Social Security Administration
Short Time Frame and Workload Challenges Could Affect Timely Implementation of Income-Based Medicare Part B Premiums Gao ID: GAO-07-228R November 17, 2006Beginning January 1, 2007, the premiums for the Medicare Part B Supplementary Medical Insurance program will be based on income, which will raise the premiums for approximately 1.65 million higher-income beneficiaries to as much as 80 percent of the full cost over the 3-year phase-in period. This change, which may be unknown to some beneficiaries, will affect single individuals with incomes over $80,000 and married couples who file jointly with incomes over $160,000. Medicare Part B is a voluntary program administered by the Centers for Medicare & Medicaid Services (CMS) that covers doctors' services, certain outpatient services, and other care. Currently, Medicare Part B beneficiaries generally pay a flat premium of 25 percent (the standard monthly premium) of the cost of the program, with the remaining 75 percent subsidized by the federal government. While CMS administers the program, the Social Security Administration (SSA) is responsible for determining and assessing Medicare Part B income-based premiums once CMS has set the standard premium amount for the year. To better understand how SSA is implementing such premiums, the Senate Committee on Finance requested that we review the process that SSA has established to determine and assess the new premiums.
GAO updated the briefing that we provided to Congressional staff on November 7, 2006 describing the status of SSA's implementation efforts as of November 6, 2006. At this writing, SSA is still in the process of calculating premiums and expects to finish this task by mid-November. Once the calculations are completed, SSA will include the new premium in its cost of living adjustment notices, which will be mailed to affected beneficiaries in late November. Beneficiaries will have 60 days after receiving the notice of the premium increase to file an appeal. However, they may also request a new determination without filing an appeal if they have experienced a life changing event that results in a significant reduction in their income, or they have more recent, amended or corrected tax return information. Time frames for requesting new determinations vary depending on the reason that beneficiaries cite for making such a request. SSA is conducting a number of training efforts to assist staff in dealing with inquiries from affected beneficiaries. For field offices with a high volume of affected beneficiaries, SSA plans to move the resulting work as needed to offices with fewer affected beneficiaries. Despite SSA's planning efforts, there are various issues that could affect its implementation of income-based premiums. For example, SSA has about a month to determine and assess the premiums, and faces an anticipated field office workload increase when beneficiaries contact them for help in understanding the higher premiums or challenging the premium assessment.
GAO-07-228R, Social Security Administration: Short Time Frame and Workload Challenges Could Affect Timely Implementation of Income-Based Medicare Part B Premiums
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United States Government Accountability Office:
Washington, DC 20548:
November 17, 2006:
The Honorable Charles E. Grassley:
Chairman:
The Honorable Max Baucus:
Ranking Minority Member:
Committee on Finance:
United States Senate:
Subject:Social Security Administration: Short Time Frame and Workload
Challenges Could Affect Timely Implementation of Income-Based Medicare
Part B Premiums:
Beginning January 1, 2007, the premiums for the Medicare Part B
Supplementary Medical Insurance program will be based on income, which
will raise the premiums for approximately 1.65 million higher-income
beneficiaries to as much as 80 percent of the full cost over the 3-year
phase-in period. This change, which may be unknown to some
beneficiaries, will affect single individuals with incomes over $80,000
and married couples who file jointly with incomes over $160,000.
Medicare Part B is a voluntary program administered by the Centers for
Medicare & Medicaid Services (CMS) that covers doctors' services,
certain outpatient services, and other care. Currently, Medicare Part B
beneficiaries generally pay a flat premium of 25 percent (the standard
monthly premium) of the cost of the program, with the remaining 75
percent subsidized by the federal government. While CMS administers the
program, the Social Security Administration (SSA) is responsible for
determining and assessing Medicare Part B income-based premiums once
CMS has set the standard premium amount for the year. To better
understand how SSA is implementing such premiums, the Senate Committee
on Finance requested that we review the process that SSA has
established to determine and assess the new premiums.
