Medicare error launches #036;50 million refund

Published 12:00 am Saturday, September 9, 2006

A federal government error that mistakenly disbursed approximately $50 million in refund checks to Medicare recipients has caused a state of confusion among seniors who signed up for prescription drug coverage, according to Drew Bass of Benefit Planners, Inc.

The checks, with an average overpayment of $200, were mailed out in late August.

&#8220When the federal government sends out a $50 million blanket in error, chaos ensues,” said Bass.

Bass has fielded multiple calls from perplexed clients wondering about the checks.

Included with the refund is a letter stating that their monthly premium for prescription drug coverage will no longer be deducted from their Social Security check.

Bass said the government's error has made his job - as well the jobs of other insurance and financial planners - much more difficult.

&#8220It's just another process that confuses the client,” he said. &#8220And not everyone's getting a check. A husband may get a letter and a refund and the wife may not. Then they may call me and want to know where their money is.”

Causing even more problems, seniors who signed up for direct deposit into their bank account may not even know they have the money.

&#8220Then they just receive the letter,” said Bass.

Bass said it is important to realize that this money must be repaid.

Those who received a refund should expect to receive a follow-up letter explaining the error within the next two weeks if they haven't already done so, according to Bass.

Mark McClellan, director of the Centers for Medicare and Medicaid Services, said those affected by the mistake should know that their prescription drug coverage has not been discontinued.

&#8220It's very important for people to know their coverage is continuing,” McClellan told the Associated Press. &#8220There's no disruption at all.”

Approximately five million people have their monthly drug coverage premiums deducted from their Social Security check.