History of SSA During the Johnson Administration 1963-1968

ESTABLISHING BENEFICIARY ENTITLEMENT

In implementing the Medicare program, an intensive effort was made to assure that everyone potentially eligible for benefits was informed of his rights under the program and of the actions necessary on his part to obtain the protection it offers. Hospital insurance protection is provided for people aged 65 and over who are entitled to monthly social security or railroad retirement benefits. In addition, people now 65 or over who are not insured under either the social security or the railroad retirement programs are eligible for hospital insurance benefits under special transitional provisions of the law.{17} Voluntary supplementary medical insurance protection is available to virtually all people 65 and over, provided they enroll in this part of the program and pay the required premiums.

To inform people 65 or over of their right to enroll for medical insurance protection and to inform the 32 million people who were not on the social security or railroad retirement benefit rolls of their need to apply to establish entitlement for hospital insurance, a public information campaign was mounted, followed up by direct contact and, when necessary, recontact, with virtually all of the 19 million people aged 65 or over in the country. This was a matter of considerable urgency since the original enrollment period under the medical insurance program was scheduled to end on March 31, 1966 {18} for people who would be 65 before January 1, 1966; those who did not sign up by the deadline would not, under the original law, have another opportunity to enroll until 2 years later and would be required to pay higher monthly premiums.

Initial Enrollment Activities

Before expiration of the March 31 deadline, the Social Security Administration had reached, with information and application forms, just about all of the 19.1 million people who would be 65 or over on July 1, 1966. In the fall of 1965, an application for medical assurance protection, pre-punched and preprinted with the individual's name and social security account number, was mailed, together with an informational pamphlet, to the 152 million people on the social security and railroad retirement benefit rolls, who were automatically covered for. hospital insurance but had to apply for medical insurance coverage. Returns came in from over two-thirds of this group on the first mailing, with 9 out of 10 electing to enroll for medical insurance coverage. This initial contact was followed by subsequent mailings to inform those who had not responded and those who had declined enrollment that they could enroll as late as March 31. Personal contacts were made where necessary through social security district offices and by older people hired for this purpose by the Office of Economic Opportunity.

The 32 million people 65 and over who were not receiving social security or railroad retirement benefits had to file for both hospital insurance and medical insurance protection. Somewhat over a million people in this group were reached individually through joint projects with State and local welfare agencies. With the cooperation of the Internal Revenue Service, a simplified punchcard application was mailed to another million people over 65 who were not beneficiaries. The majority of those who received this mailing were insured under social security but were not eligible to receive cash benefits because they were still working full time. They were entitled to Medicare, however, even though they continued to work.

The Civil Service Commission and the Social Security Administration mailed information to the 300,000 civil service annuitants over 65 who were not social security beneficiaries. This group is eligible for medical insurance protection and some are entitled to hospital insurance protection as well.

In addition to the various projects resulting in direct contact with most people 65 or over, the Social Security Administration mailed information about the program to the administrators of homes for the aged and skilled nursing homes, indicating that social security district office personnel would be glad to go to these homes to take applications from their residents. Excellent cooperation was also obtained from television and radio stations, the press, employers, unions, senior citizen organizations, insurance companies, Blue Cross and Blue Shield organizations, and various citizen groups. Hundreds of meetings were held with the cooperation of mayors and other local officials and organizations and, as a result, hundreds of thousands of people who would not otherwise have been reached were brought in contact with social security representatives.

The Office of Economic Opportunity, in a special project called "Medicare Alert," approved grants to 463 Community Action Programs throughout the Nation to employ older people on a part-time basis to help contact those among the aged who were most difficult to reach. The Medicare Alert projects worked closely with the social security district offices in their respective service areas. Community meetings and programs of direct personal contacts were organized to be sure that the hard-to-reach groups in the community--particularly the uneducated and foreign-language groups--were given an opportunity to make an informed decision about enrolling.

Assistance was received from many other Government agencies including the Post Office Department--which made special efforts in behalf of the Medicare enrollment operation even during the 1966 Christmas rush--and the Department of Agriculture--which helped reach people in rural areas, and, through Rangers in its Forest Service, helped reach people in remote areas. And, to stress the importance of signing up for medical insurance, the President proclaimed the month of March 1966 as National Medicare Enrollment Month.

About 88 percent, or 16.8 million, of the 19.1 million people who would be eligible for medical insurance coverage on July 1 had enrolled by March 31. When the extended deadline was reached on May 31, 17.2 million (90 Percent) had enrolled.

By July 1, 1966, when the health insurance program went into effect, 18.9 million people had established entitlement under the hospital insurance program and 17.6 million, 92 percent of those eligible, were enrolled in the medical insurance program.{19}

Ongoing Enrollment Activities

Every month about 120,000 people reach age 65 and are offered the opportunity to enroll in the medical insurance program. About half of them are already on the social security cash benefit rolls. These beneficiaries are identified electronically as they enter their enrollment period and are advised by mail of their right to enroll in the medical insurance program. In addition to those who may enroll upon attainment of age 65, there is an annual general enrollment period (from January 1 through March 31) {20} for certain people who either could have enrolled previously and did not, or who previously disenrolled.

A number of the methods devised during the initial enrollment period to identify potential beneficiaries who were not entitled to monthly benefits are now being used on an ongoing basis. From combined social security and Internal Revenue Service sources, about 30,000 people who are not eligible for cash benefits can be identified each month as they enter their enrollment period. Programs have also been established with hundreds of large institutions and employers throughout the country through which people are identified as they reach 65. In addition, public information messages emphasize the importance of the decision on enrollment for those approaching age 65.