Enclosed (Enclosure I) is an updated version of the briefing that we
provided to your staff on November 7, 2006 describing the status of
SSA's implementation efforts as of November 6, 2006. At this writing,
SSA is still in the process of calculating premiums and expects to
finish this task by mid-November. Once the calculations are completed,
SSA will include the new premium in its cost of living adjustment
notices, which will be mailed to affected beneficiaries in late
November. Beneficiaries will have 60 days after receiving the notice of
the premium increase to file an appeal. However, they may also request
a new determination without filing an appeal if they have experienced a
life changing event that results in a significant reduction in their
income, or they have more recent, amended or corrected tax return
information. Time frames for requesting new determinations vary
depending on the reason that beneficiaries cite for making such a
request. SSA is conducting a number of training efforts to assist staff
in dealing with inquiries from affected beneficiaries. For field
offices with a high volume of affected beneficiaries, SSA plans to move
the resulting work as needed to offices with fewer affected
beneficiaries. Despite SSA's planning efforts, there are various issues
that could affect its implementation of income-based premiums. For
example, SSA has about a month to determine and assess the premiums,
and faces an anticipated field office workload increase when
beneficiaries contact them for help in understanding the higher
premiums or challenging the premium assessment.
To address the Committee's request, we reviewed relevant statutes and
program regulations on income-based premiums, interviewed officials at
SSA, the Internal Revenue Service (IRS), and CMS, and obtained
supporting documentation on their plans for implementing the income-
based premiums. We evaluated these plans based on the time frame
established in the law for SSA's receipt of income-based data from the
IRS and SSA's schedule to implement the income-based premiums by the
effective date. We also interviewed managers and staff at various SSA
field offices and spoke with Medicare advocacy groups. We did not
assess the procedures used to test IRS and SSA systems for implementing
the income-based premiums. We performed our work between May 2006 and
November 2006 in accordance with generally accepted government auditing
standards.
We provided a draft of the briefing to the Commissioner of the Social
Security Administration on November 9, 2006. In response to our
statement that beneficiaries might not be aware of the income-based
premiums, SSA noted that this information was provided in the 2007
"Medicare and You" handbook, which was sent to all Medicare
beneficiaries by the end of October 2006. SSA also noted that the
current hiring freeze, which could affect SSA's ability to respond to
income-based premium inquiries, was a result of the continuing
resolution under which SSA is currently operating. We considered these
comments, as well as SSA's technical comments, and made changes as
appropriate. We have included the agency's comments in Enclosure II. We
are sending copies of this briefing to the Commissioner of Social
Security, the Commissioner of Internal Revenue, and the Secretary of
Health and Human Services, and other interested parties. Copies will
also be made available to others upon request. In addition, the report
will be available at no charge on GAO's Web site at http://www.gao.gov.
Please contact us at the number shown below if you or your staff have
any questions about this report. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this briefing.
Sincerely yours,
Signed by:
Barbara D. Bovbjerg:
Director, Education, Workforce, and Income Security Issues:
(202) 512-7215:
bovbjergb@gao.gov:
Enclosures:
(130630):
Enclosure I: Briefing Slides:
Social Security Administration: Short Time Frame and Workload
Challenges Could Affect Timely Implementation of Income-based Medicare
Part B Premiums:
Briefing to Committee on Finance:
U.S. Senate:
November 7, 2006:
Introduction:
Medicare Part B is a voluntary program administered by the Centers for
Medicare & Medicaid Services (CMS) within the Department of Health and
Human Services (HHS). The program covers doctors' services, certain
outpatient services, and other care. Medicare is generally available to
individuals 65 and older, people of any age with permanent kidney
failure, and people with certain disabilities after a 24-month waiting
period.
The Medicare Prescription Drug, Improvement, and Modernization Act of
2003 requires that the Social Security Administration (SSA) determine
Medicare Part B premiums based on beneficiaries' income and assess the
new premiums beginning January 1, 2007. As a result, premiums for some
higher-income beneficiaries will increase over 3 years to as much as 80
percent of the full program costs. SSA generally withholds Part B
premiums from beneficiaries' Social Security checks.
The Senate Committee on Finance requested that we review the process
that SSA has established to determine and assess the new premiums.
Methodology:
We reviewed the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 and SSA's regulation to gain an understanding
of SSA's responsibilities and procedures for determining income-based
premiums.
We analyzed relevant documentation and interviewed officials with:
* SSA regarding the agency's policies for calculating and notifying
beneficiaries of their assessed premiums;
* Five selected SSA field offices and officials at various Medicare
advocacy organizations to gain their perspectives on the implementation
of income-based premiums;
* Internal Revenue Service (IRS) about SSA's access to income tax data
needed to determine the premiums and data transfer issues; and:
* SSA and CMS regarding their efforts to inform the beneficiary
community about the implementation of income-based premiums.
