Social Security Error Jeopardizes Medicare Coverage For 250,000 Seniors

At least a quarter of the million Medicare beneficiaries may receive bills for as many as five months of premiums they thought they already paid.

But they shouldn’t toss the letter within the garbage. It’s not a scam or a mistake.

Because of what the Social Security Administration calls “a processing error” that took place January, it did not deduct premiums from some seniors’ Social Security checks also it didn't pay the insurance coverage, based on the agency’s “frequently asked questions” page on its website. The problem pertains to private drug policies and Medicare Advantage plans that provide both medical and drug coverage and substitute for traditional government-run Medicare.

Some individuals will discover they have to find the money to pay the plans. Others could get cancellation notices. Medicare officials say approximately 250,000 people are affected.

Medicare and Social Security said they expect proper deductions and payments to insurers will resume this month or next. Insurers have to send bills straight to their visitors for the unpaid premiums, based on Medicare.

But neither agency would explain how the mistake occurred or provide a more exact number or the names from the plans which were shortchanged. The total amount the plans are owed also wasn’t disclosed. A notice to beneficiaries on Medicare’s website lacks key details.

Rep. Richard Neal (D-Mass.), who chairs the home Methods Committee, and two colleagues wrote to both agencies concerning the problem on May 22 but have not received an answer from Medicare. Social Security’s response referred most inquiries to Medicare officials.

Organizations that help seniors say they are getting some questions from Medicare beneficiaries. Two seniors in Louisiana lost drug coverage after their policies were canceled because of the SSA error, said the state’s Senior Health Insurance Information Program (SHIIP) director, Vicki Dufrene. One woman had had exactly the same drug plan since 2021, and it dropped her after April. She was without coverage for the entire month of May until earlier this week, when Dufrene was able to get her retroactively re-enrolled.

Dufrene said many people may not observe that their checks didn't include a deduction for their Medicare Advantage or drug plan premiums. If their check was a nothing more than expected, they could have assumed that extra amount was the expected cost-of-living increase, amongst other things.

In Ohio, a Medicare Advantage plan reinstated an associate because of unpaid premiums under Two days following the state’s SHIIP got involved, said director Christina Reeg.

Medicare beneficiaries have experienced a choice of paying their premiums via a deduction using their Social Security checks for over a decade, she said. However, they can also charge payments directly to a credit card or checking account rather than relying on Social Security.

Humana spokesman Mark Mathis said about 33,000 members were affected – or less than 1% of their total Medicare membership. None of those members lost coverage. The organization blamed Medicare’s nearly 15-year-old IT systems for the failure and urged the agency to purchase new equipment.

A UnitedHealthcare representative said none of their 32,000 Medicare Advantage or Part D members impacted by the SSA problem lost coverage. The organization has the highest Medicare enrollment in the U.S.

Aetna has not received payments for Medicare Advantage and drug plans for that months of February through May for 43,000 affected members, said spokesman Ethan Slavin. Customers will receive bills for the unpaid premiums and may setup payment plans if they can’t pay the entire amount.

These along with other affected insurers must allow their members a minimum of 8 weeks from the billing date to pay for. And they must provide a repayment plan for those who can’t pay many months of premiums at the same time, Medicare said. With both steps, “plans can avoid invoking their policy of disenrollment to fail to pay premiums as the member is adhering to the payment plan,” Jennifer Shapiro, the acting director for the Medicare Plan Payment Group, warned the businesses inside a May 22 memo.

Lindsey Copeland, federal policy director for that Medicare Rights Center, an advocacy group, said she's concerned that older adults will see the bill with suspicion.

“If you feel your premiums are now being paid automatically and your plan tells you 6 months later that wasn’t the situation, you might be confused,” she said.