Why You Shouldn’t Be Afraid to Talk to Your Health Insurer

Here’s a shocker: Consumers are wary of contacting their health insurers. It’s a good bet they’ve been conditioned by their own experiences, stories from friends, and the seemingly endless news stories about insurers who deny health claims. Whatever the reasons, many of the readers who pose questions to me would do just about anything to solve their health problems – except talk to their health insurers.

This may be understandable, but it can be a big mistake. Your health insurer knows more about your coverage than anyone, including the often inscrutable rules about what’s covered and how much you pay for coverage in premiums, annual deductibles, co-pays and the like.

Such confusion can be multiplied in Medicare, which has different deductibles and copays for hospital stays, doctors’ visits, outpatient expenses, medical equipment and prescriptions that are covered by the four parts of Medicare.

Another shocker? Most health insurers have been improving their customer service skills in their phone centers and on increasingly helpful websites.

Here’s a story I first wrote about last year, but it remains relevant today. It may appear to be a rare “good news” story about a health insurer, but I think it’s only rare because reporters are trained to write about what goes wrong, not what’s working the way we expect. If you want more happy-time reports, you can find plenty of them on insurer websites.

Jim and Melissa live in North Carolina. They had been covered on that state’s insurance exchange, set up under the Affordable Care Act. Their coverage was with BlueCross BlueShield of North Carolina.

Jim had just turned 65 and was told (correctly) that he needed to move off the exchange and get Medicare. So far, so good. Melissa is younger and thus needed to stay on the exchange, but she had to find a new plan that only covered her, not both her and Jim.

This would not have been a big deal except Melissa had been diagnosed with breast cancer and was facing a year of chemotherapy following a recent double mastectomy. She faced a tough road to recovery and the couple faced some big medical bills regardless of how well their insurance coverage protected them.

When Blue Cross switched Melissa to her new exchange plan, Jim says, the insurer determined that the amount she had paid toward her deductible would not roll over to her new plan. The couple had already paid her 2019 individual deductible of $6,750. Faced with the need to start over again, she would have to pay another $6,750 before her insurance coverage kicked in later this year.

Jim was distraught, and wrote me:

“It doesn’t seem right that we have to pay her individual deductible twice this year, for an individual deductible of $13,500, when the insurance is covering the same person with the same risks with the same benefits. Why does Medicare, the Affordable Health Care Act, and BlueCross BlueShield place this burden on sick, elderly couples? What is my recourse to change this sad situation?

I have already talked to Healthcare.gov about this issue. Its representatives tell me, ‘It’s not against the law. The insurance companies do it all the time.’ Is my only recourse to sue the insurer and hope that a jury will see things my way? Isn’t there any other path to contest these actions?”

When I wrote back to Jim, I thought BlueCross BlueShield had acted legally although perhaps not ethically.

Fortunately, Jim didn’t stop there. He picked up the phone and called the insurer. Good move! Here’s what he said happened:

“It turns out that, after everyone else said there was nothing I could do, I spent a couple hours on the phone with BlueCross BlueShield of North Carolina. To my great surprise and satisfaction, the agent put together a request that my wife’s individual deductible be carried over to the new plan.

Today, picking up medications at the pharmacy, I noticed that I paid nothing for my wife’s prescription. When I got home, my wife checked her account online and saw that her deductible was carried over to her new policy! I am very grateful to BCBSNC for doing the right thing. I only wish the folks at HealthCare.gov had suggested that I call BCBSNC right away.”

This happy ending to Jim and Melissa’s insurance nightmare is not a blanket endorsement for all health insurers or even that BlueCross BlueShield will always “do the right thing.”

But it is an endorsement for calling your private health insurer for questions beyond routine care. It’s usually a good thing to do so even before you need care or file a claim because doctors don’t always check to make sure your insurance covers a procedure before ordering it. While this can seem like a hurdle to getting the care you need, that’s not what I’ve seen.

The coverage that insurance plans commit to provide is not going to change all of a sudden. Just the opposite. If the care you need has been prescribed by a doctor or other licensed health professional and is covered by your policy, contacting your insurer and creating a record of your care needs can be a strong point in contesting any subsequent claim denial.

And while getting stuck in an insurer’s phone-tree labyrinth can happen, you should be able to connect with a human being eventually. What they tell you might just be helpful.


Do You Know SDOH? You Should

Health insurers are slowly adopting their plans to include coverage of certain non-medical expenses that have been shown to improve their health. A leading example would be installation of bathroom grab bars to prevent falls, a leading cause of serious injury among older Americans.

Another example is delivering healthy meals for a week or two to people who’ve been released from a hospital after a serious injury or health condition. It’s hard for people to cook for themselves, let alone get out to shop for nutritious food. Being well-fed for two weeks can help speed their recoveries.

Paying for people to take a Uber or Lyft to a medical appointment is another popular example of what is broadly known as coverage of social determinants of health – hence the SDOH of today’s headline.