We did not assess the IRS and SSA procedures used to test their
systems for implementing the income-based premiums.
We conducted our work from May to November 2006 in accordance with
generally accepted government auditing standards.
New Law Will Make Medicare Part B Premiums Income-based:
In general, beneficiaries pay premiums of 25 percent (e.g., the
standard monthly premium) of estimated Medicare Part B program costs;
the federal government subsidizes the remaining 75 percent from
Treasury's general revenue.
Starting in January 2007, the federal government will reduce its
contribution to Part B premiums for beneficiaries with modified
adjusted gross incomes* of over $80,000 for single tax filers and over
$160,000 for married tax filers who file jointly in accordance with the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003.
This subsidy reduction, known as the Income Related Monthly Adjustment
Amount, will be phased in on a graduated basis over 3 years, from 2007
to 2009. By 2009, affected beneficiaries will pay between 35 and 80
percent of their full Part B premium cost.
*Modified adjusted gross income is adjusted gross income plus certain
tax-exempt interest and other income.
Premiums for High Income Beneficiaries Will Rise Over Three Years:
Table 1: Medicare Part B Premiums by Income Bracket, 2007-2009 (all
amounts are shown in 2007 dollars; income categories and premiums are
expected to rise further in 2008 and 2009)*:
Modified Adjusted Gross Income Category: Single: $80,000 and under;
Modified Adjusted Gross Income Category: Married Couple**: $160,000 and
under;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2007: $93.50;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2008: $93.50;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2009: $93.50.
Modified Adjusted Gross Income Category: Single: $80,000-$100,000;
Modified Adjusted Gross Income Category: Married Couple**: $160,000-
$200,000;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2007: $105.80;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2008: $118.60;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2009: $130.90.
Modified Adjusted Gross Income Category: Single: $100,001-$150,000;
Modified Adjusted Gross Income Category: Married Couple**: $200,001-
$300,000;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2007: $124.40;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2008: $156.10;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2009: $187.00.
Modified Adjusted Gross Income Category: Single: $150,001-$200,000;
Modified Adjusted Gross Income Category: Married Couple**: $300,001-
$400,000;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2007: $142.90;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2008: $193.70;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2009: $243.10.
Modified Adjusted Gross Income Category: Single: more than $200,000;
Modified Adjusted Gross Income Category: Married Couple**: more than
$400,000;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2007: $161.40;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2008: $231.30;
Monthly Premium by Year(all figures are rounded to nearest tenth):
2009: $299.20.
Source: GAO analysis using the announced 2007 Medicare Part B premiums.
We extrapolated the premiums for 2008 and 2009 based on 2007 premium
amounts, without estimating increases in Part B costs due to inflation
and medical cost adjustments, which are not yet known.
* The income brackets and premiums above reflect the amounts that the
government plans to use for 2007. We used 2007 amounts to show the
effect that legislated adjustments would have on the premiums of
beneficiaries at various income levels in 2008 and 2009. Beginning in
2008, the income brackets will be adjusted by the change in the
Consumer Price Index for urban consumers, rounded to the nearest
$1,000.
** Married couples who filed taxes separately, and who lived together
at any time in the tax year, are assessed premiums based on three
different Modified Adjusted Gross Income Categories: 1) $80,000 and
under, 2) $80,001-$120,000, and 3) more than $120,000. The premiums for
categories 2 and 3 will be those amounts listed above for the married
couple categories of $300,001-$400,000 and more than $400,000,
respectively.
[End of table]
Income-based Premiums Will Affect Many Beneficiaries and Slightly
Increase Medicare Revenues:
The Medicare Trustees reported in May 2006 that the rapid growth of
program costs will generate steadily increasing demands for both higher
premiums and more general revenue. Income-based premium payments are
intended as one way to address the fiscal challenges facing Medicare by
requiring beneficiaries over the designated income level to contribute
more to the cost of their benefits.
Of the 40.7 million projected Medicare Part B beneficiaries in 2007,
about 1.65 million beneficiaries will pay a higher income-based
premium. Some of these beneficiaries may not yet be aware they will be
affected by the income-based premium.
