Drug-Plan Woes Spread Past Medicare

Social Security has been so overwhelmed helping seniors cope with the new Medicare drug program that other services are starting to suffer, a senior government official said in a candid internal e-mail released Friday.

A large backlog of cases is getting worse, and the agency is cutting back on audits that save the government money.

“It’s not a rosy picture, and the news doesn’t get better,” Deputy Commissioner for Operations Linda S. McMahon wrote to operations employees.

The Social Security Administration is scrounging for money to pay overtime, McMahon wrote, and will have to cut back on other priorities, though monthly retirement checks for 48 million Social Security beneficiaries will not be affected.

“I won’t try to kid you,” McMahon wrote employees. “This is going to be a very difficult year.”

On some days, about one in three callers to Social Security’s 800 number has been getting a busy signal, she wrote. The agency’s 1,300 local offices have been getting as many as 60,000 extra visitors a day -- a 40% increase from the fall.

McMahon’s Jan. 21 e-mail was released by Rep. Henry A. Waxman (D-Los Angeles). His office said it verified the authenticity of the message, which is labeled “Difficult Times.” Waxman called for immediate congressional action to restore a recently enacted cut of about $200 million in Social Security’s administrative budget.

“The problems faced by the Medicare program in implementing the benefit are spilling over and having significant impacts on the Social Security program,” he said in a letter to House Speaker J. Dennis Hastert (R-Ill.).

McMahon testified Thursday before the Senate Special Committee on Aging about her agency’s effort to assist Medicare with financial subsidies for low-income seniors, called “extra help.” At least 4 million people have applied for the aid, of whom about 1.4 million qualified.

In her testimony, McMahon did not recite the litany of problems detailed in her e-mail. Instead, she thanked Congress for “providing [Social Security] with the resources we have needed to begin this challenging process.”

In a statement issued Friday, the agency said: “As the Social Security Administration handles the increased phone calls and office visits associated with the new Medicare prescription drug program, we continue to provide [financial] benefits and assistance with timeliness and professionalism. As always, we remain dedicated to providing the best possible service to the American people.”

Although jammed phone lines have been widely reported at Medicare offices and at private insurance plans administering the drug benefit, problems at Social Security have largely gone unnoticed.

In her e-mail, McMahon noted that some employees had warned that the agency would run into trouble trying to juggle its regular duties and the task of helping seniors enroll for the complex prescription program.

“Those of you on the front line have been expressing your deep concern that [Social Security] is not positioned well to help people understand, enroll in and negotiate” the Medicare drug program, she wrote. “Now we are seeing the consequences of that fact. Our national 800-number network has been overwhelmed for weeks.... “

With phone centers and offices swamped, a large backlog of cases at Social Security processing centers will keep growing, she warned.

The backlog “will be exacerbated by the need to put more people on the phone to bring down the busy rate and keep people from needing to visit field offices,” McMahon wrote. “Of course, if we aren’t careful, we will generate more calls and visits from the folks whose [cases] will have to pend longer” in the processing centers.

Although the law that created the Medicare drug benefit provided extra funding for Social Security in 2004 and 2005, it earmarked no funds for this year, when the agency is facing its largest burdens, Waxman said.

Instead, Congress cut the agency’s administrative budget from $9.3 billion in 2005 to $9.1 billion in 2006.

The cuts mean “we will not be able to replace all the employees we lose to retirement this year or accomplish all the automation projects we had intended to do to streamline work processes,” McMahon wrote.

To free up staff, the agency has received White House permission to cut back on disability reviews, McMahon wrote. The reviews, which determine whether certain beneficiaries still qualify to receive monthly assistance, save the government money.