In the real world, the logic of SDOH is obvious. Spending a little bit of money know can save huge amounts in future medical bills while adding greatly to a person’s quality of life. For all the money we spend on health, medical care is responsible for only about 20 percent of our wellbeing. The other 80 percent is tied to income, housing, food scarcity, and other behaviors.

Reflecting this knowledge in an insurance product is seldom obvious and often very difficult. Not that we’re likely to forget, but private health insurers make a lot of money, so expecting them to suddenly provide a grab bag of new benefits is not going to happen.

What is happening, perhaps too slowly, is that health insurers are looking at their most costly customers. In any given year, more than 20 percent of national health spending is generated by 1 percent of those with insurance. The problem, of course, is that a substantially different 1 percent may generate 20 percent of next year’s spending, and so on.

Figuring out ways to reduce spending by the sickest customers is hardly charity; it can translate into huge savings for insurers, higher profits and happy shareholders. Increasingly, these ways include SDOH. Most programs involve low-income Medicaid and Medicare beneficiaries.

Humana launched an effort earlier this year that reimburses hospitals and other health systems for referring Medicare Advantage customers to food banks and housing assistance programs.

United Healthcare is testing a housing support program, according to a story in the Philadelphia Inquirer. The company’s Medicaid plan, UnitedHealthcare Community Plan of Pennsylvania, screens homeless Medicaid patients with high health spending and tries to find housing for them.

“Many of the people we serve,” the plan’s chief executive Allison Davenport told the newspaper, “experienced such instability that their health care becomes intractable. It compounds, it compounds, it compounds and they can’t address that in a completely unstable situation.”

In a 2019 study, researchers found that more than 52 percent of adults between the ages of 50 and 80 experienced what was described as severe food insecurity – “meaning they sacrificed the quality or amount of food they consumed because they lacked sufficient resources.”

Medicare has stepped up its emphasis on SDOH programs through what it’s calling its Accountable Health Communities Model, which partners with community health organizations to identify people with unmet social needs linked to poor health outcomes.

The numbers of people involved in these efforts is very small and there’s no guarantee they will rise enough to make a dent. Thanks to the pandemic, of course, these unmet needs have become even larger this year.

Starting small, however, is what cautious health insurers do. These early efforts will capture spending data and begin identifying benefits linked with the greatest health improvements.

As with other trends that began with government programs, expect SDOH successes to find their way into employee insurance programs over time. The same insurers who manage Medicaid and Medicare plans also oversee employer plans.

Bit by bit, they will add to a snail-like transition that health insurance knows it needs to make, moving to what is truly health insurance from something that, despite its name, is now just really sickness insurance.



How One Health Hero Fights Back

Many Americans regularly suffer unfavorable decisions that affect their health benefits, but Anna Landre has proven herself to be a formidable opponent to what many see as a dysfunctional health care system.

The 21-year-old, who was valedictorian of her high school, has earned strong grades during her three years at Georgetown University while living with a significant disability — spinal muscular atrophy. I wrote about Anna last year and have kept up with her. Her story is included in my new book due out next January, Get What’s Yours for Health Care – How to Get the Best Care at the Right Price.

Landre has been coping with the genetic disorder since birth and relies on extensive on-site help. She has a health aide with her 16 hours a day — 10 hours each evening and six hours during the day. She needs help with all daily activities and often requires assistance at night to improve her breathing and move her to a more suitable position in bed. She has been able to live on campus and attend classes, aided by a motorized wheelchair.

Even with on-site help for much of the day, trying to lead a semblance of a normal life is challenging. Her course work had to be rearranged because she can only attend classes when an aide is present. “It would be nice to be able to have someone with me all the time,” she said in a phone interview. “God forbid that I could go to the bathroom whenever I want!”

The company that administers Medicaid on behalf of New Jersey, Horizon NJ Health, informed her in 2018 that it would reduce the number of weekly hours of care covered by her insurance from 112 to 70. Cutting the hours of care by more than a third threatened to end Landre’s dreams of getting a college degree and, later, leading an independent life.

The company told Landre the change stemmed from periodic nursing assessments it does to evaluate needed benefits. Using a benefits evaluation tool created by the state, Horizon NJ Health found Landre needed less than 10 hours of help a day.

Landre said neither the insurer nor the state ever explained to her why her hours had previously been approved but then cut without any change in her condition. “I thought we all had agreed upon this amount of help throughout my college career, and that the insurance company and the state and me – all three parties – had agreed that this was going to work,” she said.

“They have these set ideas about what disabled people should and shouldn’t be allowed to do.”

Landre appealed the reduced coverage. A state administrative law judge reversed Horizon’s decision, but the New Jersey Department of Human Services, which oversees the state’s Medicaid program, then reviewed the judge’s decision, as required by law. It agreed with the company and said in late May that Landre’s benefit cuts would take effect.

