Some Senators concerned about plan to address Medicare premium fefund checks sent erroneously

[Sep 18, 2006]--Some senators have raised concerns that a plan developed by CMS Administrator Mark McClellan and Social Security Administration Commissioner Jo Anne Barnhart to address errors in the deduction of Medicare prescription drug benefit premiums from Social Security checks "might be too harsh" for low-income beneficiaries, The Hill reports.

In recent weeks, about 230,000 Medicare beneficiaries received erroneous reimbursements for prescription drug benefit premiums, and an additional 400,000 to 500,000 beneficiaries experienced other errors, some of which resulted in the lack of payment of premiums for months.

CMS has said that health insurers will have to collect any Medicare prescription drug benefit premiums owed to them as a result of the errors. CMS and SSA have developed a plan that would allow Medicare beneficiaries affected by the errors to pay prescription drug benefit premiums in installments (Young, The Hill, 9/18).

At a closed Sept. 7 hearing of the Senate Finance Committee, McClellan said that CMS has worked with SSA to address problems with data transfer between the two agencies that prompted the errors. Barnhart also testified at the hearing (Kaiser Daily Health Policy Report, 9/8).

Since the hearing, Sen. Max Baucus (R-Mont.), ranking member of the committee, has proposed that CMS waive Medicare prescription drug benefit premiums for some low-income beneficiaries.

In addition, Sens. Jay Rockefeller (D-W.Va.) and Gordon Smith (R-Ore.) in a letter to McClellan and Barnhart said, "We are extremely worried that ... seniors in these circumstances will face a premium withholding amount equal to several months' premiums all in one month."

They added that "even a three-month withhold in a single check could cause a severe hardship for seniors living on fixed incomes" (The Hill, 9/18).