Editor’s Note: Journalist Philip Moeller, who writes widely on aging and retirement, is here to provide the answers you need. Phil is the author of the new book, “Get What’s Yours for Medicare,” and co-author of “Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security.” Send your questions to Phil. And check out his recommended reading section with links to notable stories and reports at the end of today’s post.
Rep. Sam Johnson, R-Texas, who is chairman of the Social Security subcommittee on the Ways and Means Committee, introduced a bill to “fix” Social Security last week shortly before Congress decamped for the holidays. It was for show, as there was no way Congress would act on the measure this year, and the bill would need to be reintroduced next year in a new Congressional session.
Still, Johnson’s move evoked the standard responses — support from conservatives and alarm from program supporters. And it certainly completes the place setting for possible changes in 2017 to all of the nation’s major safety-net programs — the Affordable Care Act, Medicaid, Medicare and now Social Security. Even food stamps are on the GOP agenda.
The Social Security bill would raise the retirement age, reduce cost-of-living benefits and help out wealthier beneficiaries by reducing their tax bills. It would provide some added help to lower-income beneficiaries. But it largely would restore financial balance to the program through benefit cuts and does not propose any increase in payroll taxes or larger contributions from wealthier wage earners.
Frankly, I doubt it will go very far. It’s more of an initial salvo to begin defining new outlines of unpalatable cutbacks that Democrats in their weakened political position could be forced to stomach. There will be much more to come on this topic.
Meanwhile, two other reports on the performance of the Social Security Administration also were released last week by the program’s watchdog arm, the Office of Inspector General. They received less attention. One was about the serious decline in customer service at the agency’s more than 1,200 field offices; the other documented alarming backlogs in how the agency is processing applications and disputes.
Here are the highlights or, rather, lowlights from these two reports. These are direct quotes from the two reports:
In 2011, SSA [Social Security Administration] began reducing field offices’ operating hours. In August 2011, SSA began closing field offices nationwide 30 minutes earlier each day. In November 2012, SSA extended these early closures to 1 hour. In January 2013, SSA further reduced field office hours by closing every Wednesday at noon. However, in March 2015, SSA expanded the field office openings by 1 hour on each weekday but Wednesday. Field offices still close at noon on Wednesdays. As a result, as of the date of our review, field offices were open to the public 4 hours less per week than before SSA made these changes … The number of field office employees declined about 5 percent from 29,114 in FY 2010 to 27,667 in FY 2015.
The annual number of visitors to all SSA field offices decreased from 45.4 million in FY 2010 to 40.7 million in FY 2015. Even as the number of visitors to SSA field offices has declined each year since FY 2010, customer wait times have increased in all 10 SSA regions. For all regions, the average wait time increased from 19 minutes in FY 2010 to 26 minutes in FY 2015 … The number of field office visitors who waited longer than 1 hour for service increased from 2.3 million in FY 2010 to 4.5 million in FY 2015.
SSA continues to face significant service delivery challenges due to the aging of the baby boomer population, and the expectation that many of its most experienced staff members will retire soon. While SSA estimates that retirement and disability beneficiaries will increase from 61 million in 2016 to 86.7 million in 2025, it projects that more than one-third of its workforce will retire by 2022.
Regarding oversight of Social Security Disability Income, the Office of Inspector General’s assessment was gloomy:
While the level of pending initial disability claims decreased, the Agency still faces challenges with pending hearings and appeals. Continued focus on decisional quality is essential to ensure the integrity of the process. SSA ended FY 2016 with almost 568,000 initial disability claims pending. SSA has had a backlog of full medical Continuing Disability Reviews (CDRs) since FY2002. While the CDR backlog decreased recently, it remained at more than 726,000 at the end of FY2015. SSA has increased the number of full medical CDRs completed in recent years. The Agency expects to eliminate the backlog by the end of FY 2019.
Another part of the disability program, the hearings and appeals process, has experienced worsening timeliness and growing backlogs. For instance, the average processing time for a hearing increased 24 percent from 426 days at the end of FY2010 to 530 days in June 2016. Moreover, during the same period, the pending hearing backlog grew 59 percent, from about 700,000 cases at the end of FY2010 to more than 1.1 million cases at the end of June 2016.