CMS estimates that between fiscal years 2007 and 2011, the income-
based premium will increase Medicare revenue by $7.7 billion. In 2005,
Medicare Part B expenditures totaled $151.5 billion; $35.9 billion
(roughly 24 percent) was financed by enrollee premiums.*:
* The remaining expenditures were financed by contributions from the
federal government and from interest earned from investments.
SSA Will Calculate Income-based Premiums and Perform Related Tasks:
Regarding the income-based premium, SSA is responsible for:
* calculating the premium amount for affected beneficiaries based on 2-
year old tax data, provided by IRS as of October 15, or 3-year old tax
data if 2-year old tax data are unavailable (for the 2007 adjustment,
for example, SSA is using 2005 tax-year data available as of October
15, 2006, or 2004 tax-year data if 2005 data are not available);
* informing beneficiaries of the amount of their new premium; and:
* deciding on requests from beneficiaries to recalculate the income-
based premium based on evidence of life-changing events, or under
certain other limited circumstances.
IRS provided SSA with 2005 tax-year data for approximately 93 percent
of the 1.65 million affected beneficiaries, and 2004 tax-year data for
the remaining beneficiaries.
SSA estimates that implementing income-based premiums will cost the
agency an additional $200 million in administrative expenses between
fiscal years 2006 and 2010.
SSA's Regulation on Income-based Premiums Received Seven Public
Comments:
On March 3, 2006, SSA published a proposed regulation to implement
income-based premiums and received seven comments before the comment
period closed on May 2, 2006. The comments included, among others, a
concern about the government withholding a larger share of Part B
premiums from Social Security benefits, plus more specific comments
about:
* the need for more clarity on:
- what qualifies as a significant income reduction because of major
life-changing events and the evidence required to substantiate such
events; and:
- the circumstances under which beneficiaries may request a
recalculation of their premium adjustment; and:
* the short time frame that beneficiaries have to request a
recalculation of premium increases before they go into effect.
On October 27, 2006 SSA published the final regulation in the Federal
Register. SSA restructured the regulation slightly to clarify the
procedures that will be applied to calculate the amount of premium
adjustments.
Beneficiaries May Request a Recalculation of Their Premium:
Beneficiaries may request a recalculation of their premium adjustment
by submitting a request for a new initial determination or a request
for reconsideration.
Beneficiaries may request a new initial determination under the
following four circumstances:
* They have more recent tax data than those used in SSA's premium
calculation;
* They have amended the tax return that SSA used in its premium
calculation;
* They have proof of a corrected tax return; or:
* They have experienced a major life-changing event, which
significantly reduced their income.*:
Beneficiaries may request a reconsideration if they question the
accuracy of SSA's calculation of the premium adjustment.
* SSA's regulation recognizes that, depending on the timing of a life-
changing event, more recent tax information may not be available to
substantiate a reduction in income. In those cases, SSA will accept a
signed statement describing the reduction in income and ask the
beneficiary to provide the tax return when it is available.
There are different time frames for requesting a recalculation:
* For new initial determinations, the time frames vary depending on the
circumstance that the beneficiary cites in making the request. For
example, beneficiaries who experience a major life-changing event
generally have until the end of the calendar year to request a new
initial determination. However, if the event occurs in the last three
months of the year, the deadline is extended until March 31 of the
following year.
* For reconsiderations, a beneficiary must file a request within 60
days after receiving SSA's notice of the premium adjustment. However,
the time frame may be extended under certain circumstances, such as a
death or serious illness in the beneficiary's family or loss of records
due to fire or other accidental cause.
SSA charges the administrative cost of processing new initial
determinations and reconsiderations to the Federal Supplementary
Medical Insurance Trust Fund.
Beneficiaries May Appeal SSA's Decisions:
If beneficiaries are dissatisfied with the results of SSA's
reconsideration, they may file an appeal with the Department of Health
and Human Services' Office of Medicare Hearings and Appeals. During
this process, beneficiaries may request a hearing before an
administrative law judge. Beneficiaries may file such an appeal only if
they have received a decision on their reconsideration request from
SSA.
If beneficiaries are dissatisfied with the administrative law judge's
decision, they may further appeal to the Department of Health and Human
Services' Medicare Appeals Council. After this, dissatisfied
beneficiaries may be entitled to appeal to a federal district court.
