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Medicare Rights Center sues Social Security for misinforming consumers

"Elderly and disabled individuals are being deprived of program benefits that could be used to buy food, prescription drugs, or other necessities."

A national nonprofit consumer group is suing Social Security Administration (SSA) Commissioner Jo Anne B. Barnhart to prevent the SSA from misinforming low-income Medicare beneficiaries about their eligibility for federal assistance in paying health care costs.

The Medicare Rights Center (MRC) filed the lawsuit in federal court in Manhattan on Oct. 22, 2002, alleging that the SSA has sent over one million New Yorkers false information that is deterring people with Medicare from applying for federal savings that amount to $648 per person annually.

"Elderly and disabled individuals are being deprived of program benefits that could be used to buy food, prescription drugs, or other necessities," the lawsuit says.

A spokesperson for the SSA said Barhnhart had not seen the lawsuit and would not comment.

The problem

In 2000, Congress mandated that the SSA send a letter with state-specific information to low-income people with Medicare about the Qualified Individual Benefit (QI-1) and other Medicare savings programs. According to the MRC, letters sent to beneficiaries in New York, Connecticut, and other states misrepresent the eligibility requirements for the QI-1 program.

For example, in New York state, the legislature eliminated the asset qualifications for QI-1 on April 1, 2002, (limited to no more than $4,000 for an individual and $6,000 for a couple), but the SSA letter indicates that these qualifications are still in effect. SSA has been sending the letter in a staggered mailing to 15 to 18 million low-income people since June 2002 and continues to send out the letters containing the misrepresentations.

Currently, the QI-1 program pays the Medicare Part B premiums for more than 100,000 Americans with incomes between 120 to 135 percent of the poverty level ($10,642 to $11,964 for a single person). In 2002, the annual Medicare premium is $648 and will rise to about $704 in 2003.

According to MRC lawyers, they have repeatedly requested that the SSA voluntarily correct the information. The law firm of Hughes, Hubbard, and Reed is serving as lead counsel in the lawsuit on a volunteer basis.

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