Who Uses Peer-to-Peer Lending?

Many members of the same families have used peer-to-peer lending to lend and borrow money from each other.  Borrowing money may appear to be a simple transaction at first, but it can quickly become a nightmare.  Facilitators who are experienced with peer-to-peer lending will help with taxes and work to keep the loan separate from the family relationship.  Although family loans are common, any peer-to-peer loan transaction can occur without any previous relationship between the parties.

Peer-to-peer facilitators ensure that the loan is documented properly.  They take as much of the headache out of the loan process as they can.   A facilitator may also offer automatic payments so that the loan can be repaid without a question about the day it is due.

Pros of Peer-to-Peer Loans:

One benefit of peer-to-peer loans is that they can be used for almost any financial need.  This type of loan may be used instead of a second mortgage or a traditional bank loan because set-up fees and other fees are generally minimal.

Another benefit is that these loans require much less paperwork than traditional bank loans.  This eases the burden on the borrower to fill out a huge stack of forms and provide many documents before the loan can be funded.

Lower interest rates are another reason that borrowers choose peer-to-peer loans over traditional financing.  Low interest rates help both borrowers and lenders save a considerable amount of money.

Lenders benefit from peer-to-peer loans because they provide yields that aren’t available with traditional savings accounts or other low-risk investment options.  People who lend out their money themselves cut out the middleman, which allows them to make more in interest without having to charge a higher rate.  Even lenders who work with a facilitator typically earn more than they would through bonds, CDs or other investments.  They also get the psychological benefit of knowing they are helping out someone in need.

Cons of Peer-to-Peer Loans:

One con of peer-to-peer lending is that the lender may have to take a loss if the loan is not repaid.  The lender is also responsible for collecting the loan unless they use a loan facilitator to handle the paperwork and collection process.  Having to collect money from a family member is not something that most people enjoy, so using a loan facilitator is usually worth the cost just to have someone else doing the collecting.

Peer-to-peer loans are not insured like many other investments, so even the initial investment is at risk if the borrower defaults on the loan.  The best way for lenders to protect themselves against default is to lend a small amount of money to several borrowers instead of lending a large amount of money to a single borrower.  It is considerably less likely that many people are all going to default on their loans.

No investment is without risk, and many boomers have found that peer-to-peer lending is a wonderful way for them to help out people that they know or don’t know and make money at the same time.  Anyone who is considering using peer-to-peer lending as an investment should talk to their financial advisor about their unique financial situation before deciding if this investment is right for them.  Most lenders benefit greatly from having a peer-to-peer loan facilitator help them through the paperwork and handle the collection process for them

Why Do Families Argue After Their Parents Are Gone? Six Ways To Avoid This Problem – EzineArticles.com/6371973 #inheritance

— KeithD. Maderer (@kdmaderer) June 13, 2013

2. Barbara McVicker is a caregiving expert focusing on financial, emotional & physical stress of caregiving, (as well as elder care benefits & the work-life balance). She’s also a public speaker on the subject matter. Barbara is from Columbus, Ohio and has over 4,600 followers.

If you need to take away the car keys, consider help from a third party. #caregiving #eldercare conta.cc/11EPMCW — Barbara McVicker (@BarbaraMcVicker) June 5, 2013

3. Denise Brown is a caregiving author, speaker and caregiving coach. She also founded CareGiving.com a website dedicated to assisting families with caregiver stories and solutions. Denise has over 12,000 twitter followers.

Tonight at 8 pm ET: Three family caregivers tell stories. Watch here: ow.ly/m0urz — Denise M. Brown (@caregiving) June 13, 2013

4. Carol Bradley Bursack is a columnist, author, consultant and speaker. She wrote the book “Minding Our Elders” (hey that would make a good twitter handle…) and has appeared as a resident caregiving expert in her many media appearances. Carol has over 2,900 followers.

Siblings Who Refuse to Help with Parent Care #caregiving @agingcare ow.ly/lUDyo

— mindingourelders (@mindingourelder) June 11, 2013

5. Dr. Bill Thomas is an author, entrepreneur, musician, teacher, farmer and physician whose life’s work explores the terrain of human aging. Dr. Thomas founded a global non-profit (The Eden Alternative) which works to improve the care provided to older people. Our favorite quote pulled from his website ““What we need is a radical reinterpretation of longevity that makes elders (and their needs) central to our collective pursuit of happiness and well-being.” If that by itself doesn’t implore you to follow him… nothing will. Dr. Bill has over 3,000 followers.