SSA and CMS Are Conducting Efforts to Inform Affected Beneficiaries:
SSA and CMS have conducted several efforts to educate beneficiaries who
could be affected by the upcoming income-based premiums. These efforts
consist of the following activities:
* CMS's announcement of the Medicare Part B 2007 premiums in a
September 2006 press release;
* SSA and CMS's collaborative work to describe income-based premiums in
the Medicare initial enrollment package for individuals about to turn
65 or who become eligible for Medicare based on their disability
status, and the 2007 "Medicare and You" handbook, which CMS sends to
all Medicare beneficiaries by the end of October of each year; and:
* SSA plans to educate tax preparers and attorneys who may be assisting
affected beneficiaries in preparing tax returns, beginning in mid-
November.
SSA plans to include personalized information on the 2007 income-based
premium adjustment in its annual Cost of Living Adjustment notice that
will be sent to each affected beneficiary in late November. According
to SSA officials, while this notice will provide information on the
2007 premium adjustment and how it can be contested, it will not inform
beneficiaries of the impending increases in 2008 and 2009. While SSA
has information on the future year increases on its Web site, it is
unknown how many beneficiaries are aware of this information.
Remaining Time Frame to Implement Income-based Premiums Is Short:
SSA will have about a month to complete the following activities
necessary to implement income-based premiums by January 1, 2007:
* Electronically calculate premiums using tax data from IRS between the
last week of October and mid-November;
* Provide specialized training to SSA's 800-number service
representatives and field office staff beginning in late October;
* Provide field offices with information on the number of affected
beneficiaries in their area for workload planning by mid-November;
* Electronically incorporate premium information into annual Cost of
Living Adjustment notices for affected beneficiaries by November 18;
and:
* Mail the notices in late November.
In late October 2006, IRS transferred October 15 tax data to SSA on
Medicare Part B beneficiaries in accordance with the law.
At this writing, SSA is calculating the premiums for affected
beneficiaries and is planning to mail notices to inform them of their
new premiums by the end of November.
In order to prevent any delays in mailing premium notices, SSA
officials told us that they tested their systems for transferring data
with both the IRS and the vendors under contract to print and mail the
notices. IRS and SSA officials told us that their three tests of
simulated data have been successful. Furthermore, SSA told us that the
tests with the vendors were also successful.
Should problems occur in calculating premiums and preparing notices,
SSA officials told us that they plan to rearrange agency work
priorities to assure that these tasks are completed on time.
SSA may move work if certain field offices are disproportionately
affected by visits and calls from beneficiaries with questions about
their income-based premiums. SSA estimates receiving:
* 337,000 inquiries;
* 35,000 change of income requests; and:
* 141,000 major life-changing event requests.
While these estimates are for fiscal year 2007, SSA expects that the
bulk of this workload will take place between November 2006 and
February 2007.
Several Factors Could Affect SSA's Timely Implementation of Income-
based Premiums:
SSA's timely implementation of income-based premiums could be affected
by:
The short time frame in which SSA has to perform various tasks for
issuing premium notices by the end of November;
SSA staff shortages and the current hiring freeze could make it
difficult for 800-number service representatives and field office staff
to respond to increased call and visitor volumes, resulting from
beneficiaries questioning or challenging their premium determination or
requesting a premium recalculation; and:
Concurrent year-end activities, such as referring beneficiaries to CMS
who contact SSA with questions about Medicare Part D during the "open
season" for beneficiaries who wish to switch their drug plan,
processing applications for the Part D low-income subsidy, and
processing other SSA workloads during this period.
[End of Section]
Enclosure II: Comments from the Social Security Administration:
Social Security:
The Commissioner:
November 15, 2006:
Ms. Barbara Bovbjerg:
Director, Education, Workforce and Income Security Issues:
U.S. Government Accountability Office Room:
5968:
441 G Street, NW:
Washington, D.C. 20548:
Dear Ms. Bovbjerg:
Thank you for the opportunity to review and comment on the draft
briefing report, "Social Security Administration's Plans for
Implementing Income-Based Medicare Part B Premiums" (GAO Job Number
130630). Our comments on the report (two copies) are enclosed.
If you have any questions, please have your staff contact Ms. Candace
Skurnik, Director, Audit Management and Liaison Staff, at (410) 965-
4636.