The New Jersey Department of Human Services, which oversees the state’s Medicaid program, “didn’t care that I couldn’t live independently on the amount of hours that their evaluation tool kind of spit out,” Landre said. “It was really awful trying to fight that fight.”

Landre recalled that during her appeal, the insurance lawyer asked if she brought her aide to parties where she would drink. “And I said, ‘Absolutely not!’ But I was also thinking in the back of my head, what if I couldn’t lift a fork to my mouth to eat, or I couldn’t drive my own wheelchair and I did need someone to go to social events with me?” Landre said. “Would that somehow make me a criminal? They have these set ideas about what disabled people should and shouldn’t be allowed to do.”

A Horizon spokesman declined to discuss Landre’s case beyond saying that the company did not make New Jersey’s rules but simply carried them out in its coverage decisions, noting that the state had agreed with its decision to reduce her covered hours. A spokesman for the state said it did not comment on individual cases.

Once she was informed of that decision, Landre began developing a social-media campaign to fight back against adverse health insurance decisions.

The tweets generated an outpouring of support from the Georgetown community and disability rights groups. They also led to news stories in the Asbury Park Press, NJ.com, Forbes, and other online outlets. The insurer quickly reversed its position.

Landre said the terms of her revised agreement prevented her from discussing specifics. But she will be getting 16 hours of daily help during the rest of her college career.

The downside, Landre said, is that her success is specific to her case and does not change insurance coverage rules for other people with disabilities. Increasingly, knowledge-based jobs can be filled by people with disabilities, she said, but not if outdated insurance rules apply coverage restrictions that no longer reflect technological and workplace realities.

But Landre’s situation could serve as an example to others denied coverage. A government report from 2011 estimated between 39 percent and 59 percent of coverage denials are overturned on appeal.


Three Problems Causing Higher Health Costs

Add Dr. Marty Makary’s name to the expansive list of health care experts who are fed up with the system, don’t think we can afford to wait for Congress to enact reforms, and have useful ideas about how people can become healthier and perhaps save a bundle of money in the process.

A surgeon at Johns Hopkins in Baltimore and a widely published writer on health issues, Makary explained his take last fall on how to fix health care in his book, “The Price We Pay: What Broke American Health Care – and How to Fix It.”

His account began with an extended and emotional lament that many of his colleagues have abandoned the Hippocratic Oath in favor of charging inflated prices for surgeries and health procedures that are not in their patients’ best interests — or may not even be needed at all.

“Patients are willing to let me put a knife to their skin within minutes of meeting me, or to divulge secrets they’ve kept for a lifetime – just because I’m a doctor,” he writes. “For centuries, medicine was based on an intimate relationship between doctors and patients. But behind the scenes, a gigantic industry emerged: buying, selling, and trading our medical services. Health care industry stakeholders are playing a game, marking up the price of medical care, then secretly discounting it, depending on who’s paying.”

Makary’s research uncovered no shortage of bad actors in health care, including the Carlsbad Medical Center in New Mexico, which has sued thousands of people for unpaid medical bills in the last several years.

The company’s owner, Community Health Systems, has been repeatedly fined for overcharging patients. In a New York Times story about Makary’s research, a Carlsbad spokesperson defended its collection practices but declined interview requests. The hospital later said it would stop suing certain low-income patients and discount prices to uninsured patients.

While such horror stories make for interesting reading, Makary treats them as a perhaps-necessary prop to interest readers in paying attention to the solutions he and others propose. His goal in writing the book, he said in a phone interview, “has been to create health care literacy by taking a complex topic and making it relatable and understandable.” He does that by telling stories that highlight the tools people and businesses can use “to get a better deal on their health care.”

The book reflects Makary’s largely positive views about the future of health care as he lays out ways to deal with the system’s current shortcomings.

The three main health problems he addresses are health care pricing failures, middlemen who make huge profits on health care while adding little to patient well-being, and the enormous amount of inappropriate care that people receive. For each problem area, he tracked down people and companies doing innovative work to help lower costs and help people gain access to higher-quality care.

In one example, a former pharmacist used medication lists to find out how much money pharmacy benefit managers were pocketing for their services as an intermediary between employers and pharmacies. Once employers knew the difference, they were able to renegotiate their pharmacy benefit manage contracts and save “millions of dollars.”

“People blame doctors, hospitals, payers, pharma, device companies, and even patients for not taking better care,” he writes. “But the money games are so established and the revenue stream they produce is so steady that experts don’t want to discuss altering the business model. But every one of us in health care, every stakeholder, needs to look inward and address the waste in our own backyard.”

In other words, “there’s no diabolical villain,” he said on the phone. “We have, structurally, a broken system.”

Makary said the drivers of health care costs are hospitals, insurance companies, drug companies and other middlemen, such as pharmacy benefit managers.
“There are so many hands taking money out of the system that there’s no silver bullet solution to save money. To lower costs, we must take on the powerful stakeholders,” Makary writes.

