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Mark Miller: Remaking Retirement

Dealing With Social Security and Medicare During the Coronavirus Crisis

Things have become more complicated, writes contributor Mark Miller.

Editor's note: Read the latest on how the coronavirus is rattling the markets and what investors can do to navigate it.

Aside from the U.S. Postal Service, no federal agency touches more American lives every year than the Social Security Administration. Sixty-nine million people currently receive Social Security benefits, and nearly everyone will at some point in their lives. The Administration also plays a critical customer-service role for the massive Medicare system.

But just like all government agencies and businesses, Social Security and Medicare are scrambling during the coronavirus pandemic to balance their need to keep operating against the safety of the public and its own workforce.

Here's a look at some important things you should know if you need to interact with Social Security and Medicare during the crisis. The situation has been evolving fast and further changes could develop; we'll update this article as necessary.

Social Security
Social Security closed its network of more than 1,200 field offices to the public in March. This move makes good sense. Social Security field offices often experience long delays, with dozens of people sitting in close quarters in waiting rooms--and very often, visitors are elderly or disabled, the very people most at risk of contracting the coronavirus.

The offices assist thousands of people every day with applications for retirement, disability, and Medicare benefits. Some staffers still are reporting for work at the field offices--and that has been a source of friction between the agency and the unions that represent the Social Security workforce, which have been pushing for as much telework as possible.

Staff members continue to see people in person for only a limited number of transactions. Such transactions include reinstatement of benefits in dire circumstances; assistance to people with severe disabilities, blindness, or terminal illnesses; and people in dire need of eligibility decisions for Supplemental Security Income or Medicaid eligibility related to work status. Those seeking these services must call for an appointment in advance; you can find the contact information here.

Otherwise, Social Security is handling most routine business via its toll-free line (800-772-1213) and its website.

Since the agency will be interacting with people more by phone than ever, it's important to remember common-sense protections against fraud and scams. Hard as it is to fathom, scam artists are taking advantage of this terrible crisis to ramp up identity theft and other fraud schemes.

As a reminder, Social Security generally only contacts people who have recently applied for benefits or to update the records of those who are receiving benefits, a spokeswoman says. The agency also calls people who have requested a callback, including those with scheduled appointments. The agency will never call to tell you that your Social Security number has been suspended or to demand payments or ask for credit card information.

Dealing with the agency by phone likely will come with frustrations. Years of budget cuts have left the agency struggling to provide quick customer service, and the field office closure only will make things worse. Social Security is urging people to transact business wherever possible via its website, where it is possible to claim benefits, check the status of applications and appeals, request replacement Social Security cards, and download your current statement of benefits. The website also has a section with frequently asked questions. You will need to set up an account on the site--a good thing to do anyway, especially since Social Security no longer mails out annual benefit statements.

If you need guidance on making a decision about a Social Security claim, consider consulting a financial planner. Help may also be available through your workplace 401(k) plan, since many offer financial advisory services, or use one of the online services that can help you weigh optimization strategies, such as Social Security Solutions or NewRetirement. Some of these charge a fee, and others are free.

Medicare Coverage and COVID-19
What happens if you contract the coronavirus and you're covered by Medicare?

Much of the healthcare you might need already was covered before the crisis began, and Medicare has been making changes to address the crisis.

Tests for COVID-19 ordered by a healthcare provider are covered under Part B (outpatient services), and any copay or deductible amounts have been waived. Outpatient services related to COVID-19 are covered under Part B, and if you require hospitalization, it will be covered under the usual Medicare Part A rules. If a vaccine for COVID-19 becomes available, it will be covered under Part B.

What about skilled nursing facilities? The rules here have been revised during the crisis.

Typically, Medicare covers care in a skilled nursing facility for up to 100 days after a qualifying hospitalization. During this crisis, patients can be covered if they need to be transferred to skilled care to make room at hospitals or need that care because of the COVID-19 emergency, regardless of whether they were previously hospitalized.

For enrollees in the traditional program, Medicare covers all costs for 20 days, and there is a daily copay of $176 after that. The most popular Medigap supplemental plans pick up 100% of that additional cost. For Medicare Advantage enrollees, costs vary by plan.

Medicare does not cover long-term stays in long-term-care facilities.

The network restrictions usually found in the Medicare Advantage and Part D drug programs also have been relaxed. Advantage plans have been instructed by Medicare that they must cover services at out-of-network facilities that participate in Medicare and charge enrollees affected by the COVID-19 emergency no more than in-network rates.