By July 1, 1967, 19.4 million people were entitled to hospital insurance benefits and 17.9 million people, 92 percent of those eligible, were enrolled in the medical insurance program. In the 6-month enrollment period from October 1, 1967, through March 1, 1968, some 700,000 people were added to the medical insurance rolls in addition to those who enrolled as they reached age 65. About 19.7 million people are currently entitled to hospital insurance benefits, with 95 percent of those eligible enrolled for medical insurance protection.

Medical Insurance Premium Payments

The medical insurance program is financed through monthly premiums paid by those who enroll in the program; equivalent matching payments are made from the general revenues of the Federal Government. The premium rate through March 1968 was $3 per month. {21}

The premiums of people receiving social security cash benefits or railroad retirement or Federal Civil Service annuities are deducted from their monthly benefit checks. People not receiving monthly benefits are billed quarterly for premiums by the Social Security Administration or Railroad Retirement Board. Premiums may be paid for as long as a year in advance, and for individuals financially unable to make quarterly payments, arrangements can be made for monthly payments.

The Social Security Administration now has group billing arrangements with approximately 125 organizations to pay premiums on behalf of groups of enrollees. The primary advantage of these group premium payment arrangements is that they make possible better integration of the group medical insurance plans with Medicare. Some organizations are required by collective bargaining contracts to pay premiums for members of the group; others provide medical care for their members and use medical insurance reimbursement to reduce the cost of such care to their members.

Enrollment and Premium Payment Under State Agreements

Under the Medicare law, States were permitted to enter into agreement with the Secretary, based on a request made before January 1, 1968, to buy in--that is, to enroll and pay the medical insurance premiums--for public assistance recipients aged 65 or over who were receiving money payments under an approved public assistance plan. {22} The State may limit the agreement to cover only individuals who are not entitled to social security or railroad retirement benefits or it may include those entitled to such benefits as well as those who are not.

As of June 30, 1968, 41 States had signed agreements enrolling approximately 1.5 million public assistance money payment recipients in the medical insurance program. {23} Largely as a result of a provision in the law requiring States that buy in to make available to all public assistance recipients at least the same benefits as are covered under the medical insurance program {24}, a number of States decided instead to pay cash assistance recipients an additional $3 monthly ($4 effective July 1, 1968) to cover the premium. Undoubtedly, many people would have been unable to afford their medical insurance protection without the action of the States that "bought in" or assisted welfare recipients in paying the required premiums.

Before entering into a buy-in agreement, the States screened their records to determine the correct social security numbers for public assistance recipients who were to be included under the agreements. They also determined if those recipients had previously enrolled for medical insurance or were eligible for monthly social security or railroad retirement benefits. The initial buy-in enrollment files were then furnished to the Social Security Administration before the effective date of the agreement. Accretions and deletions to this file are reported to the Administration monthly. A major task stemming from buy-in agreements is to assure that premiums are not deducted from the social security or railroad retirement benefits of people covered by these agreements. Social security or railroad retirement beneficiaries who are dropped from buy-in agreements have 3 months after such action in which to withdraw from medical insurance enrollment. If they do not withdraw, premium amounts are deducted from their monthly cash benefit payments.

Enrollment Withdrawals

Relatively few people have expressed regrets about having enrolled in the medical insurance program or any desire to withdraw from the program. People whose premiums are deducted from social security, railroad retirement, or Federal civil service retirement benefit checks--the vast majority of enrollees--had their first opportunity to withdraw from the program during the 6-month general enrollment period that began on October 1, 1967.{25} There were only about 35,000 disenrollments {26} in the general enrollment period--a minor fraction of 1 percent of those who could disenroll--and, as previously noted, during the same period an additional 700,000 people who had failed to take advantage of their first opportunity to enroll or who had withdrawn enrolled in the program.

A monthly average of 1.7 million people are billed directly for their premiums. (The aggregate number was higher because of additions to and deletions from the direct-billing lists from month-to-month.) Since the beginning of the program there have been 154,300 terminations for nonpayment of premiums.{27} However, not all of these terminations can be ascribed to dissatisfaction with the program. Terminations of enrollment for nonpayment of premiums also were due to inability to afford the premiums; some people in this category were later re-enrolled when their State public assistance programs entered into buy-in agreements for welfare recipients.

Footnotes (Footnote numbers not same as in the printed version)

{17} The 1967 amendments to these provisions are outlined in Appendix E.


{18} Public Law 89-384 extended this deadline to May 31, 1966.

{19} A State and regional distribution of enrollments as of July 1, 1966, and July 1, 1967, appears in Appendix B, Exhibits 1 and 2, respectively.

{20} Prior to the enactment of the 1967 amendments, general enrollment periods were to occur in the last 3 months of each odd-numbered year.

{21} On December 30, 1967, the Secretary announced a $1 increase to $4 per month, effective April 1, 1968. For a statement of the actuarial assumptions and bases employed in arriving at the amount of the new premium rate, see Appendix F.

{22} Under the 1967 amendments, the January 1, 1968, deadline was changed to January 1, 1970, and States may also buy in for all aged people eligible to receive medical assistance under an approved title XIX plan.

{23} A list of these States and the estimated number of recipients for whom they were paying medical insurance premiums appears in Appendix B, Exhibit 3.

{24} Repealed by the 1967 amendments.

{25} Under the 1967 amendments, beneficiaries may give notice of withdrawal at any time, effective with the close of the following calendar quarter.

{26} Excludes about 5,000 disenrollments of foreign residents who had enrolled erroneously.

{27} Data excludes beneficiaries terminated for nonpayment whose subsequent death notices were filed.