Medicaid Planning

Three-Quarters of Middle-Class Seniors Priced Out of Assisted Living by 2033

Posted on by Alex Kincaid

In general, middle-income seniors have income and assets that make them less likely to qualify for Medicaid. At the same time, they may not have adequate resources to pay for the rising costs of housing and care options they need.

A NORC study done in 2019 and updated in 2022 shows that nearly three-quarters of middle-income seniors in the US will be unable to afford assisted living programs by 2033 without selling their homes. It is the first study of its kind focused on a growing health care crisis.

Data Used in the NORC Study

The researchers examined gender, race, and education and estimated people’s health, cognitive function, and mobility status using the data for these conditions in 2018.

They evaluated financial resources in 2018, starting from actual income and assets. Then grew them based on the historical changes in each category, annuitized across each senior participant’s life expectancy and their spouses.

Data for financial resources included fixed income streams, such as Social Security, and annuitized assets like retirement savings or mutual funds. The study did not assume adult children could provide support. While housing equity is considered, the reality is that some individuals may be reluctant to sell their homes or have a spouse who continues to live there. Also, many seniors may want to keep their homes as a resource to protect against outliving their assets or having a catastrophic medical event.

With 16 million middle-income seniors in 2033 and 11 million over the age of 75, the size of this demographic will double to include the following statistics:

  • Roughly 9.5 million will be unmarried, widowed, or divorced
  • Four in 10 will not have family members living nearby to offer care or support
  • Over age 75, 54% will have three or more chronic health conditions, 56% will have mobility limitations, and 31% will have cognitive impairments
  • Average financial resources of less than $65,000 in income and annuitized assets will not cover health, personal care, and housing services

Even after selling their homes, seniors in 2033 will struggle to pay for assisted living or require additional help from family members. Health limitations will make it hard to live independently. Without government assistance like Medicaid, this creates a significant problem. Clearly, efforts must be made to improve the affordability of long-term care for seniors, particularly for those of lower middle incomes.

What It Means for the Future

Without a long-term care system able to accommodate a more diverse set of older adults and families, only the individuals with the lowest incomes will be provided with care. Others will be reliant on their families.

Combined public and private policymakers should examine healthcare and housing policies to extend funding for in-home care and caregiving support to prevent middle-income seniors from spending down all their assets to transition to nursing homes. And the long-term care industry must offer more affordable senior housing and in-home care options.

An Immediate Solution

Estate planning and elder law services are necessary to prepare for long-term care costs in the future. By starting early, a thorough evaluation of income and assets can provide resources and options over time. Long-term care and Medicaid planning, including using trusts to protect assets from being spent down for care, can prevent your clients from having a financial and medical crisis.

 

Sources:

https://medcitynews.com/2022/09/report-more-than-11m-middle-income-seniors-wont-be-able-to-afford-long-term-care-by-2033/

https://www.norc.org/Research/Projects/Pages/forgotten-middle-housing-and-care-options-for-middle-income-seniors-in-2033.aspx

 

The Basics of Hospice Care and How to Avoid Providers Involved in Medicare Fraud

Posted on by Alex Kincaid

When faced with a terminal illness or condition, more people than ever are choosing hospice care over starting or continuing expensive medical treatments. Hospice care is for patients who choose not to undergo specific treatments or when they are no longer effective. Instead, the focus is on the patient’s comfort and quality of life. Care is received at home or in a facility, such as a hospital or a nursing home.

In addition to supporting the patient’s end-of-life needs, hospice care includes the needs and concerns of the patient’s family. Before opting for hospice care, patients should talk with their doctor and their family. Doctors recommend hospice care when they believe their patient has less than six months to live if their condition runs its course naturally.

The hospice care concept was brought to the United States in the 1960s by an English doctor and social worker named Cicely Saunders. It was designed to allow terminally ill patients to die with dignity in their homes surrounded by their loved ones instead of in hospitals while receiving expensive treatments that weren’t helpful. By the early 1980s, many hospice programs had become available throughout the United States. Recognizing the potential cost savings of hospice care over expensive and ineffective end-of-life treatments, President Ronald Reagan authorized Medicare to cover the costs of hospice care.

Benefits of Hospice Care

The biggest benefit for the hospice care patient is avoiding unnecessary and costly treatments when fighting a losing battle against their illness. Hospice patients can receive care that brings them pain relief and comfort while living their final days in their homes.

