Social Security Glitch Endangered Medicare Coverage for 250,000 People

About a quarter of a million Medicare beneficiaries who asked the Social Security Administration (SSA) to deduct the monthly premiums for their Medicare Advantage (MA) or Part D prescription drug plans from their retirement benefits are learning that those payments were never sent to insurance companies. Federal officials say the problem has been fixed and the automatic payments will start this month or in July.

"The systems issue has been corrected,” according to a spokesman for the Centers for Medicare and Medicaid Services (CMS). “CMS is working with Medicare Advantage and Part D plans to reach out to impacted enrollees.” Insurance companies that weren't paid are sending letters to beneficiaries with instructions on how to make back payments, the spokesman said. He said beneficiaries should contact their health or drug plan with any questions and can also call Medicare customer service at 800-MEDICARE (633-4273).

The beneficiaries affected by this systems error are individuals who enrolled in either an MA or Part D plan that was scheduled to start on Jan. 1 and were asking SSA to begin making premium payments on Feb. 1. About an equal number of MA enrollees and Part D policyholders were affected. The problem did not affect payments of Part B premiums automatically deducted from Social Security benefits. Medicare covers about 60 million Americans over age 65 and people with disabilities.

While there have been some reports of consumers being dropped from their plans, a notice for beneficiaries on Medicare.gov says that health plans that did not get paid must offer a “grace period” for policyholders to repay the premiums that were missed. A CMS spokesman said that grace period has to last for at least two months and cannot start until the Medicare member has received a bill. In addition, beneficiaries must be offered a payment plan to help them pay the overdue premiums.

"We apologize for any inconvenience this issue has caused,” the CMS notice says.