An insurance agent was trying to help a senior citizen who was not sure if he gets help with his drug costs or his Medicare premium. The insurance agent, sitting with the senior, called Social Security (800-772-1213) and had the senior give permission to Social Security to talk to the insurance agent about what was in his record. The insurance agent knew what questions to ask to determine if the senior gets a low income subsidy for his drug costs.

The Social Security rep asked the insurance agent, “Are you going to sign this person up for a Medicare Advantage plan?”. The agent said she might do that, so the Social Security rep said, “Well, I’m not going to talk to you because you’re just trying to enroll this person in a Medicare Advantage plan”.

The senior then told the Social Security rep to talk to the agent because she was trying to help him.

The senior was already enrolled in a Medicare Advantage plan and wanted to change to a lower-cost plan. Most people are “locked into” their Advantage plan for the rest of 2013, but some people are allowed to change plans. These are folks who get the “Low Income Subsidy” for their drug costs (LIS).

Medicare allows people with LIS to change their Advantage plan or their Part D plan at any time during the year.

The Social Security rep said the senior should hang up and call back when the agent was not with him. The senior and the agent were shocked.

Is this a new Social Security policy? Are insurance agents officially presumed to be taking advantage of senior citizens? Is it a new rule that Social Security will not talk to an insurance agent who is sitting with a senior who is asking for help?

I only call Social Security if I’m helping someone get answers about enrolling in Medicare. I call Medicare when I need to get answers for a senior who is already covered by Medicare.  I know we can ask a Medicare rep if the senior’s record says he or she is enrolled in the Low Income Subsidy or the Medicare Savings Program. Sometimes a senior  has misplaced their Medicare card because they are enrolled in a Medicare Advantage plan. They need their Medicare card info if they want to change to another Advantage plan, and they can ask that a new card be sent to them.

The Medicare phone system (800-623-4227) tells you how much time you will wait until you will be able to talk to a person – and the wait is usually less than five minutes (except during the Open Enrollment Period). I’ve even called Medicare on the weekend and talked with very helpful representatives.

It seems odd that a Social Security representative would not agree to a senior’s request to allow an insurance agent to assist him. Did the Social Security rep think this senior was being held captive by the insurance agent and forced to make the call? The entire incident seems very odd.

I wanted to find the cost to Medicare for Part D, the drug plan for Medicare beneficiaries that went into effect in 2006.  I googled “Part D Medicare budget” and got very good information.

In 2010, Part D made up 13.4% of the Medicare budget, or 68 billion dollars.  So even with seniors paying premiums for their Part D plans that range from $15 to $90 per month, Medicare still paid out $68 billion in 2010 to pay for their drugs!

Then I came across an opinion piece From Forbes magazine (Nov. 20, 2009). The entire piece can be read by clicking on this link, but here are some parts I found particularly interesting:

Bruce Barlett wrote in Forbes:

…Recall the situation in 2003. The Bush administration was already projecting the largest deficit in American history–$475 billion in fiscal year 2004, according to the July 2003 mid-session budget review. But a big election was coming up that Bush and his party were desperately fearful of losing. So they decided to win it by buying the votes of America’s seniors by giving them an expensive new program to pay for their prescription drugs.

Recall, too, that Medicare was already broke in every meaningful sense of the term. According to the 2003 Medicare trustees report, spending for Medicare was projected to rise much more rapidly than the payroll tax as the baby boomers retired. Consequently, the rational thing for Congress to do would have been to find ways of cutting its costs. Instead, Republicans voted to vastly increase them–and the federal deficit–by $395 billion between 2004 and 2013.

However, the Bush administration knew this figure was not accurate because Medicare’s chief actuary, Richard Foster, had concluded, well before passage, that the more likely cost would be $534 billion. Tom Scully, a Republican political appointee at the Department of Health and Human Services, threatened to fire him if he dared to make that information public before the vote. (See this report by the HHS inspector general and this article by Foster.)

…the drug benefit had no dedicated financing, no offsets and no revenue-raisers; 100% of the cost simply added to the federal budget deficit, whereas the health reform measures now being debated [in 2009] will be paid for with a combination of spending cuts and tax increases, adding nothing to the deficit over the next 10 years, according to the Congressional Budget Office. (See here for the Senate bill estimate and here for the House bill.)

….It astonishes me that a party enacting anything like the drug benefit would have the chutzpah to view itself as fiscally responsible in any sense of the term. As far as I am concerned, any Republican who voted for the Medicare drug benefit has no right to criticize anything the Democrats have done in terms of adding to the national debt. Space prohibits listing all their names, but the final Senate vote can be found here and the House vote here.

Bruce Bartlett is a former Treasury Department economist

President Obama has formed a Fiscal Committee to look at how to reduce the government deficit.  With Medicare, Social Security, and the Defense budgets totaling 75% of government spending, it looks like Medicare and Social Security are primary targets for deficit hawks.  The Fiscal Committee is scheduled to present its deficit reduction suggestions to the President in December of this year.

Barbara Kennelly, President of the National Committee to Preserve Social Security and Medicare, spoke to the Fiscal Committee last week.  Here are some of her remarks that address Social Security.

You are faced with the difficult mission of finding ways to reduce the deficit.  On behalf of the 3 million members and supporters of the National Committee to Preserve Social Security and Medicare – and millions of other Americans who support Social Security – I am here to urge you:  while you are considering your macro-economics and deficit numbers – please do not lose sight of the millions of individual people whose quality of life depends on every decision you make affecting Social Security.

Many of my points are sometimes forgotten in the face of today’s fiscal crisis.

- More than 9 out of 10 American workers participate in Social Security – thus changes you make in the program will affect virtually every person in this country.

-Today, 52 million Americans receive benefits from Social Security.

But despite its importance to the American people, Social Security is not a generous program and the vast majority of seniors are not wealthy.  They are average Americans who worked hard all their lives.

-Their median income in retirement is just $18,000

-The average Social Security retirement benefit is only $13,800 a year – $11,000 for women.

- And about 40% of the average senior’s Social Security check goes to health care out-of-pocket costs, even with Medicare

I was in Congress in 1983 during the last major Social Security reform.  We made a number of changes designed to fund the benefits of the baby boomers when they began retiring in the early 2000s.

That reform was immensely successful – it extended the programs’ solvency for over half a century.  And the surplus we built was invested in the safest asset possible – Special Issue Treasury Bonds backed by the full faith and credit of the United States.  I know it is customary for some today to disparage the Trust Funds as if they don’t exist.  But those bonds are no different than any other debt instrument issued by the United States government, and I find it incomprehensible that Congress might someday agree to pay back our foreign neighbors before honoring the debt it owes to the American people.

I understand the drive to reduce the deficit – frankly, I’m as appalled by $1.4 Trillion in red ink this year as you are.  But Social Security did not contribute one thin dime to the deficit – it should not be used as a piggy bank to fix the mistakes of the past.

The American people do not support cutting Social Security in order to reduce the deficit.  American workers rightfully see Social Security as their money – not the government’s. It represents their hard-earned dollars that came out of each and every paycheck throughout their working lives.  They are even willing to pay more to strengthen the program for their children and grandchildren.

They flat-out reject the notion that you can strengthen Social Security by cutting it.

Americans want fiscal sanity returned to Washington, but they don’t believe it should be accomplished by cutting Social Security.

Social Security benefit cuts are the last place you should be looking for deficit reduction, not the first place.