitting the concept’s flaws and cutting the government’s losses of the proposal, which was a lesser-known component of the new health reform law. It was an attempt to expand the number of Americans with long-term care coverage by providing a basic, inexpensive LTC option deployed mainly through the workplace as an opt-out choice in benefit plans.
Republicans were overjoyed with the decision, obviously, since they have always seen CLASS as a budget trick to pump up the health law’s revenue and make the law seem less expensive than it is. (CLASS had been projected to generated $86 billion in revenue in the early years from premium payments made by policy holders whose coverage had not yet vested.)
But there is still the problem to solve about how we’ll care for our frail elderly in the years ahead, and it’s unclear what the path to a solution will be. After the shouting subsidies, we’re still left with an inadequate, patchwork system for funding long-term care in the U.S.
The Center for Retirement Research at Boston College (CRR) says about one-third of Americans turning 65 this year will need at least three months of nursing home care sometime during their lives.
Medicare covers only a small portion of long-term care needs, and the cost of a semi-private room averages $79,000 per year. CRR calculates that the mean lifetime exposure to long-term care costs for a 65-year-old couple is $260,000, with a five percent risk of a $570,000 expense.
Meanwhile, Medicaid remains the nation’s largest LTC funder, paying for more than 40 percent of all care. And the market for private LTC insurance continues to limp along, the victim of collective national denial and expensive policies.
Jonathan Pond, Financial Planner, says that 90% of estates are spent this way: 1) nursing home, 2) IRS, 3) children, 4) grandchildren, 5) charity. More people are worried about the IRS taking their money than about having to spend it on a nursing home.
The Federal Deficit Reduction Act provided for every state to have a Partnership program to provide asset protection for those who buy qualified long term care insurance policies. http://www.partnershipforlongtermcare.co m/
An alternative to “lose it or lose it” LTC insurance are linked-benefit products, Life insurance or Fixed annuities with long term care riders. In most states if over 59 1/2 you can use qualified money (IRA/401k) to fund your plan. http://guidetolongtermcare.com/linkedben efit.html
For-profit or not: What to consider when choosing a nursing home
As a state-appointed consumer advocate overseeing complaints about Florida’s long-term care industry, Brian Lee became curious about corporate ownership earlier this year. He sent nearly 700 letters to every nursing home in the state requesting information about which entities owned which facilities.
It wasn’t idle curiosity.
Numerous investigative reports over the past decade have found that for-profit nursing homes tend to under-perform when compared to non-profit facilities.
The most recent of these, a U.S. Government Accountability Office study released last month, looked not only at for-profit homes – many of which are operated by publicly-traded companies – but also at nursing homes operated by private investment firms. Private investment firms are not publicly traded; they are less financially transparent than publicly traded or nonprofit firms.
The GAO study reinforced that for-profit nursing homes – which account for more than two-thirds of nursing homes nationwide – had more frequent and serious deficiencies than non-profit homes. And while nursing homes tended not to perform any worse in cases when a private investment firm took over operations from a non-profit or otherwise for-profit firm, private investment firms did tend to spend more money “to increase their homes’ attractiveness to higher paying residents” without doing much to improve staffing or services.
Lee’s letters were sent to find out what many folks with aging loved ones want to know: Who’s really in charge of particular nursing facilities? And does “attractiveness to higher-paying residents” really mean clients will receive better care?
Lee didn’t receive answers. In fact he was asked to resign from his job. And according to a lawsuit he recently filed, Florida Gov. Rick Scott became concerned about Lee’s efforts to keep for-profit nursing homes accountable.
Long-term care insurance gets a makeover
Less than two decades ago, Meryl Comer and her husband Dr. Harvey Gralnick embodied the American Dream: He was a physician, while she had built a career as an Emmy-winning reporter, producer and broadcast journalist. Everything looked perfectly in place for their careers to soar, their nest egg to grow.
Then came the news any couple would dread: Gralnick was diagnosed with early-onset Alzheimer’s Disease at 57. Soon he couldn’t recognize Meryl, and the couple went into financial free-fall as Comer took over his round-the-clock care.
“Here we have two people without income, and all the financial planning we have in place has disappeared,” Comer recalls. “It’s a straight financial bleed. With dementia, you’re easily looking at $9,000 a month.”
How does she make it, then, considering the couple had no long-term healthcare plan? “I don’t,” she says. “I’m going broke. The house will go next.”
Comer, who serves as president of the Geoffrey Beene Foundation Alzheimer’s Initiative, has become an outspoken advocate of long-term care insurance — an option barely understood, if not downright ignored, by most American consumers, including an alarmingly large percentage of Baby Boomers.