Disclosing the actual costs of health care is a powerful start. This includes the often inscrutable prices charged by hospitals and other care providers but also should include the final prices – often negotiated sharply downward — that insurers and providers agree upon. Health care consumers usually only know their own out-of-pocket costs but these mask the inflated costs that insurers have paid for their care.

Makary’s advice: Ask for a price for every medical service you are considering. Doing so can help identify providers who take advantage of consumers by prescribing unnecessary tests and procedures that carry inflated price tags. “Price transparency alone will not solve all the problems of predatory screening and unnecessary medical care, but it could save the health care system hundreds of billions of dollars, Makary writes.

“Health care is perhaps today’s most divisive, territorial political issue,” the book concludes. “But many of the needed solutions are not partisan; they’re American. We are at a pivotal juncture. Spending on health care threatens every aspect of American society. The time for commonsense reform has arrived.”

Despite all the problems he encountered doing research for the book, Makary said, he wound up being optimistic that “good stuff is happening” and that “the innovators can help us dig out of our cost crisis.”


Social Security, Medicare Numbers to Know in 2020

Social Security

The Social Security COLA (cost of living adjustment) for 2020 is 1.6 percent. The average monthly benefit as of January was $1,503, up from $1,479 a year earlier.

Here are other key 2020 metrics:

Earnings ceiling for payroll taxes: $137,700, up from $132,900 in 2019.

Earnings test thresholds applied to wage earnings for beneficiaries: $18,240 a year, up from $17,640 in 2019, for those under full retirement age; $48,600, up from 46,920 in 2019, in the year an individual reaches full retirement age.

In 2020, the full retirement age became 67 for anyone born in 1960 or later. It is 66 for those born from 1943 to 1954, and rose by two months a year for those born between 1955 and 1959.

Here is Social Security’s explanation of how the earnings test may affect benefits:

Exempt Amounts for 2020
We determine the exempt amounts using procedures defined in the Social Security Act. For people attaining NRA after 2020, the annual exempt amount in 2020 is $18,240. For people attaining NRA in 2020, the annual exempt amount is $48,600. This higher exempt amount applies only to earnings made in months prior to the month of NRA attainment.

Benefits Withheld When Earnings Exceed Exempt Amounts
We withhold $1 in benefits for every $2 of earnings in excess of the lower exempt amount. We withhold $1 in benefits for every $3 of earnings in excess of the higher exempt amount. Earnings in or after the month you reach NRA do not count toward the retirement test.

Disability thresholds: $1,260 a month, up from $1,220 a month in 2019 for non-blind individuals; $2,110 a month, up from 2,040 a month, for blind individuals.

Supplemental Security Income federal payment standards: $783 a month, up from $771 a month, for individuals; $1,175 a month, up from $1,157 a month, for couples.

By law, Part B premiums must be deducted from Social Security benefits for Medicare-eligible enrollees who also have claimed Social Security.



The standard monthly Part B premium is $144.60, up from $135.50 in 2019.

The Part B annual deductible is $198, up from $185.

The Part A hospital inpatient deductible, for up to a 60-day stay, is $1,408, up from $1,364.

Part A hospital inpatient coinsurance, for days 61-90, is $352 per day, up from $341.

Part A skilled nursing facility coinsurance, for days 21-100, is $176 per day, up from $170.50.

There are no Part A premiums for about 99 percent of Medicare beneficiaries. Part A does charge monthly premium for those with fewer than 40 quarters of lifetime earnings on which they paid Social Security payroll taxes. For those with 30 or more quarters, the monthly Part A premium is $252 a month, up from $240 a month in 2019. For those with fewer than 30 quarters, the monthly Part A monthly premium is $458, up from $437.


What does 2019 bring for Medicare and Social Security?

As 2019 begins, expecting much from our gridlocked government on Medicare and Social Security seems wishful thinking. But the new year will usher in a slew of new cost and benefit levels.

The numbers change every year. I know that, like me, you have trouble keeping track because you ask me about them all the time!

For your convenience, here is the newest information for 2019, courtesy of Medicare and Social Security:


The numbers I outline here are for people with original Medicare. People with private Medicare Advantage plans usually face similar charges; some plans charge lesser amounts (federal law prohibits them from charging more).

The standard monthly premium for Part B will rise to $135.50 from $134 in 2018.

There are also high-income surcharges for people filing individual and joint tax returns. They are based on what’s called Modified Adjusted Gross Income, and 2019 premiums are based on 2017.

Medicare Part B surcharges

The Part B annual deductible is up $2 to $185 in 2019.

The Part A deductible for hospital inpatient stays is rising $24 to $1,364. This is not an annual deductible but one that covers each episode of care. Normally, a new episode will be triggered once a person has been out of the hospital for 60 days.

