As individuals retire or age into Medicare, their insurance situation can change dramatically. There are a multitude of options open to those with Medicare. The terms are different, the prices are different, the products offered are dramatically different each year.
The purpose of this column is to give those who are eligible for Medicare, or soon to be eligible for Medicare, some understanding of their insurance options and how it could impact their health and finances.
These questions and answers are meant as a guide to help you understand the complex questions you are now thinking about. Each individual's specific situation may create a different solution. You shouldn't necessarily do what your friends, family and neighbors do.
Q: I have heard that Social Security will no longer issue paper checks. What alternatives do we have to receiving our monthly payments?
A: As of March 1, the Social Security Administration (SSA) will begin requiring all Social Security enrollees to use direct deposit or Direct Express cards to receive their monthly Social Security payments. Social Security payments will not be received via a paper check in the mail.
For some time SSA has been moving away from paper checks. These paper checks are very costly to print and mail. The paper checks also are easier to steal and get lost. Those paper checks are harder to trace than the direct deposit method, and it takes longer to replace a lost or stolen check.
If you file a concern regarding a missing paper check, SSA looks into the check issued, when it was mailed, expected arrival date, whether it has been cashed, etc.
Then once SSA has determined the check has not been cashed, they reprint it and then mail the appropriate amount to the individual. If it has been cashed, additional traces must be done to determine who cashed it and when. This can take a number of days for Social Security to research and for you to receive your rightful payment. In contrast, a direct deposited check can be traced quicker and reissued immediately. This reissuing is simply a new direct deposit to the correct account, usually within two or three days.
Setting up direct deposit is easy, if you have not already done so. You need to inform Social Security of the bank you use and your appropriate account information. Once they have that information, your check will be direct deposited to your account on the appointed day each month.
When talking with staff from Social Security, the most common problem with direct deposit is when individuals change banks or accounts and forget to notify Social Security of the new account information.
Many times the bank staff helps individuals to remember this transition, but sometimes both the individuals and the bank miss this. In this situation SSA would make the appropriate payment to an account that no longer exists. Social Security is notified by the bank of the problem. Individuals catch this mistake when they find they don't have the money they thought they should have in their account.
As I noted earlier, once this mistake it noted, it can quickly be corrected with the appropriate direct deposit made to the new account information, usually within a couple of days. You will get your money much sooner than the paper check scenario.
Some individuals, for whatever reason, do not have or do not want a bank account. For those beneficiaries, there is a relatively new service called Direct Express.
Direct Express is a debit card offered by MasterCard, which allows you access to your benefits without having a bank account or getting a paper check. Your debit card is credited each month with your monthly benefit amount. This account works like a debit card from a bank, but the only amount in this account is your benefit amount. It is not affiliated with a bank, but is a debit MasterCard. You can use the debit card to make purchases anywhere that MasterCard is accepted. You can use an ATM, banks or credit unions anywhere in the country to get cash. You can also get cash back with purchases at many retail locations.
This debit card has a Personal Identification Number (PIN) and your funds are FDIC insured. As you use your debit card your balance obviously goes down, money is carried over from month to month, so you do not have to use your entire benefit amount each month. It is almost the opposite of a credit card. A credit card starts at zero and accumulates debt, which you pay back later. With this debit card, your money is there to start with, and your purchases and withdrawals are subtracted from your account as you make them.
Your balance accumulates over time if you don't spend all your monthly benefit. This amount is then available to you in the future. I have attached some policies from the SSA.gov website for your review. I could restate it, but why not quote it directly?
"Can I use the card without any fees?
Yes, it is possible to use your card for free. There is no sign-up fee and no monthly account fee. Many other services are provided free of charge, including:
Purchases at retail locations, cash back with purchases, or cash withdrawals through bank or credit union tellers;
One ATM cash withdrawal for each deposit posted to your account each month when using a Direct Express card network ATM;
Optional notification of deposits to your debit card by phone, email or text message;
Optional low balance alert when your account balance falls below a certain level; and
Access to the toll-free customer service number or website 24 hours a day, seven days a week.
If your card is lost or stolen it can be replaced. There are some fees associated with the account.
This Direct Express Debit MasterCard could be a useful alternative to those individuals who do not have a bank account to have their Social Security Benefit deposited into. Like all debit cards, it is important to keep this card and your PIN in a safe place. If it is lost, missing or stolen notify SSA immediately.
Here is the SSA contact information. You may want to contact SSA either at the website, www.SSA.gov or the toll free national number of 1-800-772-1213 or the Local SSA office at 321 Hazeltine Ave. Jamestown. Their number is 1-877-319-3079. The Dunkirk SSA office is at 437 Main St. Suite 2 Dunkirk. Their number is 1-888-862-2139.
ATM cash withdrawal, surcharge may apply
$0.90 each withdrawal
Monthly paper statement mailed to you
$0.75 each month
Direct Express bill pay
$0.50 each time
Funds transfer to a personal U.S. bank account
$1.50 each time
$4 after one free each year
Overnight delivery of replacement card
$13.50 each time
International ATM cash withdrawal - currency conversion fee (3 percent) will be added
$3 plus 3 percent each withdrawal
International transaction outside U.S. -currency conversion fee (3 percent) will be added
3 percent each transaction
*After any free withdrawals you may be entitled to, as explained in "Can I use the card without any fees?"
Janell Sluga is a geriatric care manager certified and works for Senior Life Matters, a program of Lutheran Senior Housing, and has worked in Chautauqua County with seniors for more than 18 years. She is HIICAP (Health Insurance Information, Counseling & Assistance Program) counselor-trained by Office for the Aging. She does not sell insurance or represent any insurance company. She is an unbiased source of insurance and education to help seniors choose the best option for them.