Medicare and Social Security Numbers

September 24, 2008

Big government is offering senior citizens a trade: secure your money or your health.

Thanks to Medicare, they can’t have both.

Medicare requires Seniors to carry at all times a card emblazoned with their social security number. To receive care – anything from a doctor’s visit to medication – they must hand over the card and their social security number, a key to unlocking their credit, bank accounts and assets, built up over a lifetime, to fraudsters.

As a result, the social security numbers of 42 million Americans receiving services under the government program are stamped on claim forms, correspondence, applications and a myriad of other paperwork, some of which no doubt wends its way into public view.

An oversight? A bureaucratic snafu? Hardly.

Medicare has no plans to change its system, despite repeated warnings from the Inspector General of the Social Security Administration that the agency is putting millions of Americans at risk for identity theft.

Identity theft is the fastest growing crime in North America. In 2004, government watchdogs estimated 3 million Americans had their identity stolen. Last year, the Federal Trade Commission (FTC) put the number of victims at 9 million.

The FTC warns consumers to protect themselves, in part, by guarding their social security number, which can serve as a key for criminals to steal bank accounts, financial assets and credit. Social Security tells Americans not to carry the number or their social security card.

Most private health insurers already got the message. They’ve eliminated use of social security numbers on claim forms and health cards. States are passing privacy laws. The Department of Defense has removed the number from 4.5 million health cards and is eliminating it from military identification badges. The Veterans Administration is taking similar action. So are other federal agencies.

Not Medicare.

Despite the threat of identity theft, Medicare still instructs the elderly to carry their Medicare card with them when they are away from home.

Why put the most vulnerable population at risk?

It costs too much. Medicare estimates it will take 13 years and $300 million to replace social security numbers. That, the agency says, is money better spent inspecting nursing homes and hospitals and making sure that doctors are paid on time. Besides, there’s little evidence that Medicare cards themselves have lead to identity theft.

The Social Security Administration takes a different view. So does Congress.

“Although there are no data on the extent to which Medicare cards contribute to identity theft, each time an individual divulges his or her SSN, the potential for someone to illegally gain access to personal information increases,” wrote Patrick P. O’Connell, Jr., the inspector general for the Social Security Administration in a May 2008 report.

O’Connell added: “We do not believe a Federal Agency should place more value on convenience than the security of its beneficiaries personal information.”

The Social Security Administration doesn’t have authority to block Medicare from using the number. And Medicare – a federal agency — isn’t subject to state law.

Congress does have authority. And Sen. Charles Schumer, D-NY, has filed legislation to force Medicare to change its ways.

Schumer’s proposal would take money from the Department of Health and Human Services to pay for the changes.

“It is unthinkable that Medicare leaves its beneficiaries so wide open to identity theft by continuing to print social security numbers on its identity cards,” Schumer said in a prepared statement.

Here’s some tips to protect yourself from identity theft.