There is zero coinsurance for stays up to 60 days and $341 a day (up from $335 in 2018) for days 61 through 90. People have up to 60 additional “lifetime reserve days” for longer stays, and the coinsurance charge is $682 a day (up from $670) for each of those days. After this coverage has been exhausted, people with original Medicare must pay all hospital costs. Again, these limits apply to individual benefit periods.

Part A also covers stays in skilled nursing facilities, with no coinsurance for the first 20 days of a benefit period. The coinsurance is $170.50 per day for days 21 to 100, up $3 from 2018. Persons with original Medicare must pay all costs for longer stays.

Social Security

The Social Security COLA (cost of living adjustment) is increasing 2.8 percent. The average 2018 benefit of $1,422 a month will rise to $1,461 in 2019. This is up from 2 percent last year and is the largest adjustment since 2011.

Workers of all ages will also have to pay payroll taxes, which help fund Social Security, on more of their income this year. The government will tax earnings up to $132,900. The ceiling was $128,400 last year.

The amount that Social Security beneficiaries who are under full retirement age can earn without being penalized — known as the earnings test — is increasing to $17,640 a year ($1,470 a month), up from $17,040 ($1,420 a month). The threshold is $46,920 ($3,910 a month), up from $45,360 ($3,780 a month) in the first year an individual reaches full retirement age.

There are also thresholds for people receiving disability benefits. They cannot earn more than $1,220 a month, up from $1,180 a month for non-blind individuals or $2,040 a month, up from $1,970 a month, for blind individuals. If they do, they can lose their benefits.

Supplemental Security Income — another program that provides cash assistance to aged, blind and disabled persons who have limited income — is increasing its standard payments: $771 a month, up from $750 a month, for individuals; $1,157 a month, up from $1,125 a month, for couples.

Social Security, Medicare announce key 2019 numbers

The Social Security COLA (cost of living adjustment) will be 2.8 percent. The average 2018 benefit of $1,422 a month thus will rise to $1,461 in 2019. This is up from 2 percent last year and is the largest adjustment since 2011.

Medicare announced that the 2019 standard monthly premium for Part B of Medicare will increase by only $1.50 to $135.50 from $134 in 2018.

By law, Part B premiums must be deducted from Social Security benefits for Medicare-eligible enrollees who also have claimed Social Security. The announcements from the two agencies means that nearly all of next year’s COLA will wind up in the pockets of beneficiaries.

Here are other key 2019 changes.

Social Security

Earnings ceiling for payroll taxes: $132,900, up from $128,400.

Earnings test thresholds applied to wage earnings for beneficiaries: $17,640 a year ($1,470 a month), up from $17,040 ($1,420 a month) for those under full retirement age; $46,920 ($3,910 a month), up from $45,360 ($3,780 a month) in the year an individual reaches full retirement age.

Disability thresholds: $1,220 a month, up from $1,180 a month for non-blind individuals; $2,040 a month, up from $1,970 a month, for blind individuals.

Supplemental Security Income federal payment standards: $771 a month, up from $750 a month, for individuals; $1,157 a month, up from $1,125 a month, for couples.


Part B annual deductible: $185, up from $183.

Part A hospital inpatient deductible, for up to 60 days: $1,364, up from $1,340.

Part A hospital inpatient coinsurance, for days 61-90: $341 per day, up from $335.

Part A skilled nursing facility coinsurance, for days 21-100: $170.50 per day, up from $167.50.

Part A monthly premium for those with insufficient Social Security earnings to qualify for premium-free Part A: $437, up from $422.

When Social Security Sues A 6-Year-Old Orphan Over Its Own Mistake

Dylan Youngblood is a 6-year-old living in Woodstock, Georgia. His mom, Melissa Blair, died on April 22, 2017, thanks to an uninsured drunk driver. His dad has been on disability for a number of years and is unable to care for him. When a child’s parent is receiving Social Security disability benefits, the child can receive a child benefit. Consequently, Dylan has been receiving, for several years, a child benefit based on his dad’s disability benefit claim – not a big one mind you, but something.

Dylan’s now living with Melissa’s cousin, Erin LeCour, and her husband Joseph. Both are police officers. Erin emailed me about Dylan’s situation and we spoke several times on the phone. Here’s what I learned. When Melissa died, Erin and the custodians of Melissa’s other three children visited Social Security’s Marietta, Georgia local office to report Melissa’s death.

The Social Security agent with whom they met – Mr. Demario Williams – could not, according to Erin, have been nicer. Demario knew that Dylan could share in Social Security’s meager death benefit, split four ways. But he didn’t know if Dylan’s could receive more income based on his share of the child-survivor benefit available to survivors of deceased parents. He also knew, based on Erin’s statements at the meeting, that Dylan was receiving a child benefit on his dad’s work record. Demario told Erin that Dylan would, at a minimum, receive a quarter of Melissa’s meager $255 one-time death benefit.

