The Congress Should Consider Amending the Medicare Secondary Payer Provisions To Include Disability Beneficiaries

Gao ID: HRD-85-102 September 30, 1985

Over the past several years, Congress has amended the Social Security Act to require that, when beneficiaries between the ages of 65 and 70 and those with end stage renal disease are covered under employer-sponsored group health insurance, private insurance pays for medical services before Medicare. Because of congressional actions to make Medicare the secondary payer for other beneficiaries covered under group health plans, GAO estimated how much could be saved by extending these provisions to include disabled Medicare beneficiaries.

GAO found that persons who receive social security disability payments for 24 consecutive months become eligible for Medicare benefits since they cannot work and are not covered under an employer group health plan. As of 1985, there were about 2.9 million Medicare disability beneficiaries. However, if their spouses are employed and enrolled in a plan that covers the disabled, under current law, the group health plan is a secondary payer to Medicare. GAO estimated that, if all employers would be required to provide group health insurance as primary to Medicare as required for end stage renal disease benefits, the maximum savings available to Medicare would be about $491 million in fiscal year (FY) 1986. If Congress decides to pass the legislation to make the group health insurance primary only when employers have 20 or more employees, then the savings would be reduced to about 23 percent. GAO believes that, if the legislation is passed, safeguards should be adopted to preclude discrimination against spouses of disabled beneficiaries.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Michael Zimmerman Team: General Accounting Office: Human Resources Division Phone: (202) 275-6195


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