Medicare glitches in drug coverage snare thousands

Personal Finance

September 03, 2006|By Eileen Ambrose | Eileen Ambrose,Sun Columnist

Medicare's new prescription drug program is working out well for Juri Kiima of Parkville. He has just one gripe: He gets the drug plan free.

The 69-year-old says he has been trying to pay his premiums since February, after noticing they weren't being deducted from his Social Security checks as he asked. Yet the retired service station owner can't seem to find anyone willing to take his money.

He said he has called his drug plan, Medi-CareFirst, each month since discovering the problem, even asking the plan to bill him directly. He phoned the Social Security Administration, which told him to call the plan. And he got nowhere with Medicare, which kept transferring his call and leaving him on hold for long periods.

"I was supposed to pay a premium. I want to pay for what I get," Kiima said.

On top of that, his wife and two friends haven't paid premiums, either. "I can't believe it's only the four of us," Kiima said.

It's not.

About 150,000 of the 4.6 million consumers electing to pay premiums through Social Security deductions are in a similar situation, said Medicare spokesman Peter Ashkenaz. The agency has been working on the problem and expects the fix to kick in this month or next.

This comes on the heels of an error last month when 230,000 Medicare recipients wrongly received premium refunds totaling nearly $50 million.

Premium payment problems have caught the attention of Congress. Last week, Sens. Charles E. Grassley, a Republican from Iowa, and Max Baucus, a Montana Democrat, said they plan to hold a meeting on what's being done to correct gaffes.

Granted, glitches can be expected in the launch of a massive new federal benefit. But that might be little consolation to those caught up in one. Advocates say it's not often easy to correct problems, and some consumers may fear losing drug coverage or owing hefty back premiums.

"In general, the program is helping many people on Medicare and providing drug coverage," said Tricia Neuman, a vice president with Kaiser Family Foundation. "But there are glitches and it's hard to quantify how many people have problems. But for those who do, they are real." (Neuman's father was mistakenly dropped from his plan.)

Kaiser recently interviewed directors of State Health Insurance Assistance Programs who help people navigate the drug program.

Many directors early on recommended that premiums be automatically taken out of Social Security checks to make things easy, according to a Kaiser report. But some have since stopped giving that advice because of payment problems.

Some problems

Premiums sometimes weren't taken out. Or they were deducted but not forwarded to the drug plan, the report said. Or the wrong amount was deducted because Social Security didn't have a consumer's correct plan enrollment information. This could happen when consumers switched plans early in the year, and Social Security hadn't caught up to the change, the report said.

Part of the difficulty, too, is that premiums vary widely, making deductions more complicated, the report said.

Fixing premium problems isn't easy, either, because of the number of players involved, directors of the insurance assistance programs said.

When someone elects to pay through Social Security deductions, the drug plan, Medicare, Social Security Administration and the Treasury Department all play a role, says Medicare's Ashkenaz.

Data entry issues

Problems can be triggered by a data entry error somewhere along the way. "It could be something as simple as an initial is wrong or a number is wrong in the Social Security number," Ashkenaz said.

If the information doesn't match Social Security's records, the premium won't be deducted and the matter is kicked back to Medicare to investigate, said Social Security spokesman Mark Lassiter.

It's unclear what happened in Kiima's case. CareFirst BlueCross BlueShield said it cannot comment on it because of federal medical privacy laws. But the company has about 2,000 customers in a similar situation and it has been waiting for guidance from Medicare on how to correct the problem, spokesman Jeff Valentine said.

Kiima said his wife worried they might be dropped by their drug plan for not paying.

The couple can afford to pay back premiums. But Kiima said he's concerned that others living on tight budgets couldn't handle being hit by a full year's worth of premiums.

Medicare has dealt with Social Security deduction problems throughout the year, and they usually take a couple of months to correct, Ashkenaz said.

Consumers won't be dropped from drug plans if their premiums failed to come through from Social Security, he said.

Changes for 150,000

The 150,000 consumers now having deduction problems should start seeing premiums being taken out of Social Security checks this month or next, Ashkenaz said. Drug plans are expected to work out an affordable repayment plan for those more than three months behind on premiums.

Medicare also is trying to collect the $50 million that went out by mistake. It mailed letters to refund recipients spelling out their options for returning the cash. (Medicare should be so lucky that everyone is as honest as Kiima.)

Meanwhile, given the problems with Social Security deductions, consumers might be better off opting to pay premiums directly to their drug plan.

Those who like the convenience of automatic payments should check if their plan can deduct premiums each month from their bank account.

To suggest a topic, contact Eileen Ambrose at 410-332-6984 or by e-mail at eileen.ambrose@baltsun.com. Podcasts featuring Ambrose can be found at baltimoresun.com/ambrose

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