In August 2017, Dylan began to receive child-survivor benefit checks. These payments were in addition to the child benefit that Dylan was receiving based on his disabled father’s record. The child-survivor checks along with the child benefit continued to be paid for roughly one year. In May, Dylan received a letter, which Erin shared with me, from Social Security, addressed to Dylan, demanding repayment of $2,251 due to Social Security’s overpayment. This was not a formal lawsuit, but it came with a clear warning – pay our bill or we’ll stop your child benefit for all the months required for us to recover what you owe us.

Here’s apparently what happened. Social Security far too often pays benefits to people by mistake. In this case, 6-year-old Dylan wasn’t supposed to receive a child survivor benefit based on his deceased mom’s work record. He was just supposed to receive the larger of the child benefit and the child survivor benefit, which was and is the child benefit. This was not Dylan’s fault in any way shape or form. It was Social Security’s mistake in every way, shape and form. Yet Social Security has a rule – if it pays us benefits due to their mistake, it’s our mistake and we have to repay.

Dylan is in absolutely no financial position to repay the $2,251. Neither are Erin and her husband. They assumed Dylan was due the additional payments and spent the money on him when it was received. Erin is appealing Social Security’s decision on Dylan’s behalf. Will Dylan win? Maybe not. The Social Security administrative judge may point to Erin and Joseph’s modest income and rule that Dylan receives enough support from them to repay their bill. But Erin and Robert aren’t in a position to hand $2,251 over to fix Social Security’s mistake.

Let’s listen to Erin’s outrage over this situation.

They’re basically telling me now, that I have to pay back his dead mother’s money from the past year because he’s not entitled to it?!? Simply because he gets something from his disabled father?! First of all, I had no idea he couldn’t get something from each parent. That’s Social Security’s job to know this. They had all the information! I wouldn’t even have known to ask if Dylan was eligible for something from both. It seems like child survivor benefits would be different than what he gets from his disabled and absent father.

Can they do this? It is no fault of my own. They messed up. I keep looking and I still can’t find where a child can’t get something from both. I’m of course going to appeal and tell them this is their fault, not mine and if they want to stop Dylan’s mother’s death benefits, not only are they horrible people but, they can do it as of now but not to expect me to give them back any money.

Again, this horrendous story is routine. I’ve been contacted by many people over the years who received what for them are major bills to reimburse Social Security for its mistakes. The worst case I’ve encountered was that of a disabled lady, who I’ll call Joan. Joan, who was confined to a wheel chair, decided to try to write a book (a children’s book) – one of the few things she could physically do.

To Joan’s surprise, the book did well and she started receiving royalty checks – roughly $20,000 per year — for a number of years. Every year she contacted Social Security and asked if she could continue to receive Social Security disability benefits given her royalty income. Each time the Social Security officials told her that royalty income was different from labor income and does not trigger the system’s Earnings Test, which reduces one’s benefits 50 cents on the dollar for all earnings above a threshold.

Ten years later, Joan received a $300,000 bill from Social Security demanding immediate repayment of benefits, which  the Social Security Administration “incorrectly,” under its revised view, paid Joan over more than a decade. Social Security admitted in writing that they had told Joan that her royalty income wouldn’t trigger the system’s Earnings Test. But they claimed that Joan had transformed her royalty income into labor income by speaking about her book on several occasions at local libraries and similar locals. Joan pointed out that the talks weren’t compensated. Social Security said it didn’t matter. She had done something to encourage sales of her book.

Joan, whose royalty income has dwindled to next to nothing and is back to surviving on her disability check, appealed her case through Social Security ‘s Kafkaesque appeals process. Finally, her case was reviewed by an Administrative judge who requested a number of documents, including Joan’s most recent cable bill. The judge ruled that Social Security had made mistake after mistake, but those mistakes were Joan’s because by law, if you spend money Social Security mistakenly gives you, even if it repeatedly told you it was yours to spend, you should have known you were being told the wrong thing and returned the money. We’re talking, of course, about a system with hundreds of thousands of rules in its Program Operations Manual, which no one can possibly master unless they spend years studying them.

But there is a basis for a Social Security judge (Yes, the system has its own judges.) to absolve you of Social Security’s mistakes – namely hardship. Joan is definitely living a life of extreme hardship, trying to get by on her modest monthly disability check. But Joan likes to watch TV, which is her main source of company and entertainment. Consequently, she did choose and is paying for a good cable plan. The judge, in his written ruling, which I read, denied Joan’s appeal specifically on the basis of her cable plan being too expensive for someone living in hardship.

I kid you not. No wonder we have so many people in our country who hate the government.

This article appeared on June 29 on the Forbes website.

Watchdog reports reveal problems at the strained, underfunded Social Security Administration

Reports of Social Security’s financial problems appear like clockwork, yet the agency’s enormous operational issues receive little attention. Long before 2034 – the currently projected year in which the program will run short of funds – the agency may cease to effectively serve the older and disabled Americans who depend on it for benefits that often are their only source of funds for housing, food and other necessities of life.

