Processing Error Causes Medicare Lapse for 250,000 Seniors
Processing Error Causes Medicare Lapse for 250,000 Seniors
June 14, 2019

As the result of a processing error, a quarter of a million Medicare beneficiaries may receive bills for up to five months of premiums. Don’t toss this bill in the garbage; it is not a mistake or scam!

The processing error that occurred in January caused premiums to not be deducted from some Social Security checks. Insurance plans were also not paid. The Department of Health and Human Services stated the error may affect people that enrolled in a Medicare Advantage Plan or Medicare Prescription Drug Plan that started on January 1. Correct deductions and payments to insurers via Medicare and Social Security will resume this month or next.

Insurers will be required to send bills directly to clients for the unpaid premiums. The amount could be hundreds of dollars, as premiums can run as high as $300 per month. Impacted insurers must allow their members at least two months from the billing date to pay and also offer a payment plan for those who cannot afford to pay several months of premiums at once. If a member is following a payment plan, insurers shall not drop coverage for failure to pay premiums.

The timing of this error was unfortunate as it coincided with the annual cost of living increase. It was easy to consider the increase in the check as part of the usual January change and not notice the lack of premium deduction.

The Department of Health & Human Services does have some information regarding this issue if you follow this link:

Treasury Circular 230 Disclosure

Unless expressly stated otherwise, any federal tax advice contained in this communication is not intended or written to be used, and cannot be used or relied upon, for the purpose of avoiding penalties under the Internal Revenue Code, or for promoting, marketing, or recommending any transaction or matter addressed herein.

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