Social Security Checks Being Shortchanged $2 Billion a Year

4 Million Seniors and People With Disabilities Affected

Four million low-income seniors and people with disabilities, who are entitled to have their Medicare premiums paid for by programs established by Congress, are not receiving such help and, instead, are having their Social Security checks slashed each month to pay for those premiums. That is the charge leveled today in a report issued by the health consumer watchdog organization, Families USA.

Shortchanged: Billions Withheld From Medicare Beneficiaries found that the Social Security Administration is withholding approximately $2 billion in annual premiums from Medicare beneficiaries who should have their premiums subsidized through Congressionally enacted programs. For low-income persons living alone, mainly widows and widowers, the amount being lost equals $525.60 per year. For couples, the loss is $1,051.20.

Close to half the people entitled to have their Medicare premiums paid for are not receiving such assistance, according to the Families USA analysis. The report indicates that many low-income seniors and people with disabilities are also entitled to have their Medicare deductibles and co-payments subsidized but are not receiving this help.

"As Medicare costs continue to grow, low-income seniors and disabled persons continue to see their Social Security checks shrink," said Ron Pollack, executive director of Families USA. "If the Social Security Administration is responsible for cutting the checks of these needy seniors each month, it should also be responsible for getting them the benefits Congress and the President established and that they desperately need. "

The following states have the highest numbers of low-income seniors and disabled individuals eligible for payment of their Medicare premiums but are not receiving them: Texas (370,000 to 404,000); Florida (252,000 to 275,000); Ohio (233,000 to 264,000); Pennsylvania (202,000 to 231,000); Illinois (198,000 to 226,000); New York (148,000 to 192,000); Virginia (122,000 to 131,000); Michigan (103,000 to 118,000); Massachusetts (94,000 to 113,000); Washington (99,000 to 107,000); Alabama (92,000 to 100,000); and Georgia (88,000 to 103,000). [Please see the report for more information.]

During the last decade Congress established a number of programs, known as the "Medicare buy-in," to help this needy population:

• The Qualified Medicare Beneficiary (QMB) program, enacted in 1988, is designed to pay the Medicare premiums, deductibles, and co-payments for seniors and disabled persons whose incomes are below the poverty line - $8,292 in annual income for people living alone and $11,100 for couples. The report finds that between 1.9 and 2.4 million of these people, the poorest seniors and people with disabilities in the country, are not getting the benefits they are entitled to receive.
• The Specified Low-income Medicare Beneficiaries (SLMB) program, established in 1990, pays for Medicare premiums for seniors and disabled persons with incomes between the poverty line and 20 percent above that line. The report finds that approximately 1.4 million people eligible for SLMB benefits are not getting them.
• For people with incomes up to 35 percent above the poverty line, a program was established in the Balanced Budget Act of 1997 to expand Medicare premium subsidization. The report finds that as of June 1998, of the approximately 499,000 people funded by Congress to get this aid, only 4,723 individuals - less than one percent - are receiving it.

"Since Medicare premiums will more than double over the next decade," Pollack said, "the withholding of these benefits will result in lower and lower Social Security checks. Unless the problems with enrollment in the Medicare buy-in programs are resolved, the federal government will take an even larger bite out of the meager Social Security checks of widows and widowers in years to come."

According to the Congressional Budget Office, Medicare premiums will increase from $525.60 per year to $1,268.40 in the year 2008.

Families USA cites lack of knowledge about the buy-in programs as the major reason for low participation. Although Medicare beneficiaries must visit a Social Security office to enroll in Medicare, and although the Social Security Administration deducts Medicare premiums from Social Security checks, low-income seniors and disabled persons are not allowed to apply for the buy-in programs at that office. Instead, people are required to apply at state welfare and Medicaid offices. In addition, there are many bureaucratic hurdles that must be overcome to apply for buy-in benefits, including extensive documentation and, in some states, requirements of in-person applications.

"There are some very simple steps that can be taken to ensure that more low-income seniors and people with disabilities don't lose out on these important benefits," added Pollack. "First and foremost, the Social Security Administration should directly enroll low-income Medicare beneficiaries in the buy-in programs at Social Security offices."

Medicare beneficiaries who believe they may be eligible for QMB or SLMB benefits, but are not certain, should call the Medicare Hotline at 1-800-638-6833 for the number of the Insurance Counseling and Assistance Program nearest you. Or, send a self-addressed stamped letter size envelope to Families USA/Shortchanged, 1334 G Street, NW, 3rd Floor, Washington, DC 20005 for a list of the Health Insurance Counseling and Assistance Programs in your state.

Copies of "Shortchanged" are available from Families USA for $15 each. To obtain a copy of the report, send a check or money order, payable to Families USA to:
Shortchanged,
c/o Families USA
1334 G St. NW
Washington, DC 20005

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Families USA is the national organization for health care consumers. It is nonprofit and nonpartisan and advocates for high-quality, affordable health care for all Americans.

1201 New York Avenue NW, Suite 1100 · Washington, DC 20005
202-628-3030 · Email: info@familiesusa.org · www.familiesusa.org