A discrepancy in eligibility ages for Medicare and Social Security benefits means that some Medicare-eligible individuals are not enrolled in the program, leaving them unknowingly open to penalties.
During a meeting on Thursday, the Medicare Payment and Advisory Commission (MedPAC) discussed why this problem exists and how to fix it.
Eligibility for both Medicare and Social Security has begun at age 65 for many years. Although Medicare eligibility still starts at age 65, the “full retirement” age for Social Security is gradually increasing to 67.
People who receive Social Security benefits are enrolled in Medicare automatically. But due to this change, about 40% of 65-year-olds who are not yet receiving Social Security benefits have not been auto-enrolled in Medicare.
Some can enroll after life events, such as losing employer-sponsored coverage after retirement. The rest, however, face delays in coverage and late enrollment penalties: $13.40 per month for each year delaying enrollment in Part B, and $4.20 per month for each year delaying enrollment in Part D.
There is an appeals process for people stuck with penalties, but they must prove that they received incorrect information from a government official.
One commissioner suggested providing seniors a way to enroll in Medicare when they go to enroll in an exchange plan. Similarly, another commissioner said exchange plans could help communicate information about enrolling in Medicare to seniors.
Yet another commissioner, however, worried insurance companies would try to retain as many of their enrollees as possible—even those that could enroll in Medicare.
Little is known about the eligible-but-not-enrolled population—age 65 or otherwise. This population could be mostly healthy individuals deferring enrollment until they feel they need coverage, or they could be low-income individuals who feel they can’t afford the premiums.
Scott Harrison, Ph.D., a principal policy analyst who presented at Thursday's session, suggested that MedPAC urge the Department of Health and Human Services (HHS) to work with the Social Security Administration (SSA) to better inform individuals about their Medicare eligibility.
Usually, beneficiaries receive enrollment information through the mail. But one commissioner, Karen DeSalvo, M.D.—who served as acting assistant secretary for health at HHS under President Obama—encouraged the group to “think broadly.”
HHS and the Social Security Administration can communicate via Federally Qualified Health Center networks, Substance Abuse and Mental Health Services Administration grantees, and more, DeSalvo said. Communicating through “a lot of avenues” could also reach individuals that lack a permanent address, she added.
MedPAC plans to collect more information about this population's age, geographic distribution, income, and literacy before taking action.