Several years ago, economist Larry Kotlikoff, PBS NewsHour economics correspondent Paul Solman and I began work on a book that we would later name “Get What’s Yours: The Secrets to Maxing Out Your Social Security.” In gathering information for the book, we spoke to many people who told us about the problems they faced trying to claim benefits, understand the program’s very complicated rules, and simply reach a Social Security representative who understood the program and had the time to explain it to them.

During this time, the Social Security Administration (SSA) refused to speak with us. It continued, as it does today, to issue self-congratulatory statements about how many beneficiaries it serves and the high levels of customer satisfaction it achieves in the regular opinion polls it conducts.

The impression the agency clearly wishes to create is that it’s doing a wonderful job, notwithstanding the inevitable problems experienced by a relative handful of folks among the 67 million people to whom it paid benefits last year.

We thought this was untrue and said so in our book. Overwhelmingly, readers and critics agreed. Now, courtesy of a recent investigation by the agency’s own whttp://www.getwhatsyours.org/media/atchdog and continuing reports from the Government Accountability Office (GAO), it’s possible to more fully document the scope of the agency’s failings.

The watchdog report is especially troubling. It was issued by the SSA office of inspector general (OIG) and involved the rules when applying for survivor benefits. In most claiming situations, people must apply at the same time for all eligible benefits. Social Security is supposed to calculate the higher of the two benefits and pay them this benefit. However, the rules for survivor benefits are different.

As our book noted, and as we’ve since hammered home countless times, widows and widowers have the option of either applying for their survivor benefit or their own retirement benefit. This choice can be worth lots of money. A person is entitled to their maximum survivor benefit at their full retirement age, which is now 66. However, their retirement benefit will not reach its maximum until age 70.

It often is a smart move for a person to take the survivor benefit at 66 and defer their retirement benefit so it can receive up to four years of delayed retirement credits. It would grow by 32 percent during this period and often will then be larger — perhaps significantly so — than their survivor benefit. Under SSA rules, the person can claim their retirement benefit at 70 and get this higher payment for the rest of their life.

This is how things are supposed to work. SSA representatives have a legal obligation to explain these rights to people claiming survivor benefits. But according to the inspector general’s report, the agency’s staffers have been consistently doing the wrong thing.

The report identified 13,564 people currently receiving benefits who had the option of filing for either their survivor or their retirement benefit. Now, even if Social Security was doing a good job, you’d expect at least a small percentage of mistakes, right? That, at least, is what the agency is always saying when someone catches it making an error.

The OIG looked at 50 of these situations in detail and found the agency had done the wrong thing not once or twice, but an astounding 41 times.

“Of the 50 beneficiaries in our sample, 41 (82 percent) were eligible for a higher monthly benefit amount had they delayed their retirement application until age 70.” the OIG report said. “These claimants had a higher widow(er)’s benefit when they applied for benefits; therefore, they should have limited the scope of their application and delayed their retirement application up to age 70 to increase their total monthly benefit amount.”

“However, SSA concurrently awarded widow(er)’s and retirement benefits and did not document the unfavorable filing decisions in its automated system,” the report explained. “We did not find any evidence SSA had informed claimants of the option to delay their retirement application when they applied for benefits, as required. We also found that SSA did not have systems controls in place to alert its employees when they should inform widow(er)s of their option to delay their applications for retirement benefits.”

The OIG instructed the agency to go back and review all 13,564 cases and determine if it needed to award higher benefits.

While it’s easy to throw stones at Social Security, it should be emphasized that a lot of its problems have been caused by the cumulative impact of years of underfunded agency operations. Expecting a sudden and sustained improvement of performance is simply not realistic.

According to a recent GAO report, about 170,000 people visit the 1,200 Social Security field offices every day, and 250,000 people call those offices. The agency’s national call centers handle 30 million telephone queries a year, and it mailed out nearly 250 million customer notices last year. This relentless activity has occurred even as the agency has turned to online services as the only feasible way for it to handle customer needs.

Here are a few other facts from that GAO report that I find extremely troubling. These are all verbatim statements.

  • Disability benefits: “SSA made noteworthy strides in reducing its backlog of initial disability claims, but delays in deciding disability appeals continue to worsen. SSA has reduced the number of pending claims each fiscal year since 2010 — from about 842,000 in fiscal year 2010 to about 523,000 in fiscal year 2017. However, the number of appealed claims pending at the end of 2017 was approximately 1.1 million compared to about 700,000 in fiscal year 2010, and the average time needed to complete appeals increased from 426 days to 605 days during that same time.”
  • Online customer support: “SSA did not have readily available data on problems customers had with online applications or why staff support was needed…. Our recent work also found that while the complexity of SSA’s programs can make it challenging for customers to use online services, the agency lacked data to identify and address challenges with online applications…. According to a survey conducted by SSA, the most common reason that applicants started but failed to complete a disability application online was that they did not understand what the questions meant.”
  • Employee skills: “Institutional knowledge and leadership at SSA will be depleted due to an expected 21,000 employees retiring by the end of fiscal year 2022.”
  • Benefit overpayments: “In 2016, we reported that SSA’s largest source of debt recovery is withholding a portion of beneficiaries’ monthly benefits payments. However, we found that amounts withheld may not consistently reflect individuals’ ability to pay, and that many repayment plans could take decades to complete.”
  • Information technology: “SSA’s legacy IT systems are increasingly difficult and expensive to maintain… SSA reported re-hiring retired employees to maintain its systems that include many programs written in Common Business Oriented Language (COBOL). We highlighted a group of systems for determining retirement benefits eligibility and amounts which were over 30 years old, with some written in COBOL… a programming language developed in the late 1950s and early 1960s.”