Sincerely,
Signed by:
Jo Anne B. Barnhart:
Enclosures (2):
Comments On The United States Government Accountability Office (GAO)
Draft Report, "Social Security Administration's Plans For Implementing
Income-Based Medicare Part B Premiums"
Thank you for the opportunity to review and comment on the draft
briefing report regarding the Social Security Administration's (SSA)
plans for implementing income-based Medicare Part B premiums.
In the letter transmitting the briefing slides, you indicate that the
income-based Medicare Part B premium issue may be unknown to many
beneficiaries. We would like to point out that the Centers for Medicare
& Medicaid Services (CMS) described income-based Medicare Part B
premiums in the Medicare and You handbook for 2007 under the
introductory section entitled, "Medicare Basics," subtitle, "What's new
or important in Medicare for 2007" and also on page 11 of the handbook.
This handbook was sent to all Medicare beneficiaries by October 31,
2006. Also, you indicate that SSA is responsible for determining and
accessing Medicare Part B premiums. CMS establishes the standard
premium and income related rates and is responsible for the publication
of this data in the Federal Register. We also would suggest amending
the sentence that refers to the cost of living adjustment notices to
include the word "annual" before "cost of living."
In regard to the slides, we provide the following comments:
* Introduction, page 2, first bullet, last sentence: Please add "after
a 24-month waiting period" at the end of the sentence.
* Introduction, page 2, second bullet, second sentence: Please add
"full" after "the" and before "program costs.":
* Income-based Premiums Will Affect Many Beneficiaries and Slightly
Increase Medicare Revenues, page 7, second bullet: As mentioned in the
comments above regarding the transmitting letter, CMS provided a
description of income-based Medicare Part B premiums in the Medicare
and You handbook for 2007, in the introduction and on page 11.
* SSA Will Calculate Income-based Premiums and Perform Related Tasks,
page 8, third major bullet: We wish to correct the statement on the
administrative expenses; i.e., the estimate of $200 million is for
fiscal years 2006 through 2010.
* SSA Will Calculate Income-based Premiums and Perform Related Tasks,
page 8, footnote: The IRS will not provide SSA updated tax-year data as
it becomes available. We suggest the following language for the
footnote:
When IRS provides 3-year old tax-year data, at the time of the next
annual exchange, they will provide the 2-year old information if it is
available.
* SSA's Regulation on Income-based Premiums Received Seven Public
Comments, page 9, first major bullet, second indented bullet: The
public comment regarding the short time frame was in reference to the
request for reconsideration. We suggest substituting "request a
reconsideration of for the word "challenge.":
* Beneficiaries May Appeal SSA's Decisions, page 12, first bullet:
Substitute the words "SSA's reconsideration" for "SSA's decision.":
* Beneficiaries May Appeal SSA's Decisions, page 12, second bullet:
Beneficiaries are entitled to appeal to a Federal district court.
Please change "may be" to "are.":
* SSA and CMS are Conducting Efforts to Inform Affected Beneficiaries,
page 13, second major bullet: While it is true that the notice will not
inform beneficiaries of the increases in 2008 and 2009, SSA posted fact
sheets on its website October 27, 2006 that contain the following
language:
In 2007, the government portion will be reduced for higher income
beneficiaries who will begin paying a larger percentage of the premium.
During this first year, higher income beneficiaries will be responsible
for only one-third of the income-related adjustment. By 2009, the end
of the transition period, these higher income beneficiaries will pay a
monthly premium equal to 35, 50, 65, or 80 percent of the total cost,
depending on their income level.
* Remaining Time Frame to Implement Income-based Premiums is Short,
continued, page 15, second major bullet, first sentence: The word "or"
should be changed to "and.":
* Several Factors Could Affect SSA's Timely Implementation of Income-
based Premiums, page 16, second major bullet: It would be helpful to
point out that the current hiring freeze is a result of the continuing
resolution under which SSA is currently operating, and that potential
staffing shortages could make it difficult for 800-number service
representatives and field office staff to respond to increased call and
visitor volumes resulting from beneficiaries questioning or challenging
their premium determination or requesting a premium recalculation.
[End of Section]
Enclosure III: GAO Contact and Staff Acknowledgments:
GAO Contact: Barbara Bovbjerg (202) 512-7215 or bovbjergb@gao.gov:
Acknowledgments: The following team members made key contributions to
this report: Blake Ainsworth, Assistant Director; Jeff Bernstein; Kyle
Browning; Mary Crenshaw; Rosamond Katz; Sheila McCoy; and Paul Wright.
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