With long-term care policies, the costs of assisted living facilities, in-home care and private nursing homes are covered, in many cases with inflation protection. But since not many people are signing up for policies, the companies that offer them are trying to make them more palatable. On Monday, Genworth Life Insurance Company launched Privileged Choice Flex, a long-term care solution that allows consumers to more easily choose an insurance plan that best suits their lifestyle and budget.
“It’s been 24 months in development and it will be another eight months before it’s fully available across the United States,” says Matthew Sharpe, Genworth’s long-term care product manager. “It takes a long time. We had three different products in the marketplace and combined them into one offering.”
Reading their story does make me feel rather concerned for my future. While I have some life insurance policies taken up a long time ago, I do not have any for long term care, and it does worry me. Thanks for sharing this story; I will definitely explore my options.
Joseph – http://www.termlifeinsurance.com
I’ve fallen and I can’t Tweet: New tech solutions to elder care
It’s rare to find a person over 20 in the U.S. who’s not familiar with the expression “I’ve fallen and I can’t get up.”
The phrase is used in an ongoing, decades-old advertisement from Life Alert Emergency Response, a company founded in 1987 that hasn’t really altered its phone-based, 24-hour emergency help for older folks. The service is still accessible via a button on a lanyard worn around the neck or on a wristband.
Not an iPhone app? Not a GPS tracker?
For years, companies have tried to improve upon the concept, but have not dented Life Alert’s market share. The company says it has more than 17,000 “grateful testimonials” and “[saves] a life from a catastrophe every 17 minutes.”
But with today’s aging population, families find themselves in need of more than just alerts of falling. Depending on where families reside, nursing homes can be expensive. A recent study from Genworth Financial showed that a private room in a New York nursing home this year could cost as much as $119,355 annually. In Massachusetts, it’s $125,925. And in Alaska of all places, it’s $227,760. So people are looking toward technology to manage elder care longer — and keep their older relatives safer — without breaking the bank or resorting to full-time nursing facilities.
And it’s not always just seniors who are looking for emergency contact services. Take Scott Tatum of Memphis, Tennessee, for example. One evening in May during storms and intense flooding, computer programmer Tatum, 44, was stuck in his car, facing down a tornado.
He went unharmed, but he was unable to check in with his family. Phone lines were down. His text messages wouldn’t go through. And he guessed that his parents would worry: All they knew was that heavy storms had begun after he left a family gathering.
The problem, I find, with many of these “senior” friendly tech things is just how much they cost in relation to the people who use them. The Sonamba is $600 plus accessories and plus another $50 or so for the monthly activation fee to use it. I’ve been researching the new, touchscreen senior computer for my grandparents and that’s still $600, but at least no activation. I guess for now they have to keep rocking the SVC senior cell phones I got them – they were only $15 and pretty bare bones, but I figured something was better than nothing. If some of this technology is ever able to get down to the level of SVC, then I think a lot of people could benefit.
Long-term care funding wrapped up in deficit debate
The following is a guest post by Brad Allen. The opinions expressed are his own.
The debate over funding long-term care has gotten renewed energy – but no greater clarity – from the current deficit reduction discussions roiling Washington.
Seventy percent of Americans over the age of 65 will need some level of long-term care in their lifetime with 20 percent requiring two to five years of care, according to the U.S. Dept. of Health and Human Services. Annual costs can vary widely, but the national average in 2008 ranged between $18,000 for part-time in-home health aides to $68,000 for a semi-private room in a nursing home.
Some long-term care insurance premiums have shot up by as much as 40 percent in the past year. A few providers have stopped writing new policies, recognizing that they underestimated the cost of delivering care covered by policies written a decade ago.
AARP recently released a study estimating the economic value of unpaid help with daily activities provided by family caregivers totaled approximately $450 billion in 2009, up nearly 17 percent in two years. That was nearly four times the amount paid by Medicaid for long-term care and more than double the $203 billion paid by all sources, AARP says.
“We don’t have a long-term care system in this country. We have a great unfilled need and not lot of people planning to meet that need,” says David Certner, AARP legislative policy director. The non-medical portion of long-term care is covered by a combination of Medicaid – if the consumer meets financial eligibility – out-of-pocket savings, unpaid family caregivers and private insurance, which covers less than 10 percent of total cost.
The swelling demographic bubble of aging Baby Boomers will exacerbate budget challenges while consumers already face complex eligibility rules, confusing insurance options and fears of draining personal savings that would leave their surviving spouse destitute.
As cost of care rises, families bear the burden
Months after Terri Corcoran married in 2000, her new husband began to show signs of fatigue and memory loss.