Lastly, here is the Office of Inspector General’s take on the Social Security Administration program to encourage people on disability to go back to work:
As far as returning to work, a recent review of the Ticket to Work and Self-Sufficiency Program found that few Ticket-eligible beneficiaries used their Tickets to receive vocational or employment services. In addition, an independent evaluation failed to provide strong evidence of the Ticket Program’s effect on employment and concluded that many successful Program participants might have been equally successful without SSA-financed services or with services provided by state vocational rehabilitation agencies under the payment system that predated the Ticket Program.
Congress has regularly failed to adequately fund the Social Security Administration so it can carry out its duties and properly support the 60 million retired and disabled people who receive benefits, not to mention family members who depend on them. There are multiple reasons for this failure, including conservative Republican opposition to the program and the continuing impact of budget sequestration and spending controls.
But this lack of action makes no sense to me. Social Security benefits now total some $900 billion a year. Better oversight of how these funds are spent would save money while better fulfilling the promises made to some of our most vulnerable citizens.
There is ample room for disagreement over how to reform Social Security. There should be no disagreement over adequately funding the agency to do its appointed job.
And now, I will step off my very high soapbox and get back to answering your questions.
Johanna – Calif.: I am a full-time employee turning 65. I was told by Medicare that I need to sign up. Social Security said I do not. A co-worker told me I need to sign up for Part A even though I am employed. Please help me. I do not want to be penalized. So far, Social Security appeared to be more helpful. Medicare was not helpful at all.
Phil Moeller: Based on what you’ve told me, you do not need to sign up for Medicare, and you will not face any future penalties for not signing up when you turn 65.
If your employer has more than 20 employees, you do not need to sign up for Medicare when you turn 65 as long as you continue to be covered by the employer’s plan. And by law, your employer must offer you group coverage if you’re an active employee.
Further, you have the right — but not the requirement — to sign up for Part A when you turn 65. Part A charges no premiums to people who qualify for Social Security benefits and can come in handy as a secondary payer for hospital expenses not covered by your employer plan. However, if you have a high-deductible health plan, you cannot have Part A and continue contributing to this plan. Also, if you have filed for Social Security benefits, you must get Part A.
Helen: I have purchased your book, and I want to make sure I do the right process in filing. I have turned 66, and my husband already is 70. I have not applied for anything as of yet.
Phil Moeller: You want to file what’s called a “restricted application” for just your spousal benefit, while deferring your own retirement benefit until as late as your 70th birthday, when it will reach its maximum amount.
Your ability to do this is guaranteed to you by a provision of the new Social Security laws that grandfathered the right to file a restricted application (for just their spousal or ex-spousal benefit) for anyone who turned 62 on or before Jan. 2 of this year and who waits until their full retirement age to file this application.
Jerry Lutz is a retired Social Security claims representative who helps me understand how these things work. Here is his guidance about how you should file a restricted application:
To file a restricted application, I tell people to make sure that the remarks on the application contain a statement such as: “I wish to exclude retirement benefits on my own record from the scope of this application.” If they file online, they need to enter this themselves. If they file by phone or in person, they need to review their copy of the application to make sure that the SSA rep included the remark.
Ann – Ga.: My husband and I are 60. He gets SSDI [Social Security Disability Income], and they take $106 out per month for Medicare Part B. I am on Obamacare and pay $68 per month. In trying to save money, would it be possible to stop him paying the $106 and getting him on a cheaper plan on Obamacare?
Phil Moeller: Disabled people on Medicare who are younger than 65 have the option of being covered instead on a state insurance exchange. You should check the available exchange policies and what they cover and compare them to his Medicare coverage. Make sure he’s not losing anything by leaving Medicare. Also, make sure he won’t be penalized later when he signs up again for Medicare. A free counselor with the State Health Insurance Assistance Program should be able to help you with this transition.
