President Joe Biden’s nominee to head the Social Security Administration promised senators on Thursday that he would fix problems the agency has caused as it tries to recoup billions of dollars each year by mistakenly overpaying beneficiaries.
At his confirmation hearing Thursday, former Democratic Maryland Gov. Martin O’Malley said he would make it an “absolute priority” to reduce overpayments and improve the application process for millions of people, often asked for refunds years later.
At least seven senators identified overpayments as a key concern during questioning at Thursday’s hearing and asked O’Malley about how he would address the issue. Several committee members cited a joint investigation by KFF Health News and Cox Media Group television stations, which reported the scope of the overpayment problem; how retirees, disabled, and low-income beneficiaries are affected; And the wide range of issues that can lead to overpayments.
“It’s been heartbreaking to read some of these stories,” O’Malley said, of people who face government collection efforts “through no fault of their own” and “without consideration for their circumstances.”
“I am deeply concerned about the Social Security Administration putting pressure on individuals to recover money the agency has paid out because of its own errors,” Sen. Maggie Hassan (DN.H.) told O’Malley. “We have constituents who are always reaching out to share that they are struggling to make ends meet because SSA has unexpectedly and dramatically reduced their benefits.”
Beneficiaries regularly receive repayment demands long after the money has been spent.
Many of the overpayments are the result of beneficiaries’ failure to comply with federal requirements. But others are the result of Social Security administration errors. Complicated, rigidly followed rules contribute to the problem. And beneficiaries often struggle to answer overpayment notices because they have trouble reaching Social Security workers on the phone.
“We have to fix it,” said Sen. Bob Casey (D-Pa.), who raised the issue during the hearing
O’Malley added that Social Security’s attempt to overpay as a result of Covid relief payments was “an outrage” and he promised to rectify it.
Agencies often overpay people for months or years before they catch the mistake. By then the payout can balloon into thousands of dollars. To recover alleged overpayments, the Social Security Administration often reduces or suspends beneficiaries’ monthly benefits.
“We need to do a better job of recognizing the justice at stake in each of these individual cases,” O’Malley said.
Finance Committee Chair Ron Wyden (D-Ore.) said of a severely disabled person who is unable to work, lives with his parents and pays them half of his benefits from the Supplemental Security Income (SSI) program each month as rent. The consumer was recently notified that she owed more than $9,000 to the government, Wyden said, because she still received rent subsidies from her parents.
Wyden said he and other senators have proposed legislation to “simplify the program and reduce these overpayments.”
Under questioning by Sen. Sherrod Brown (D-Ohio), O’Malley agreed that the limit on the amount of assets beneficiaries are allowed to retain is the main reason for the overpayment. The limits, which have not been raised for inflation since the 1980s, stand at $2,000 for individuals and $3,000 for couples.
“It’s a major factor and it’s a huge administrative burden,” O’Malley said.
Legislation proposed by Brown and others to raise the asset limit “would not only be the right thing to do for recipients, but the right policy,” O’Malley said, “but would also reduce the huge administrative burden that Social Security has to go through.”
Samantha Manning of CMG’s Washington News Bureau contributed to this report.
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