By 2004, Corcoran’s husband, a former laser scientist in his early 70s, had been diagnosed with a rare genetic brain disorder. This once-independent person could not speak and needed help eating and using the bathroom.
With his children unable to offer day-to-day help, Corcoran, 60, became her husband’s lifeline.
Last year, she spent $78,000 of their savings on his care. She also retired from her job.
“I have to care for him full-time,” she said from their Virginia home. “Now I feel like I’m the CEO of a corporation built to do nothing but that.”
While the circumstances of Corcoran’s marriage may not be common, her role as an elder caregiver is.
An AARP study published last week showed that, in 2009, one in four U.S. adults helped to care for an elderly family member or friend. That volunteer work, according to the study, was worth an estimated $450 billion.
How sad that our legislators are unable to assist citizens and families with home care needs. Of course it’s expensive! Rather than requiring financing when a family is struggling to care for its needs, a small tax (oh no, the “t” word !!!) as we have for Social Security would be the answer. We have provided our legislative “leaders” with a very generous benefits package, while denying ourselves the same.
Alzheimer’s: Early planning critical to financial health
Jean Dorrell knew something was wrong when the birthday card her father usually sends two weeks ahead of schedule didn’t arrive in the mail.
“This past year he forgot my birthday and he forgot my brothers’ birthdays, so we realized he was slipping pretty fast,” says Dorrell, a certified financial planner and founder of Senior Financial Security in Summerfield, Florida.
An Alzheimer’s diagnosis is a devastating blow, one that requires immediate action to ensure the financial resources built over a lifetime can sustain a person through this progressive and fatal disease.
The costs associated with Alzheimer’s can be just as debilitating as the symptoms. In 2004 — the latest data available — the cost of caring for a Medicare patient with Alzheimer’s or other dementia was $42,072 compared to $13,515 for patients without these conditions. (Those figures have been adjusted for 2010 dollars).
And the costs are climbing: Healthcare, long-term care and hospice payments for Alzheimer’s and dementia are projected to increase from $183 billion in 2011 to $1.1 trillion in 2050 (in 2011 dollars), the AA report states.
Despite the hefty price tag for care, the financial services industry seems ill-prepared to deal with the needs of this particular group. Even though 84 percent of financial advisers have come in contact with a client who suffers from Alzheimer’s, 96 percent don’t feel ready to assist, according to a 2009 study from Fidelity Investments. Kevin Kautzmann, a certified financial planner with EBNY Financial LLC in New York, says that’s got to change. ”While there is a prevailing fear within the industry of accusing a client inappropriately and getting fired for it, if the issue is handled with respect and sensitivity, clients and their families respond very well to the fact that their financial adviser is genuinely concerned about their loved ones,” Kautzmann says.
When should families start to plan? It’s critical to start early, says Beth Kallmyer, senior director for constituent services at the Alzheimer’s Association. “It’s important [that] the person with the disease is involved in that planning,” she says. “In the early stages of the disease, the person who has Alzheimer’s can ensure their wishes are going to be carried out, which is empowering,” Kallmyer says. And later on, the family will have a framework to do what their family member wants when they can no longer make decisions.
It’s a shame so many people continue to wait until AFTER the insurable event occurs to begin our financial planning. We have a tendency to make poorer decisions under pressure, during times of crisis.
To a certain degree, the lay public can be forgiven for postponing these decisions: educated professionals who act as their fiduciaries can NOT. I guess that’s why this article is so disappointing. There is a reason the government’s safety net for the poor is tattered. People who could have, should have, and would have indemnified themselves against the risk of extended care have instead turned to Medicaid, its “spend-down” requirement largely mythical (and otherwise avoidable by elderlaw enablers).
At the same time we are told “insurance companies don’t have enough money”, they pay some $10.8 Million in long-term care claims each day. The checks go out like clockwork. If the financial services industry is ill-prepared to deal with the needs of the senior demographic, speak for yourselves. There are something like 40,000 LTC Insurance Specialists in this country who are more than willing to meet with and assist these clients. It’s what we do.
In fact, when it comes to this very specialized field, I would ONLY recommend a certified, licensed and trained LTCI Specialist: the decision about how best to protect one’s spouse and family is too important to leave to “part-timers” for whom LTCI is not their full-time occupation.
Best Regards,
Stephen D. Forman, Senior Vice-President
Long Term Care Associates, Inc.
http://www.ltc-associates.com
@ltcassociates
Golden Girls 2.0: Shared housing as a retirement strategy
Those Golden Girls may have been on to something. Alternative living arrangements — like the group house featured in the popular 80′s sitcom — are gaining steam among retired women, affording them a higher standard of living, in-home support services and companionship while aging in place.