Drug plans often require enrollees to use preferred retail or mail-order pharmacy networks. During the crisis, Medicare is permitting plans to relax these restrictions--but this is not a requirement, so check with your plan.

However, Part D plans are being required to issue up to a 90-day supply of covered drugs to enrollees who request this, which is in line with the Centers for Disease Control and Prevention's recommendations to everyone.

Medicare Enrollment and COVID-19
If you are enrolling in Medicare for the first time this year, the process should go smoothly if you're enrolling in your initial enrollment period--the three months before, the month of, and the three months after your 65th birthday.

If you already are receiving Social Security, you will receive your Medicare card automatically for Part A and Part B. If you are not on Social Security (more likely, because you've been working), you'll need to sign up. Do that online or by calling Social Security's toll-free number.

Keep in mind that there can be a gap, ranging from one to three months, before Part A and Part B coverage starts, depending on when you sign up during the initial enrollment period. However, Part A coverage is retroactive up to six months, back to the first month that you were eligible for Medicare. You will also want to enroll in a Part D drug plan and a Medigap supplemental plan, or in a Medicare Advantage plan.

Of course, you might be enrolling now if you were working past age 65 and stayed on your employer's insurance to this point, but now have lost your job as the economy has ground to a near standstill. At this point, you can take advantage of a special enrollment period that is available to you up to eight months after you lose coverage from employment.

But in this situation, you will need to navigate carefully because of the stiff late-enrollment penalties that sometimes hit people who delay Medicare enrollment beyond age 65. For Part B, the penalty is 10% lifetime for each 12-month period past the otherwise-mandatory sign-up age of 65. (There also are penalties for late Part D enrollment, but they are less severe.) Sticking with employer coverage--for you or a spouse--is the only accepted reason for delaying Medicare enrollment past age 65, thereby allowing you to avoid these penalties.

But here's the rub: Taking care of this sign-up process normally is handled through your local Social Security office, because of the special paperwork you will need to submit in order to document that you formerly were employed and covered by workplace health insurance.

The best way to get the process started is to contact your local Social Security office by phone. The office can advise you on the forms and supporting documents that you'll need to prove that you had employer coverage up to this point and will instruct you about where these should be sent. Request a "protected filing date" and proof of receipt from the office. This will create a record that you applied for benefits on that date, which could affect the date your coverage begin.

Social Security Resources
Social Security: The Inside Story, by Andy Landis. This is an easy-to-read guide that puts things in very digestible terms. Landis is a former Social Security employee.

Get What's Yours: The Secrets to Maxing Out Your Social Security, by economist Laurence J. Kotlikoff and journalists Philip Moeller and Paul Solomon. Very comprehensive.

The Social Security Claiming Guide, by the Center for Retirement Research at Boston College. This free PDF download packs most of the critical information into a handy digest form.

Fee-based online tools: Social Security Solutions offers a variety of fee-based services, with price depending on how much personal assistance you want. Maximize My Social Security is powered by ESPlanner, a broader financial-planning software application.

Free online tools: The Social Security Administration Retirement Estimator tool assesses benefits based on your personal earnings record, but you can't run spousal or survivor scenarios. The AARP Social Security Benefits Estimator offers a calculator that lets you do "what if" planning for different claiming ages and estimate the percentage of your living expenses that will be covered by Social Security. NewRetirement.com offers a calculator that allows individuals to run "what-if" scenarios for claiming at various ages. It does not offer spousal coordination analysis.

Medicare Resources
If you are signing up for Medicare for the first time, deciding on original Medicare or Medicare Advantage is a critical question. See this article I wrote recently on the topic for The New York Times and this video discussion with Morningstar's Christine Benz.

The Kaiser Family Foundation's website has an FAQ page on Medicare and COVID-19. C.M.S. has posted a page of COVID-19 information and resources on its website.

If you need help with Medicare enrollment, free counseling is available from the national network of State Health Insurance Assistance Programs, known as SHIP. Find your state SHIP here.

The nonprofit Medicare Rights Center runs a free national Medicare help line, which can be reached at (800) 333-4114.

Mark Miller is a journalist and author who writes about trends in retirement and aging. He is a columnist for Reuters and also contributes to WealthManagement.com and the AARP magazine. He publishes a weekly newsletter on news and trends in the field at Retirement Revised. The views expressed in this column do not necessarily reflect the views of Morningstar.com.