Though opting for hospice care means waiving treatment for the terminal illness, it doesn’t mean discontinuing all treatments. For example, if a patient has cancer that is not responding to chemotherapy but is also receiving treatment for high blood pressure, they can choose to start hospice care. Their chemotherapy would cease, but they could continue treatment for their high blood pressure. Hospice patients are less likely to receive medications and undergo tests they don’t need compared with patients without hospice care.

Even after starting hospice care, patients may choose to return to treatment for their terminal condition. They may choose to do this for any number of reasons. For example, they may be expecting a grandchild or great-grandchild. Later, the patient may continue with hospice care.

Medicare pays for some or all hospice care costs, and some private insurance plans may also cover certain expenses. Patients should check with their insurance provider to understand their coverage.

Some Hospice Care Providers are Exploiting the System

What started as a field of medicine primarily handled by nonprofits and charities now has a rapidly growing number of for-profit enterprises. According to a ProPublica article published in November 2022, for-profit hospice providers accounted for 30% of providers in 2000, and now they account for more than 70% of providers. The article states that between 2011 and 2019, the number of hospices owned by private-equity firms tripled.

Since Medicare covers hospice care expenses for eligible patients, providers bill Medicare for their services. Medicare pays hospice providers a set rate per patient per day, regardless of how much care they receive. Under this reimbursement arrangement, providers more interested in profiting from their patients than caring for them are incentivized to have as many patients as possible.

Since hospice patients often choose to live out the ends of their lives in their homes, a significant portion of their care is handled by family members who aren’t compensated for their efforts. Nurses aren’t required to visit more than twice a month. This makes it easy for unscrupulous providers to receive payment for minimal care.

Also, judging a patient’s eligibility for hospice care is difficult. Regulating the hospice care industry is challenging because no government agency wants to be seen as limiting a valuable service. Surveyors are only required to inspect hospice operations once every three years, allowing providers to operate with very little oversight.

A Call for More Oversight

In response to ProPublica’s article, the National Hospice and Palliative Care Organization released a statement condemning fraudulent and abusive behavior by bad actors. The NHPCO asserts that most hospice care providers are committed to the original vision of what hospice care should be: providing relief from suffering as well as comfort and support to people nearing the end of their lives.

In its statement, NHPCO referenced a letter that they, along with other national hospice care organizations, sent to the head of the Centers for Medicare & Medicaid Services (CMS) expressing concern about the rapid increase of new hospice care providers in certain states. Their letter to CMS encouraged the organization to increase federal oversight of their industry and invited them to meet and discuss suggestions for better regulation in this area of the healthcare industry.

Avoiding Hospice Care Providers Involved in Medicare Fraud

Knowing that unethical hospice care providers are out there looking for new patients can make it challenging to find a good provider. However, there are helpful resources.

A simple but effective way of finding a reputable provider is talking with trusted people. A patient’s family, friends, and members of their religious organization are a great place to start. Online reviews can narrow down the selections, along with deeper research on the top choices. Learn whether a hospice provider is a nonprofit or for-profit company, how long they have been in business, and who owns them.

NHPCO has a program called CaringInfo that is a resource for people looking for hospice or palliative care. CMS’s Hospice Center and the National Institute on Aging are other great resources for end-of-life questions.

 

 

Beware of Senior Scams!

Posted on by Alex Kincaid

There are many, many good people in the world.  Some strangers would give you the shirt off their back, folks who volunteer their time to help others in need, and those who hold the door open for you as you are entering a store.  Especially in our tumultuous times, it is important to be kind and generous to our fellow neighbors.  However, with the good must come the bad.  There are scammers out there who prey on various populations, usually ones who are more vulnerable.  Beware of senior scams!

What are some senior scams to be aware of?

The ne’er-do well must somehow get in contact with you in order to scam you.  This would usually be via telephone or the internet, but it can also be in-person contact.

  1. Watch out for fake Facebook friends.

The Better Business Bureau reported that a government grant scam is prevalent on Facebook.[1]  The scammer makes a fake Facebook profile that looks like it belongs to a friend of yours.  The “friend” sends a message to you stating that the “friend” received a government grant of some sort.  Of course, to receive the government grant, you must make an initial investment or pay an application fee.

Lessons:

  • Don’t believe every Facebook profile is real, even ones that look like they belong to a real-life friend.
  • All legitimate federal grants are listed on grants.gov.
  • Government agencies will not communicate with you via social media.
  1. Watch out for scam emails, fake pop-ups, and fake bank transfers.