Want to employ that personal chef you’ve always dreamed about? What about a pool and a view of the 18th hole? With women living at least five years longer than men on average, home sharing — which is dominated by women — helps them maintain or even elevate the quality of life in retirement.
Homesharing allows participants to continue a certain kind of lifestyle that they may not be able to afford when they are out of the workforce, single or widowed. That’s really the most compelling reason to share a home, but companionship is a big draw, says Nancy Thompson, AARP spokesperson. “It’s nice to have company, to remark about something to someone, or to share your interests,” she says.
“I’ve often said I wanted to live like the Golden Girls,” says Marianne Kilkenny, home share advocate and founder of Women for Living in Community. Kilkenny, 61, shares an Ashville, North Carolina home with four other renters — two women and a married couple — ranging in age from 58 to 71. “For boomer women, we’re the first generation that has had the financial means to be able to live on our own for any length of time and are finding that it gets really old because you have to count only on yourself,” she says.
A sense of belonging and peace of mind is integral, says Kilkenny, adding shared housing has allowed her to live in a nicer home with better appliances in a swankier neighborhood. “One of the oldest human needs is having someone to wonder where you are when you don’t come home at night,” she says, quoting Margaret Mead. “For those of us who have been single, these are the things you don’t know you are missing.”
In 2010, there were approximately 480,000 baby boomer women living with at least one female non-relative roommate and no spouses, according to an AARP analysis of population survey data. That’s approximately 130,000 Golden-Girl type households across the country.
The home share trend is so popular that match-up services are springing up around the country.
As boomers age into retirement years, especially single boomers, I envision this as a viable housing option. Shared expenses and not living alone will allow many the freedoms, financially, that they would not have otherwise. Personally, I do not want to spend the bulk of my monthly income on basic living expenses. I want to travel and do things I have not yet done.
I do not want to live in a community of all older people. I want to live where there area children playing, and activity. I will not discount living with older friends.
Eldercare: How to hire your kids to take care of you
Long before the phrase “sandwich generation” took hold, seniors in declining health turned to children or other relatives for essential tasks such as cleaning, grocery shopping, doing laundry or driving to doctors’ appointments. Now, a growing number of families put a price on such devotion though caregiver contracts.
As the name implies, caregiver contracts outline in detail paid arrangements between a parent and child, relative or anyone else in the caregiving loop. Among other things, a formal agreement sets forth the length of time and rate of pay for caregiving services, and the tasks to be performed.
While children who care for elderly parents is nothing new, tough economic times and the rising cost of nursing home care add appeal to paying them for doing so under a contractual arrangement. “These days many people can’t afford to care for someone without getting paid, especially when they have to leave a job to do it,” says Ellen S. Morris, an attorney with Elder Law Associates in Boca Raton, Florida. “For parents, paying a child or other relative can help them stay at home and provide assurance that they are not being a burden.”
Caregiver contracts mushroomed with a 2006 change in the law that makes it more difficult for people to give away their assets to qualify for Medicaid. By spending down savings to pay for caregiving, elders can lay the foundation for Medicaid to pick up the tab should a nursing home stay be required. According to Morris, that’s an important goal for about half of her clients who use contracts with family members.
They can also make it easier for veterans to qualify for certain benefits, says James Mullen, an elder law attorney in Bristol, Rhode Island. Under one program, some disabled veterans who pay a relative or other person for care can include those amounts as medical expenses, which may qualify for government reimbursement.
While formal contracts pave the way for receiving government benefits by setting important details in stone, Mullen says that suggesting them to family members often evokes an emotional response.
“The kids don’t want to look like they are being greedy and some parents believe that children should care for them out of love, not money,” he says. “But when I point out that a son or daughter is providing a valuable service, and often suffering a financial loss by taking time away from a job to do so, that sometimes changes their minds.”
Very interesting and thanks for the information. I think this information is very useful. I want to share with you this information:
DEMENTIA AND ALZHEIMERS – MY STORY – JOHN DU PREEZ
When I received confirmation that I have in fact without doubt fallen victim to Alzheimer ’s Disease I was devastated although I had suspected it for quite a while. I was quite knowledgeable about Alzheimer’s disease as a result of my involvement as co-owner of a Home for the Age and elder care was one of my specialties. Some time before that I wrote a Guide Book on Alzheimer’s Disease, which was directed at caregivers and relatives of Alzheimer’s sufferers. I decided that I will fight the sickness, instead of the sickness causing a declining of my brain and ultimately a slow death sentence and being in elder care.
