While anyone can fall prey to a scam, many con artists choose to focus their attention on the elderly. Michigan seniors may find themselves the target of any number of scams involving Medicare, insurance, and estate planning. It is important to recognize the signs of a potential scam so you (or a loved one) can avoid becoming just another victim.
According to the Kaiser Family Foundation, nearly 1.9 million Michigan seniors are enrolled in Medicare, the federal health insurance program for people age 65 and older. A popular scam involves a person claiming to work for the government contacting a Medicare recipient and telling them they “need a new Medicare card.” The scammer solicits the victim’s Medicare and Social Security numbers and then uses that information to commit identity theft.
The Federal Trade Commission, which identifies and prosecutes such scams, advises all seniors to stop and contact Medicare directly (1-800-MEDICARE) before giving out any personal information over the phone.
Medicare Billing Fraud
Another common Medicare scam involves nursing homes and other health care providers. Since Medicare reimbursements are based on procedures performed, many providers treat older patients as a license to print money by ordering tests, equipment, and even surgical procedures that are medically unnecessary. Federal prosecutors have identified billions of dollars in Medicare fraud over the years as the result of such procedures.
If you have an elderly relative in nursing or long-term hospital care, it is a good idea to keep records of every procedure performed and the provider’s justification. Also, do not hesitate to ask questions if you suspect a provider is ordering unnecessary procedures. Such actions may assist prosecutors and Medicare officials in identifying fraud.
Estate Planning Scams
The Michigan Attorney General’s office also cautions seniors about the perils of a popular estate planning scam involving annuities. An annuity is a financial product sold by an insurance company. The purchaser makes a lump-sum or periodic payment to the insurer in exchange for receiving future payments.
In theory, an annuity provides a senior with a reliable income stream. But in practice, annuities are not suitable for all investors. There may be significant hidden costs and tax penalties depending on the structure of the annuity. The annuity’s benefits may also not be fully realized for many years, which makes it a poor option for a senior who requires a more liquid investment strategy.
Unfortunately, since annuities are usually sold by brokers working on commission, they may not take your individual needs into account, even though the law requires them to do so. Rather than serve the client, they serve themselves by convincing a senior to sell their existing assets and put everything into a riskier annuity. Some annuity brokers go so far as to sell their products as a form of estate planning, even though they are not attorneys licensed to practice in Michigan.
The best way to avoid such scams is to work with a qualified Michigan elder law attorney who will give you independent advice based on your unique situation. Contact the Law Offices of David L. Carrier, P.C., to schedule a consultation today.