Senior citizens generally juggle paying for their living expenses with a modest, fixed income so that inflation, rising health care costs, and unexpected expenditures severely impact them. Many are barely keeping their heads above the water in today’s economic crisis. Careful planning and disciplined spending are especially critical at a time in their lives when organization and critical thinking abilities may be diminishing. As caregiver, you may need to step in and help.
Locate Important Documents
From your parents’ standpoint, handling finances is a sign of independence and continued mental capability, so it may be a sensitive area to delve into. Somehow, you’ll need to break into the topic of finances with your parents: You need to know what they’ve got and where they’ve got it.
- Begin with an “I” statement to enter the conversation: “Dad, I’m concerned that today’s economy could cause you problems.” That could lead to, “What kind of bill-paying system do you have? Maybe I could help make that easier for you.”
- Explain that, in the case of an emergency, you need to know where they keep important documents: You’re just asking your parents to share information that you might need someday.
- You can ask specific questions about particular documents:
- “Mom, where is your marriage certificate (or birth certificate)?”
- “Do you have a will or trust that we should know about?”
- “Dad, where are your military records, Social Security card, or pensions papers?”
- “How much is your current Social Security benefit check?”
A search for a few particular documents can lead to a more in-depth search for the remaining records dealing with insurance, real estate, and finances. If your parent doesn’t know where these documents are, ask if he/she minds if you go through papers, desk drawers, boxes, etc, to gather everything into one place.
AARP offers a worksheet to use when gathering important documents.
Evaluate the Current Financial Situation
Once important papers have been located, sort through them, organize them, and set up a bookkeeping and storage system that is clearly labeled. By now, you should have a sense of your parent’s true financial state so you can identify their needs.
Offer Guidance for Getting Financial Help
If your parent is having trouble paying for the essentials, such as food, utilities, or health care, there are a number of benefit programs available to those who qualify for financial help. These programs are designed to supplement your parent’s household budget, thus relieving some of the financial pressure and reducing anxiety about the future.
Remember, caregiving is not about taking control or having to support your loved ones with your own assets; it’s about helping those you love make decisions to improve their own circumstances. As long as parents are of sound mind, they should be in charge of their own finances. This may be a sensitive area for them, so reassure them often that you are there to help, not to take over.
A national health insurance program for people age 65+, and younger people who have disabilities. It has several parts with different benefits:
- Part A − Covers hospital care, limited nursing home, limited home health services, and hospice care. Usually no premium, but an annual deductible and coinsurance payment is charged.
- Part B − Covers doctors’ services and outpatient hospital care. A monthly premium deducted from your parent’s Social Security check, plus an annual deductible and coinsurance of 20% of the approved charges.
- Part C (Medicare Advantage) − Medical and hospital coverage, and sometimes prescription drugs, through an approved network of providers (similar to an HMO).
- Part D − Prescription drugs. Monthly premiums deducted from Social Security check or directly billed, plus an annual deductible and coinsurance (or co-pays, depending on the plan).
- Part D “Extra Help” − Assists people with Medicare who have limited income and assets. Provides continuous drug coverage throughout the year and pays for most Part D premiums, deductibles, and co-payments. To apply, use Social Security’s online application.
An online newsletter addresses medicare rights .
The “Doughnut Hole” Calculator
More than 3 million Medicare Part D beneficiaries risk falling into a drug-coverage gap called the “doughnut hole.” This occurs after the maximum dollar-amount of coverage for prescription drugs is reached ($2700 in 2009) and before the maximum out-of-pocket expense ($4350 in 2009) has been reached. While in the gap, enrollees pay 100 percent of their medication costs, in addition to the monthly premiums they are already paying. If your parent falls into this category, he/she may have great difficulty meeting their financial obligations and be forced to cut back in other areas in order to afford their medication.
To offset the effects of the gap in coverage, help your parent use the “doughnut hole calculator” to find the best, lowest-cost, safest, and most effective medications. Go to the website and type in the drug your parent takes, along with his/her zip code.
A federal and state health insurance program for people with limited resources, the disabled, and in some cases, grandparents acting as guardians of grandchildren. Eligibility criteria and covered services vary by state. Contact information for state Medicaid offices is on their website. You can also Google your parent’s State Department of Social or Human Services, or call the Centers for Medicare and Medicaid Services at 800-633-4227 to request a local phone number.
Medicaid Dual Eligibles
Helps pay out-of-pocket Medicare costs for those with limited income and assets. These benefits are sometimes also called Medicare Savings Programs (MSP). Check online or call the Centers for Medicare and Medicaid Services at 800-633-4227.
Program of All-Inclusive Care for the Elderly (PACE)
The PACE model addresses the needs of long-term care clients, providers, and payers. For most participants, the comprehensive service package permits them to continue living at home while receiving services rather than be institutionalized. Capitated financing allows providers to deliver all services participants need rather than be limited to those reimbursable under the Medicare and Medicaid fee-for-service systems.