The GAO called on agency leadership to focus on fixing these problems, as it has in reports dating back many years. Ironically, as its latest report was being released, GAO was also sending a letter to President Trump informing him that the agency had been without a permanent director so long that the actions of its temporary director have been unauthorized since last November.

Worker payroll taxes fund Social Security benefits but the agency’s operating budget comes from taxpayers and must be approved by Congress in each year’s federal budget. For reasons that defy common sense, Congress has been starving Social Security of funding even as demand for its services have soared due to rising baby boomer retirements. This situation is the fault of both parties.

Posted: April 5, 2018

Your Social Security and Medicare Questions Answered

The complexities and oddities of Medicare and Social Security represent a seemingly endless source of reader questions, puzzlement, and anger. To ruin a perfectly good holiday sentiment, verily, my mailbox runneth over!

As 2018 gets under way, there is little chance that readers will run out of questions. My New Year’s resolution, and promise to you, is that I will continue to answer as many of your questions individually as possible. Knowing that I cannot answer all of them, I want to apologize in advance to those who doubtless will be disappointed (only modestly, I trust) at not hearing back from me.

But dreamer that I am, the thought occurs that I already have addressed many of your questions. Rather than reinvent the wheel, what if I share these earlier answers with you?

Since October 2014, I’ve written 170 Ask Phil columns for PBS NewsHour. (Surely, no finer cure for insomnia has yet been created. Just click here to access this treasure trove.)

As we usher in yet another new year, I have reviewed this dubious oeuvre and extracted from it a cheat sheet of shortcuts that address many of your most commonly asked Medicare and Social Security questions. These are all good places to start:

Everything you want to know about Medicare’s rules on health savings accounts
If you have a health savings account (HSA) linked to your health insurance, enrolling in Medicare makes it illegal to continue making pre-tax contributions to your HSA.

Medicare announced its premiums for 2018. Here’s what you need to know.
Most Medicare premiums are deducted from monthly Social Security payments. When Social Security announces its annual cost of living adjustment (COLA), the linkage of these two programs raised confusion and frustration to a new level.

It can pay to pick a new Medicare Part D drug plan. Here’s how to start shopping (10.26.17) Buying a Part D plan often is the most challenging part of enrolling in Medicare. This piece was geared to Medicare’s annual open enrollment season, but it applies to anyone getting Medicare for the first time or otherwise finding themselves in need of a Part D plan.

Does Medicare make sense for seniors with employer health coverage.
The most common question to Ask Phil is whether a person with employer health insurance needs to enroll in Medicare when they turn 65. The answer usually is no, but changes in employer plans may make it worth your while to get Medicare, anyway. With all the changes to health insurance and tax laws, no one should take the terms of their employer health insurance for granted. Please find out how your employer plan works before sending me a question about what you should do.

Standard Medigap plans are learning some new tricks. People often get a Medigap supplemental plan to insure against expenses not fully paid by basic Medicare. Here’s a look at new things some of these plans are now covering. Also, big changes are in store for the most popular Medigap plans, as explained in this March 29 column.

My physician isn’t in my Medicare Advantage network. What can I do?
Understanding the pluses and minuses of provider networks is essential if you want to get the most out of a Medicare Advantage plan. Also, as explained on Jan. 18, there have been widespread errors in the provider directories used by some plans.

Social Security trust fund will be depleted in 17 years, according to trustees report.
Social Security’s annual report on program finances continues to reflect a program that gets a failing financial grade.

What options do seniors have for in-home care?
Readers often think Medicare will cover the costs of custodial care, but it does not. Medically prescribed in-home care is available but often very hard to find. Here’s what you need to know.

For retired expats, the question remains: Should I keep Medicare coverage or not? Basic Medicare does not insure people for health costs outside the U.S. Many retired Americans who move outside the U.S. wonder whether they should get Medicare and if they’ll face late-enrollment penalties if they don’t have Medicare and later return to the U.S.

If you pose a question to me, don’t be surprised if my initial reply includes a copy of these links plus a few other standard answers to commonly asked questions. If this response does not satisfactorily address your question, let me know, and I will then consider providing you an individual reply.

Until then, best wishes for 2018!