#aging can help us see with our eyes closed. What we call experience is really a type of vision. It is our past that lets us see the future

— Dr. Bill Thomas (@drbillthomas) June 11, 2013

The new Philips GoSafe product is the latest in a line of newer mobile medical alert systems which uses the same cellular signal as your cell phone.  Instead of being tethered to a home phone-line, the consumer can take these new devices with them wherever they go (out to work in the yard, to the mall, or to a doctors appointment).  This new mobility feature is what separates the new mobile devices from their traditional (tethered) cousins.

IF Philips is able to bring this device to market soon, they could have a big advantage over their competition.   Healthcare strategist and Senior List co-founder Chris Clark commented on a likely (Philips) go-to-market strategy; “Philips should be able to take advantage of their huge installed-base, and segment that market into home-based vs. mobile candidates.  The perfect plan would be to execute an upgrade strategy for the mPERS candidates in their existing customer pool in-conjunction with going after new customers.”

Philips now anticipates putting the new GoSafe device in consumers hands this fall.  It will be fun to see these new mobile players duke it out for market share in the lucrative mPERS space.  If only they could get to market!

The new mobile personal emergency response systems (mPERS) are not tethered to a land-line like traditional in-home devices.  They operate on the same cellular signal that mobile phones do, offering mobility anywhere there is a cell signal.  Here are a list of popular models available today.  Note that monthly plans were selected based on the least expensive month-to-month price plan and NOT based on quarterly or annual contracted rates (which many providers may promote).  These prices and plans change regularly, so be sure to check the websites thoroughly before purchasing.  The Senior List recommends that you READ THE TERMS & CONDITIONS before purchasing (just as we have done).  This can be a painful process, but doing so can save you a lot of headaches down the road.  If you have questions, be sure to call the provider’s customer service line to get answers.  If you are promised something (like no-questions-asked-return at anytime) by the customer service operator, GET IT IN WRITING before committing.

A few notes about the table (above) and its contents.  Depending on the type of plan(s) you select, you may be able to reduce the cost of the equipment and/or your monthly costs.  However this is likely to place you in a long-term contract.  For example, Verizon Wireless will allow you to purchase the SureResponse device for $19 IF you are willing to enter into a 2 year agreement.  Similarly, a number of providers will offer a 1 or 2 year agreement (with payment up-front naturally) and reduce your overall monthly costs during the term of the agreement.  We don’t like long-term agreements (for a lot of reasons) but it may be suitable for your individual situation.  Just like anything, you have to make the best choice for you or your loved one.  We’re just trying to make the process a little easier.

We’ve also taken the liberty to make some recommendations based on customer feedback (click here to see reviews of medical alert system providers as well as consumer comments that follow each article).  We also looked closely at the following criteria; Transparency of acquisition costs, ease of use (of website), knowledge of customer service personnel, fees, excessive charges, long-term agreements, return policies, and more.  Our recommendations are also likely to change as some of these players get their acts together.  (For example one of the providers listed below had a link to Terms & Conditions that was inaccessible.)  Also, The Senior List staff does reach out to providers occasionally to ask questions, and advocate on your (the consumer’s) behalf.  We DO take into account a providers willingness to provide exceptional customer service, and we’ll continue to work with them to get better.

At this time, The Senior List has NO affiliate or re-sale relationships with any medical alert system providers (mobile or traditional PERS).

A recent notification (issued today) from the Oregon Attorney General got our attention.  It’s entitled “Hang Up On Medical Alert Imposters”.  Read the alert below:

If you’re having trouble reading the notification above, it says; “The recordings sound like a real person claiming that either someone has purchased a Life Alert system for you, or that you qualify for a free Life Alert.  Others may say they are calling from a shipping department to confirm a free order to send you new Life Alert equipment.”  Anytime you hear from someone (particularly a recording of someone) unsolicited on the telephone, red flags should be going up… Life Alert has confirmed the calls are indeed fraudulent.

If you’re a responsible adult (and I know you are) you should be aware of the right way to dispose of your old or expired medications in the home.  The FDA has guidelines for this incredible accumulation of beta blockers, ACE Inhibitors, anti-inflammatory meds, ibuprofen, that expire in our drawers or medicine cabinets.

How big of an issue is this you ask?  Well, just know that you’re not alone in your hoarding of expired meds… On April 27th the government sponsored a “National Take-Back Initiative” at 5,829 locations around the country.  During this single event, more than 742,497  pounds (or 371 tons) of prescription medications were recovered and properly disposed of.  We’re talking big-time pill poundage folks!  The DEA has sponsored 5 previous Take-Back Initiatives and all combined, more than 2.8 million pounds (1,409 tons) of medications have been removed as a potential threat to consumers.