A national retirement program providing monthly income for age 62 and older who have paid Social Security taxes for at least 10 years, or for those who meet certain strict disability and eligibility requirements. To apply, visit your parent’s local Social Security office or call 800-772-1213.
Supplemental Security Income (SSI)
A national program that pays monthly income benefits to age 65 and older, as well as to the blind or disabled who have limited resources. Some people qualify for both Social Security and SSI benefits.
State Health Insurance Assistance Programs (SHIPs)
A state program that provides clear, objective, and precise information, counseling, and assistance on a wide range of health insurance issues: Medicare, Medicaid, long-term care, and prescription drugs. SHIPs are staffed by well-trained professionals and skilled volunteers. They’ll ask detailed health and income questions − all confidential − to determine which programs your parent may be eligible for.
A national program that distributes coupons or an electronic card (similar to a credit card) to people with low income to buy food. The quantity of benefit depends on the applicant’s income, assets, expenses, and number of household occupants. To apply, visit your parent’s Department of Social or Human Services.
Low-Income Energy Assistance Program
Helps with heating and cooling bills and provides money to make homes more energy efficient.
Additional Benefit Programs
State and local government agencies, as well as nonprofit organizations, offer a variety of programs to help older people with limited finances. Possible programs include:
- Free or reduced-cost home repairs
- Groceries distributed from food pantries
To locate these programs and more, contact or visit:
- The local Area Agency on Aging (AAA)
- The Eldercare Locator (800-677-1116)
- Benefits QuickLink on the AARP Real Relief page
- BenefitsCheckUp, an easy-to-use site to identify national and local charitable programs
Helping with Prescription Costs
With the cost of prescription drugs skyrocketing in recent years, paying for multiple medications for a chronic condition such as arthritis, sometimes in conjunction with other health conditions, can be daunting for senior citizens on limited incomes. However, with a little effort, you can help your parents find medicines at discounted prices. Here are some suggestions:
- Compare prices at different pharmacies
- Use generic drugs whenever possible
- Consider a prescription discount card − a card purchased for a nominal fee (renewable each year), and each prescription thereafter receives a percentage discount
- Fill prescriptions on your pharmacy’s website, where prices are often lower
- Use mail-order pharmacies
- Look for Prescription Assistance Programs (see below), which requires strict income eligibility
Using Mail-Order or Online Pharmacies
While you can save significantly by purchasing prescriptions from mail-order or online pharmacies, it is prudent to take a few precautions:
- Choose a pharmacy that has a toll-free phone number and street address displayed.
- Reputable pharmacies will require that either you mail them the actual prescription or your doctor’s office faxes it directly. If they only require you to fill out a questionnaire in order to obtain prescription drugs, they are not legitimate.
- Choose a pharmacy that gives you access to a licensed pharmacist, at no charge, when you have questions about the medications.
- If you have a problem with an online pharmacy, report it to the National Association of Boards of Pharmacy.
- Complain to the Food and Drug Administration (FDA) about a website that may be selling prescription drugs illegally.
- If you receive an email from an online pharmacy promoting suspicious products, forward the email to firstname.lastname@example.org .
Patient Assistance Programs (PAP)
If your parent has no health insurance, has limited insurance, or lacks drug coverage under the current health insurance policy, he/she may be eligible for free or reduced-cost prescription medicine. These programs target people with low household income:
- Below $20,000 for an individual
- Below $26,000 for a couple
- Below $34,000 for a family of three
- Below $40,000 for a family of four
Some programs extend to people with higher incomes if they have no health insurance or drug coverage and are not eligible for either private or public insurance. Most PAPs have some flexibility and will take individual circumstances into consideration.
Other qualification criteria includes:
- Limited non-income assets − stock holdings, mutual funds, retirement savings, savings accounts. (Generally, if assets exceed $15,000 to $20,000, PAP will not be offered.)
- U.S. citizen or resident with a green card
- Ineligible for Medicare Part D (though some benefits are available during the waiting period before Part D takes effect)
- No other coverage for drug expenses
- Ineligible for Medicaid (although some benefits are temporarily available while waiting for Medicaid eligibility determination)
If your parent qualifies for PAP assistance, his/her drugs may be picked up at the regular pharmacy, received in the mail, or picked up from the doctor’s office, depending on the particular PAP program. Other guidelines vary as well, but most PAPS will limit the quantity of drugs dispensed to an individual, and some programs require periodic updates about employment and income status for refills.
Where to Start
- Doctors − Since the doctor’s signature is needed for PAP programs, this is a good place to start asking questions. Unfortunately, a substantial amount of paperwork is involved in the application process, and your doctor’s staff may not be willing to assist with that.
- Pharmacists − Those who work for drug store chains or large department stores that sell medicine, may not be at liberty to discuss PAP because of a conflict in business.
- Health and Community Clinics − Clinics that serve people who have no health insurance often provide information about PAPs. Many will even help begin the process.
