SSA rep explains government benefits

Local Rep. Gerald Hocker (38th District) hosted Social Security Administration’s (SSA’s) Ben Shamburger for another “town hall meeting” on Sept. 15, in the brand new auditorium of the Indian River High School.

It was warm, the air conditioning being temporarily out of service, and several dubious attendees raised the temperature another degree or two, asking Shamburger questions about the new Medicare prescription drug program.

While he was able to hit the highlights, Shamburger admitted he didn’t have all the details – Medicare being administered by the Department of Health and Human Services (DHHS). And while the Medicare prescription drug benefit card has been in place for a year or so, the looming launch date for the full-blown program (Jan. 1, 2006) has apparently generated some concern.

Eventually, Shamburger announced he was transitioning into details regarding the SSA’s need-based assistance with Medicare prescription plans, and better than half the people in attendance stood up to leave.

Some of the early departures thanked him — while suggesting it would have been more appropriate to have someone from Medicare on hand. It seemed many who’d come to the meeting might have liked to spend the entire evening on the one topic.

(After the meeting, Hocker said he hoped to host Medicare representatives once the federal program fell into place.)

Shamburger did field numerous questions, though. While no one in attendance protested the plans’ premiums, deductibles and co-pays, they did quiz him on some of the fundamental elements of the pending programs.

• Q. Was the government in essence paying private employers a subsidy to keep their employees on company health plans? A. Yes, a 24 percent subsidy — a financial incentive.

• Q. So how much of that subsidy was passed on to the employees? What benefit did non-business-owner taxpayers derive from that subsidy? A. They got to keep the company health plan, which could be cheaper, or more comprehensive, than Medicare options.

• Q. Did the subsidy guarantee continued coverage? A. No.

• Q. Wasn’t there some way Medicare could run the program without entering into partnerships with private sector insurance companies? A. No, but there might be other, non-Medicare, private sector options — perhaps with a higher premium, but without the “doughnut hole.”

The doughnut hole was initially one of the most hotly-contested political issues associated with the Medicare prescription drug program (followed hard upon by debate over widely varying bottom line cost estimates).

To recap, estimated premium costs for the new plan are $35 a month, more or less, plus a $250 deductible. Then, from $250 to $2,250, Medicare co-pays 75 percent.

Then the doughnut hole — the client pays 100 percent between $2,250 and $3,600 — no co-pay. At $3,600, it kicks back over to the government — and Medicare picks up a 95 percent co-pay from there on out.

Low end, someone needing $2,250 in prescriptions over the course of a year pays $1,170, or a little less than $100 a month.

Worst case, percentage-wise, someone needing the $3,600 worth pays $2,520, or $210 a month. By way of extreme example, costs for someone requiring $36,000 worth of prescription drugs every year would pay just 65 percent more — $4,140, or $345 a month.

The plan is voluntary, but DHHS literature advises: “As we age, most people need prescription drugs to stay healthy. For most people, joining now means you will pay a lower monthly premium than if you wait to join later.”

The no-penalty enrollment period extends through May 15, 2006, and after that, there are special enrollment periods for people who’ve lost their employer health coverage (enrollment periods similar to those associated with Medicare Part B).

From the Medicare Web site, “If you don’t join a plan by May 15, 2006, and you don’t currently have a drug plan that, on average, covers at least as much as standard Medicare prescription drug coverage, you will have to wait until November 15, 2006 to join.

“When you do join, your premium cost will go up at least one percent, per month, for every month that you wait to join. Like other insurance, you will have to pay this penalty as long as you have Medicare prescription drug coverage.

“If you join after May 15, 2006, the next open enrollment period is November 15, 2006 to December 31, 2006. However, coverage for people who enroll during this period will not take effect until January 1, 2007.”

Shamburger moved into assistance — first, he said state pensioners would receive a contribution toward Medicare prescription costs.

And anyone who had (1) both Medicare and Medicaid or (2) Medicare and received income from Social Security or (3) Medicare and a Medicare savings program through the State of Delaware, automatically qualified for extra help.

Second, the SSA would provide extra help for households meeting certain income requirements, he continued — and not on an all-or-nothing basis.

Any single person qualified with less than $14,355 income, less than $10,000 in resources (doesn’t count the primary house, the land under the primary house, the stuff in the house or vehicles). Any married couple earning less than $19,245, with less than $20,000 in resources (see above) qualified for assistance.

“You can be over the limit and still get a percentage,” Shamburger noted. And he said the application for this extra help didn’t have to be completed personally — anyone, a friend or relative, could fill out the forms on behalf of the recipient.

Another handful filtered out of the auditorium as Shamburger continued into retirement, survivors’ and disability benefits.

Important to note, he said there was a very low minimum to ensure some kind of retirement benefits. If working people earned $920 (in wages or salary, etc.), they’d receive a “credit,” and could accumulate up to four credits per year. With 40 credits, they’d be guaranteed some kind of retirement benefits.

However — anyone who opted for early retirement (age 62) would take a permanent benefit reduction, Shamburger pointed out. (Full retirement falls somewhere between ages 65 and 67, depending on when a person was born.)

And there was no limit to how much money a person could earn, beyond full retirement age, he clarified. With benefits based on a person’s 35 highest-paid years, he said some people attained their max earning power later in life, and didn’t necessarily lose it by age 67.

If that was the case, they could continue to bump lower-earning years out of the equation, indefinitely, Shamburger said.

He touched on survivors’ and disability benefits for the very few people still in attendance — as with retirement benefits, there was a pitfall to avoid, he noted.

To qualify for disability (that is, some medical condition precludes the ability to keep working), a person has to have paid into Social Security for five out of the last 10 years.

That is, workers who retire before age 55 would find themselves ineligible, when, ordinarily, they’d have a chance to sign up for disability benefits at age 60. And to maintain their eligibility, they’d need to earn just a single $920 credit one more year (again, for five out of the last 10 years).

Regarding survivors’ benefits, Shamburger said most widows and widowers could apply at age 60, but persons with disability could apply early (age 50). Survivors caring for a child under age 16, or a disabled child, could apply at any age.

He referred additional questions — specifically, on the pending prescription drug benefit program, to either Medicare (again,, at 1-800-MEDICARE (633-4273), or to the ELDERinfo program at 1-800-336-9500.