Expiration dates do matter when it comes to the medications in your cabinet or drawer.  If your medicine has expired, the chemical composition of that drug may have changed leading to a weaker effect, stronger effect or no effect at all.  The FDA has put together a consumer alert video noting the importance of expiration dates (see below).

There’s been a bit of controversy regarding flushing certain medications down the toilet when disposing of them.  Some environmental organizations note that trace amounts of certain chemical may leach into organic material or appear back into our water supply.  Regardless, if you cannot get rid of your expired drugs at a DEA sponsored Take-Back event, the FDA recommends flushing certain drugs down the toilet (or down the drain).  This list is part of a risk mitigation strategy which balances the risk of (access to) these  drugs in the home, with environmental concerns.  Right or wrong, they’ve concluded that some drugs are flush-worthy (thank you Elaine Benes).

For those drugs that aren’t on the flush-list, the FDA offers these suggestions for drug disposal in the home: “Mix medicines (do NOT crush tablets or capsules) with an unpalatable substance such as kitty litter or used coffee grounds.  Place the mixture in a container such as a sealed plastic bag and throw the container in your household trash.  Before throwing out your empty pill bottle or other empty medicine packaging, remember to scratch out all information on the prescription label to make it unreadable.” 

The best scenario for drug disposal is to take your unused medications to a National Take-Back Initiative event.  You can follow upcoming events by visiting the U.S. Drug Enforcement Administration’s website for information on National Prescription Drug Take-Back Events.

The growing population of Boomers retiring, and seniors requiring long term care services is creating enormous pressure on the system and an urgent drive to find new private pay solutions.  One private pay resource that is on the rise is converting life insurance policies into Long Term Care Benefits.  Millions of seniors own life insurance policies that they are in danger of abandoning without realizing they could quickly and easily convert the policy into a monthly Long Term Care Benefit Plan.  These Benefit Plans will pay for any form of long term care service including homecare, assisted living, and skilled nursing care; and any type of life insurance policy will qualify for conversion.

Private Pay Solutions Emerge

The long term care industry has been quick to embrace this concept and today thousands of assisted living communities, nursing homes and home health companies accept this funding method.  Political leaders too have begun to realize the cost saving implications for their beleaguered Medicaid budgets by extending the time a person could remain private pay before becoming Medicaid eligible through the conversion of a life insurance policy as an alternative to abandoning the policy through lapse or surrender.

Medicaid is a government program designed to help cover health care costs for the indigent (poor), disabled and children and/or dependents.  The eligibility process is determined by asset and income levels that would measure an applicant as being below the poverty level.  One of the assets that will count against a Medicaid applicant is a life insurance policy.  The owner of the policy must surrender the policy for any cash value and spend it down on care, or if the policy has no cash value and the owner keeps it the estate will be subject to federally mandated asset recovery probate action against the death benefit collected by the estate to claw back all Medicaid expenditures.  Because of this reality, financial planners, elder law attorney’s and geriatric care advisors have provided seniors and their families with the default guidance that in the case of ownership of life insurance policy (not including funeral policy exemptions), a life insurance policy still owned by the senior inside the 5 year look back period should be abandoned.

Political Support Arrives Just in Time

States are now coming to the realization that there is a much higher value found through the conversion of a life policy that can be deployed to extend private-pay as a Long Term Care Benefit Plan.  Any owner of a life insurance policy has the legal right to convert it into a Long Term Care Benefit Plan.  In 2010, the National Conference of Insurance Legislators (NCOIL) passed a national consumer protection model law that would mandate life insurance companies must disclose to policy owners about their legal right to convert their life insurance policies instead of abandoning them via lapse or surrender.  The life insurance industry opposes anything that would discourage policy owners’ from abandoning their life insurance (because life insurance companies make huge profits off of seniors that have paid premiums for years and then abandon their policies in the last years of their life).

Since passage of the NCOIL national model law; legislation has been introduced in numerous states to empower Medicaid departments to educate citizens that the conversion of their life insurance policies is their legal right and a better option than abandonment of their policies.  As of May 2013, the states of FL, TX, KY, LA, and ME have introduced this legislation and numerous other states are preparing to introduce the same bill for enactment.  Over the course of this year and next, people will continue to become more aware of their option to convert a life insurance policy to pay for long term care.  All across the country the long term care industry and political leaders are looking for private pay options that not only help people pay for long term care, but save the tax payer money by delaying Medicaid eligibility.

Three Clear Winners

The policy conversion option is a clear winner for seniors and their families; providers of long term care services; and for tax payers in every state:

1.     The policy owner and their family are able to convert a life insurance policy and use the proceeds in a Medicaid qualified spend-down to extend the time they are private pay before moving to government assistance.  This allows freedom to choose the form of care they want, as well as financial control and dignity for themselves and their families.