- Drug Companies − Corporate websites for major pharmaceutical companies provide a link to their PAP programs. If you know the company that makes the drug or drugs being prescribed, you can contact them directly by internet or telephone.
The Best Websites for Prescription Assistance
RxAssist − User-friendly website that offers a comprehensive list of PAPs, searchable by both drug name (generic or brand) and company name. Has a resource section with information on Medicare Part D, Veteran’s benefits, PAPs for generic drugs, and state drug assistance programs.
The Partnership for Prescription Assistance − An industry-sponsored website with links to 475 public and private PAPs, including 180 sites sponsored by drug companies and searchable by drug name. Also includes a simple eligibility screening questionnaire, links to forms needed for full eligibility screening, and a useful listing of low-cost community health clinics, searchable by state and city. Likely to have the most up-to-date information and downloadable forms. You can also call 888-4PPA-NOW (888-477-2669). Caution: Discount card programs may only save 10 to 20 percent of the cost at a participating pharmacy.
NeedyMeds − Website sponsored by a non-profit company and supported by luring advertisements that are best ignored. Provides links to 386 PSP programs and lists about 3,000 drugs, both brand and generic, in addition to a listing of 200 state programs and disease-specific PAP programs. Links to drug names, companies, and programs by alphabetical letter, and includes a clickable map of the country with names of national and local programs to help you apply.
Together Rx Access Card − A consolidated discount card offered by about a dozen drug companies and covering about 300 widely used medicines. To be eligible, annual income must be under $30,000 for an individual and $60,000 for a family of four. 25 to 40 percent savings.
Protecting Against Scams
Besides the potential for diminishing critical-thinking skills as they age, senior citizens are generally more innocent-minded and trusting of others. For these reasons, con artists and scammers prey predominately on the elderly. And when the economy is poor, they become even more creative and persistent with their schemes.
Here are a few of the many scams out there:
- Predatory lending − An up-front fee is required for a bogus loan.
- Phishing −A fraudulent email from a “bank,” “internet provider,” etc, asks for verification of an account number or password to gain credit card or bank information.
- “Credit repair” services – For a fee, your loved one’s credit will magically improve.
- Fundraising letters from Africa − Contributions are collected but not applied to a charity.
- Home repair fraud − Payment or partial payment is required up-front; then no services are performed.
- Tax refund-anticipation loans − Swindlers charge high fees and then don’t deliver the tax refund in a timely manner.
- Grandparent scams − A “grandchild” calls asking for money for an “emergency.”
- Pet scams − Scammers pretend to collect money for the adoption of animals in foreign countries.
- Reverse mortgages − Older homeowners are convinced to commit to a reverse mortgage with unfavorable terms.
- Customer survey scams − Someone claiming to represent a reputable company says his/her firm will pay for completing a survey, and then ask for a credit card and pin number so the company can “credit your account.”
- Rent-to-Own contracts − One missed payment requires that your loved one forfeit all previous payments and surrender the rented goods.
- “Free lunch” scams − People are offered a free meal to listen to bogus investment pitches presented by high-pressure salesperson.
Actions You Can Take
To prevent loved ones from being taken advantage of, and possibly being ruined financially, you need to stay abreast of the latest scams and make your parents aware of them. You can begin the conversation by saying you love them and don’t want to see them misled.
- Stay in touch with your parent so you understand their needs and worries. If you know there’s a broken latch or light switch that’s not working, you can assume your parent may be more easily led into a home-improvement scam.
- Help with repairs yourself, or make arrangements for a reputable contractor to do the work. AARP’s Certified Aging-in-Place Specialist program can locate a professional who understands aging issues and is especially suited to work for the elderly.
- Explain to your parent how various con jobs work and what to watch for. Encourage him/her to inform you of all solicitations.
- Insist your parent calls you anytime his/her suspicions about a person or activity are raised. Then offer your advice and/or report the dubious activity to the police.
- If your parent is tricked into a fraudulent situation and is losing money, work with local and state authorities to report the incident, terminate the scam, address the wrongdoing, and possibly reimburse the lost money.
Precautionary Advice to Give Your Parents
- Never say “yes” on a first call or visit. The pressure to “sign today” is a red flag, no matter what the particular sales job is.
- If you’re interested in the service or product, ask questions. The more you know, the more informed your decision will be, and the answers will help indicate the legitimacy of the salesperson.
- Ask yourself if the product/service is something you really need. Had you thought of repairing the driveway before you answered the telephone or door?
- Ask the salesperson to leave literature showing the features of the product/service and specifying the terms of the agreement. If they have no literature to leave, ask them to mail it to you or drop it by later. When salespeople refuse to provide written information about what they’re selling, that’s another red flag.
- After the salesperson leaves, research the product and the company. Use the literature to make comparisons with the competition.
- Consult family and friends you trust for their point-of-view about the offer.
- Evaluate and make a decision. For most unsolicited offers, the best answer is a directly-stated “no thanks.” However, if you decide to accept the product or service after doing your homework, you can feel confident that you’re not being duped by a con artist.