James and his wife Elizabeth were surprised last month when they lost their Medicare drug coverage all of a sudden. They had the same drug plan since 2013 with no issues, which is why they were so taken aback when notified that their policies were canceled.
When they first received the letter in the mail, they were tempted to toss it in the trash. Luckily, they didn’t because it’s not a scam or a mistake. Similar to James and Elizabeth, a quarter of a million Medicare beneficiaries have been receiving bills for as many as five months of premiums they thought they had already paid.
Although James and Elizabeth were without drug coverage for an entire month, their State’s Health Insurance Assistance Program (SHIP) helped them to get retroactively re-enrolled.
Beneficiaries Affected by Processing Error are Receiving Bills
Since January of this year, the Social Security Administration didn’t deduct premiums from some seniors’ Social Security checks that were supposed to pay for Medicare Advantage and private drug coverage. Social Security Administration calls what happened, “a processing error.”
Here’s how the error could affect you:
- What it affects: The problem applies to private drug policies and Medicare Advantage plans that provide both medical and drug coverage and that substitute for traditional government-run Medicare.
- Why some beneficiaries will receive bills: A quarter of a million Medicare beneficiaries may be receiving bills for as many as five months of premiums they thought they had already paid.
- Extra amount is not expected cost-of-living increase: Some people might not notice that their checks did not include a deduction for their Medicare Advantage or drug plan premiums. If their check was a little more than expected, they could have assumed that extra amount was the expected cost-of-living increase, among other things.
- Payments will resume by the end of the summer: Medicare and Social Security say they expect that proper deductions and payments to insurers will resume this month or next.
- How payments are made: Medicare beneficiaries have had the option of paying their premiums through a deduction from their Social Security checks for more than a decade. However, they can also charge payments directly to a credit card or checking account instead of relying on Social Security.
- You will need to take action to ensure that you don’t have a lapse in your coverage. Whether you have a Medicare Advantage plan or a prescription drug plan, this error requires action on your part, which will be described later in this article.
Drug Companies Speak out on who was Affected
Wondering if the processing error affected your drug company? Here’s what Medicare Advantage drug companies had to say:
- For Humana customers, spokesman Mark Mathis says about 33,000 members were affected — or fewer than 1% of its total Medicare membership. None of those members lost coverage. The company blamed Medicare’s 15-year-old IT systems for the failure and urged the agency to invest in new equipment.
- A UnitedHealthcare representative says none of its 32,000 Medicare Advantage or Part D members affected by the SSA problem lost coverage.
- Aetna has not received payments for Medicare Advantage and drug plans for the months of February through May for 43,000 affected members, says spokesman Ethan Slavin. Customers will receive bills for the unpaid premiums and can set up payment plans if they can’t pay the entire amount.
These and other affected insurers must allow their members at least two months from the billing date to pay. And they must offer a payment plan for those who can’t pay several months of premiums at once, Medicare says.
Were you Affected? Here’s What you Need to Do:
As mentioned above, if you were one of the quarter of a million customers who were affected, you should expect to receive an invoice through the mail advising of past due premium amounts. The amounts due will have to be paid by you, the beneficiary.
If you haven’t received anything from your insurance company, call them to find out if your individual plan has been impacted. Remember, the insurance company must give you at least 2 months to catch up on premiums due.
If you can’t pay several months premium at once, you can contact your provider who will make a payment arrangement that fits within your budget. According to Medicare.gov, the insurance company cannot cancel your plan if you are abiding by the agreed-upon payment arrangements.
Need the help of an advocate? Your State Health Insurance Assistance Program (SHIP) is a free health benefits counseling service for Medicare beneficiaries and their families or caregivers. SHIP helps seniors by educating, advocating, counseling and empowering people to make informed healthcare benefit decisions.
The Processing Error is NOT a Scam, But This is. . .
Ever want to try a 23 and Me to see what it will say about your background and ancestry? Many of us want to try it, but don’t want to pay the $100 for the basic test. The Federal Trade Commission has a warning out this past Friday about a creative scam targeting Medicare participants that involves DNA testing kits.
If you get a call or a mailing from someone who claims to be from Medicare and asks you for your Medicare number, Social Security number, or other personal information in exchange for a DNA testing kit, it is undoubtedly a scam.
“Scammers might say the test is a free way to get early diagnoses for diseases such as cancer or Alzheimer’s, or just that it’s a free test, so why not take it?” said Lisa Lake, a Consumer Education Specialist with the FTC. “But the truth is, Medicare does not market DNA testing kits to the general public.” So, don’t trust these unscrupulous scammers!
Never give anyone who calls, sends a letter, or approaches you out of the blue information such as your Medicare, bank account, credit card or Social Security number. Scammers can use your information, steal your identity, get credit in your name and take your money.
You can report government imposters and other scams to the FTC here.
Medicare Doesn’t Pay a Penny for Long-Term Care
Medicare can be confusing for some of us. This is why it is one of the topics that we cover frequently on our blog. One thing that should be clear is that Medicare and private health insurance ONLY pay for short-term therapy and skilled care in a nursing home for up to 100 days; they don’t pay a penny for long-term care. For long-term care, the main government benefit is Medicaid, but Medicaid laws are the most complex laws in existence!
Unlike Medicare, there are strict financial requirements that must be met in order to qualify for Medicaid, including the requirement of having almost no countable assets to your name. With proper Medicaid asset protection planning, almost everyone can qualify for Medicaid when needed, without having to be broke or to first spend down your life savings.
If you or a loved one is nearing the need for long-term care or already receiving long-term care, please call us to make an appointment for an initial consultation:
Medicaid Planning Fairfax: 703-691-1888
Medicaid Planning Fredericksburg: 540-479-1435
Medicaid Planning Rockville: 301-519-8041
Medicaid Planning DC: 202-587-2797
About Evan H Farr, CELA, CAP