Some scammers will send out an email stating that you have a virus or other malware on your computer.  In one instance[2], the victim was contacted by a company called Premium Tech Support to clean up his computer.  The victim was quoted a price of $599, which he paid.  The company subsequently told him they accidentally deposited almost $80,000 into the victim’s bank account and asked for the money back.  The victim transferred the funds back to the company, only to realize that the initial transfer of funds from the company into the victim’s bank account was phony.

In another instance[3], the senior had a pop-up window appear on their computer that informed them they had a virus.  The pop-up asked for the senior to contact customer support to fix the issue.  Once the senior called customer support, a representative took control over the victim’s computer to remove the non-existent virus.  Paying to remove the non-existent virus was one part of the scam, but then the scammer also had access to sensitive information.

Lessons:

  • Do some research to ensure you are working with a reputable business.
  • If you think there has been a banking error of some sort, contact the bank to determine the real facts.
  • Don’t give a third-party access to your computer unless you know for sure it is customer support from a company that you contacted.
  1. Watch out for home repair scams

Home repair scams can come in many forms.  The first thing a scammer can do is quote you one cheaper price for work and then demand much more after it is finished.  Another way the scammer can operate is to do repairs that you never requested or agreed to.  Or, the scammer can impersonate a building inspector and demand immediate repairs.  Some scammers will up their fear game by telling you that they will put a lien on your home if you don’t agree to what they offer.

Lessons:

  • If a stranger comes to your home seeking to do repairs, tell them you want to get other estimates. This will give you time to see if the company is whom they say they are. Legitimate companies shouldn’t have a problem with you getting other estimates.
  • If you aren’t interested in the product or service, then don’t feel bad saying no. It is your choice!
  • If you tell the scammer “no,” then they will oftentimes try to throw in a last-minute “deal.” Please, don’t fall for it!
  1. Watch out for romance scams

Seniors are vulnerable to loneliness, especially in light of COVID-19 restrictions.  Since you may not be able to go to the places you would normally go to meet people, you may turn to the internet to find companionship.  And there are many legitimate websites to find love!  However, some scammers will create fake dating profiles and try to lure you into a relationship.  Then, the scammer can ask for money, sensitive banking information, or gift cards.

In one instance[4], the scammer talked the senior into doing an illegal act.  The senior went to China to meet her paramour, whom she had met online.  He was mysteriously unavailable to meet when she arrived, but some of his “friends” asked her to take a backpack full of the paramour’s clothing back to Australia.  The backpack contained drugs, unbeknownst to the senior.  After taking the backpack through airport security, she was arrested and sentenced to death.

Lessons:

  • Don’t rush into any relationship.
  • If the person cannot be available to video chat, they may not be who they say they are.
  • Do an internet search of the individual’s name and profile pictures.
  • If an in-person meeting occurs, do so in a public place.
  • Definitely don’t send any money to someone unless you are confident it isn’t a scam.

Why don’t seniors report being scammed?

Unfortunately, many senior scams go unreported.  Between 2 and 3 million seniors get scammed every year.[5]  However, on average, only 1 in 44 cases is reported.[6]  But why?  One reason is that many seniors are embarrassed that they were scammed.  They think that others will think them unfit and may even “put them in a home.”  Another reason financial exploitation isn’t reported is the perpetrator is a family member, and the senior doesn’t want to see them get in trouble.

Where can you go for help?

If you or a loved one thinks they have been the victim of a scam, there are ways to get help.  You can call your local police department or call 1-800-677-1116 to reach the Eldercare Locator. This government-sponsored national resource line helps folks find contact information for Adult Protective Services in their area. Here are some more resources to keep handy:

FBI’s Internet Crime Complaint Center

Federal Trade Commission

National Institute of Justice

National Adult Protective Services Association

[1] https://www.bbb.org/globalassets/local-bbbs/cleveland-oh-78/cleveland_oh_78/senior-alerts/government-grant-scammers-using-your-friends-facebook-profiles.pdf

[2] https://www.bbb.org/globalassets/local-bbbs/cleveland-oh-78/cleveland_oh_78/senior-alerts/brook-park-man-loses-$80000-in-tech-support-scam.pdf

[3] https://www.bbb.org/globalassets/local-bbbs/cleveland-oh-78/cleveland_oh_78/senior-alerts/fraudsters-charged-in-$10-million-tech-support-scheme.pdf

[4] https://www.bbb.org/globalassets/local-bbbs/cleveland-oh-78/cleveland_oh_78/senior-alerts/from-love-to-jail_-romance-scams-and-money-mules.pdf

[5] https://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2017.303821

[6] https://www.napsa-now.org/get-informed/exploitation-resources/