2.     Providers of long-term care services benefit because they are operating under extremely thin margins and private pay dollars translate into higher quality services for everyone under their care.

3.     The longer a person can remain private pay before becoming Medicaid-eligible, the more budget/tax savings for the citizens of every state in America.

Here’s hoping this video inspires you and yours to pay-it-forward. Enjoy!

My husband was able to experience this with his grandfather many years ago.  His “Grandpa Joe”, a WWII veteran was dying of cancer that had spread extensively throughout his body.  He had been in and out of the VA in Spokane Washington… On and off chemotherapy…  And finally in his late 80′s he had had enough.  Weeks before he went into the VA (his final visit) my husband and his brother drove up to Spokane to spend some time with Grandpa Joe.  It was unlike any other visit they’d ever had.  The normally rough-and-tough Joe was extremely frail but still relatively lucid.  On this visit, Joe would open up about the war (he rarely if ever spoke of his year of grueling service as a medic in the war overseas), and Joe even initiated a discussion about what each grandchild had meant to him during his adult life.  Joe knew this was indeed the last visit he’s have with his grandsons.  Though I’m told the tears were at full flood stage, each of the boys (then in their 30′s) were able to share their favorite memories and thank Joe for being such a wonderful grandfather and friend over the years.  They also both (literally) said goodbye to Grandpa Joe one last time…

Being able to say goodbye, can be an incredible rewarding and fulfilling experience.  In her article, Betty Londergan calls being with a parent while they’re leaving this world “the great privilege”, and I must say I totally agree.  As a social worker, I’m around families dealing with these issues on a regular basis.  Some are good at it, and some not so much.  Most people know that in life there are no guarantees, so it’s important to take the opportunity to tell your loved ones how much they mean to you.  Tell them you love them while you have the opportunity to do so in this life.  It will eliminate (or at least minimize) the “I wish I would have” notions, or the “I should have told them what they meant to me” regrets.

Have you had the “privilege” to say goodbye a loved one before they passed on? How did it go?  What would you do differently?  -Share your thoughts in the comments below

For many patients, this meant a scramble to find alternative care settings, or arranging services to be brought into their homes for the transition.  No one was happy to see me walk in the door with that letter.  It meant that Medicare had given up on them, at that particular juncture, with that particular injury.  Some would appeal our decision, but it was rare that the ruling would be in their favor.  The saddest cases were those who had some form of dementia along with their diagnosis that landed them with us (broken hip, stroke, etc…).  These folks simply could not follow the instructions given to them in order to make progress/improvement with their injury.  Typically they were discharged just a week or two after admission, and they were the lucky ones!  They had straight Medicare, not an HMO or they would have been shown the door earlier… But that’s for another post.

So, it is with great pleasure to have learned about a recent ruling that will have an immediate effect on this process.  A federal court settlement in Jimmo v. Sebelius has been approved.  New policy provisions will state that skilled nursing and therapy services necessary to maintain a person’s condition can be covered by Medicare.  This replaces the “improvement standard” that providers have subscribed to for years.  

According to Medicare Advocacy.org “CMS will undertake a comprehensive nationwide Educational Campaign to inform health care providers, Medicare contractors, and Medicare adjudicators  that they should not limit Medicare coverage only to beneficiaries who have the potential for improvement.  Instead, providers, contractors, and adjudicators must recognize “maintenance” coverage and make decisions based on whether a beneficiary needs skilled care that must be performed or supervised by a professional nurse or therapist.”   

To break it down, Medicare recipients can’t be kicked off skilled services (therapy services such as PT, OT, etc…) simply because they aren’t making significant improvement.  In the case of the Medicare recipient with dementia and a fractured hip, he/she will now receive therapy services despite the dementia diagnosis until the hip is treated to maintain his/her current condition and to prevent further decline.

“Lawyers for the beneficiaries say the settlement could help people with chronic conditions like Alzheimer’s, Parkinson’s, multiple sclerosis, strokes, spinal cord injuries and brain trauma. Often the prospects for improvement are slim, but there are ways to slow a patient’s deterioration and help the patient to live long enough to take advantage of new treatments as they are developed.” New York Times

While substantial costs are expected to be added to the Medicare program because of these changes, there may also be savings realized if recipients can receive therapy services in their homes.  The increased therapy should also keep these patients out of more costly settings like hospitals and nursing facilities and keep readmission rates low.

To learn more about the settlement, or if you would like to appeal a past decision made by a Medicare provider, the article from the Center for Medical Advocacy has many helpful links and resources.