Samuel: I just finished reading your book on Medicare. I wish I had known some of the stuff in the book earlier! I have a question. My wife turns 65 this month and will go on Part A and Part B. I am not 65 until next year. Our Modified AGI [adjusted gross income] in 2014 (we file jointly) was an all-time high due to some once-in-a-lifetime events. So the premium for my wife’s Part B will be quite high in December due to extra premiums for high-income earners. Our Modified AGI for 2015, however, was under $170,000. Will the premium for my wife’s Part B go down for January 2017 and rest of 2017? If not, when does her premium start to be based on our 2015 income tax return instead of the 2014 return?
Phil Moeller: Your 2014 MAGI would determine all of your 2016 premiums, and your 2015 MAGI would determine all of your 2017 premiums and so on. I would confirm this with Social Security, which administers this program for Medicare. If they have not yet seen your 2015 MAGI, you would qualify for repayment of any surcharges once the agency does get the numbers.
Evelyn: I am a 77-year-old female and now have a Medicare Advantage plan. Because my plan is not being offered for 2017, I am able to change to regular Medicare with a Medigap policy and also a Part D drug plan. If I take out a Medigap policy with one company, will I later be able to change my Medigap to another company and retain my guaranteed issue rights so that the new insurer must cover me and can’t charge me higher rates because of my health? From what I read in your Medicare book, it seems as though this would not be possible.
Phil Moeller: As you note, you do lose your guaranteed issue rights under the situation you describe. There are special circumstances under which someone can retain these rights. For example, someone on Medigap who goes back to work and gets employer health insurance can later get another Medigap policy with guaranteed issue rights. I always recommend that people also call Medicare (1-800-MEDICARE) or a free counselor with the State Health Insurance Assistance Program to get a second opinion.
Ted: In June of 2016, I was automatically enrolled in Medicare Part A due to receiving SSDI [Social Security Disability Insurance]. I declined Part B at the time, since I am covered through my wife’s employer policy. While it is a decent policy, my deductibles for my cancer treatments cost me thousands of dollars out of pocket. After doing some calculations, it seems I would come out ahead by paying Part B premiums and the annual deductible in 2017. So I think I should apply for Part B to start in January as secondary coverage on my wife’s policy. While this seems like a good approach now, I’m not sure how things will play out as far as my future treatments. I know that I can’t discontinue Part B and then pick it up again without being penalized. What I’m wondering is if I do get Part B for 2017, will I be included under the “hold harmless” clause going forward in the future?
Phil Moeller: To be held harmless for 2017, you need to begin having your Medicare premiums deducted from your Social Security payments in 2016. There is a one-month lag here, so you would have had to apply for Part B in November in order for your first premium to be deducted from your December Social Security payment. While being held harmless might help you next year, it’s not clear how long this will be of much value. As future COLAs rise, Part B premiums for all enrollees would be adjusted so that, over time, everyone would once again pay the same Part B premium (except for those who pay higher-income surcharges).
Sherry: I have read (and re-read) your book on Social Security and just received my Medicare book last week. First of all, thank you for these books! I just got off the phone from an hour-and-20-minute wait to speak with someone at the Social Security Administration, but I did not feel the answer I received was satisfactory. I will be 64 in January. I was married 18 years, divorced for 20 years and never remarried. I want to work until I am 70, and have been given a fantastic opportunity, but it is only a part-time job. My ex-husband had a six-figure income when he retired several years ago. Is it possible for me to draw a spousal benefit on his earnings, continue to work and allow my own Social Security benefit to grow until I am 70? Social Security told me if I filed now that I would get 40.6 percent of his full retirement benefit. Social Security told me I cannot draw his until I am 66 and that if I did, I would have to file and draw my own first. Your book made so much sense, but I can’t quite dig this answer out of it.
Phil Moeller: The Social Security Administration representative is correct. If you file for any benefit before reaching what’s called your full retirement age (66 for you), Social Security rules require the agency to consider that you are filing for all eligible benefits. You wouldn’t get both benefits but only an amount roughly equal to the greater of the two. Doing this would, unfortunately, prevent you from letting your own retirement benefit increase until age 70. If you can wait until 66, you are grandfathered in under last year’s major Social Security changes. You could file what’s called a restricted application just for your ex-spousal benefit, while letting your own retirement benefit grow until as late as age 70, when it will max out, and you can claim it.