Medicare Premium Withholding From Social Security Payments Still Problematic, GAO Report Finds

Main Category: Medicare / Medicaid / SCHIP
Article Date: 15 Aug 2008 - 3:00 PDT

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Some Medicare beneficiaries still are having incorrect amounts withheld from their Social Security checks for Medicare Advantage and Medicare prescription drug benefit premiums, but the programs have made significant improvements since 2006 in matching their databases to deduct the correct amounts, according to a recent Government Accountability Office report, CQ HealthBeat reports. MA and the drug benefit -- known as Medicare Parts C and D, respectively -- were created by the 2003 Medicare law and broadened private insurerss role in the Medicare program.

The report states that the introduction of MA and the drug benefit added about 800 different contracts with more than 6,000 plans and multiple payment options. This confusion led to some beneficiaries having too much money taken out of their Social Security checks, while others having too little taken out. According to the report, monthly premiums for Medicare Part B "is a standard amount for most [beneficiaries] and is based on a standard calculation for others," while "the monthly premium amounts for Parts C and D vary widely by plan." GAO found that Medicare and Social Security have improved their collaboration on deductions since 2006, but SSA still rejects about 5% of Medicare's premium deduction requests. The Social Security Administration in 2006 rejected 44.5% of Medicare's requests for premium deductions, according to the report.

Senate Finance Committee Chair Max Baucus (D-Mont.) on Wednesday said, "Paying Medicare premiums directly from Social Security benefits should be an easy way to make sure seniors don't have to deal with a bill in the mail and to save taxpayer dollars on administrative costs. But the way it's set up now, the withholding process is a mess that discourages Medicare recipients from signing up for it" (Reichard, CQ HealthBeat, 8/13).

The report is available online.

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