Medicare and ID Theft - Watch out!

From the New York Times we get the chilling call of warning about Social Security, Medicare, and ID theft. The Social Security Administration is 100% right!

This is another example of clueless government. Remember drivers licenses with your Social Security number on it? I do and that was a horrible disaster!

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June 22, 2008

Agency Sees Theft Risk for ID Card in Medicare

By ROBERT PEAR, New York Times

WASHINGTON — Social Security officials, concerned about the risk of identity theft, are calling for immediate action to remove Social Security numbers from the Medicare cards used by millions of Americans.

But Medicare officials have resisted the proposal, saying it would be costly and impractical.

In a new report, the inspector general of Social Security, Patrick P. O’Carroll Jr., says “immediate action is needed.”

“Displaying such information on Medicare cards unnecessarily places millions of individuals at risk for identity theft,” Mr. O’Carroll said. “We do not believe a federal agency should place more value on convenience than the security of its beneficiaries’ personal information.”

In a memorandum to the heads of federal departments and agencies in May 2007, Clay Johnson III, deputy director of the White House Office of Management and Budget, said they should draw up plans to “eliminate the unnecessary collection and use of Social Security numbers within 18 months.”

Social Security cannot prohibit the Medicare agency from using Social Security numbers, although Congress could do so. Federal officials say that more than 40 million people who are 65 and older or disabled have Medicare cards with Social Security numbers on them.

Charlene M. Frizzera, chief operating officer of the Centers for Medicare and Medicaid Services, played down the risk of identity theft from the misuse of Medicare cards. If the government suddenly issued new Medicare cards or identification numbers, she said, it could startle or alarm beneficiaries. “We don’t want to scare them,” Ms. Frizzera said.

Most private insurance companies have abandoned the use of Social Security numbers as identifiers because many states forbid it.

Gail K. Hillebrand, a lawyer at Consumers Union, said, “A person holding a private health insurance card now has more privacy protections than a person holding a Medicare card.”

Byron Hollis, director of the antifraud department at the Blue Cross and Blue Shield Association, said, “Medical identity theft is the fastest-growing form of health care fraud.”

To prevent such fraud, Mr. Hollis said, Blue Cross and Blue Shield plans stopped using Social Security numbers on their cards several years ago. The 39 Blue Cross and Blue Shield companies provide coverage for more than 100 million people.

Ms. Frizzera, the Medicare official, said that issuing new Medicare cards would be “a huge undertaking.” The agency would need three years to plan such a move and eight more years to carry it out, she said.

Medicare officials estimate that it would cost $500 million to change their computer systems if they issued new ID numbers to beneficiaries. Doctors, hospitals and other health care providers use those numbers in filing claims with Medicare, which pays a billion claims a year.

A survey by America’s Health Insurance Plans, a trade group, found that at least 31 states had laws prohibiting or restricting the use and display of Social Security numbers.

Many are modeled on a 2001 California law that says companies cannot print a person’s Social Security number on any card needed to obtain goods or services offered by the companies.

In his report, Mr. O’Carroll noted that Social Security numbers were “linked to vast amounts of personal information.”

“Many individuals carry their Medicare cards in their wallets or purses and could become victims of identity theft should dishonest individuals steal such items or lift their Medicare number from a beneficiary card or medical document,” Mr. O’Carroll said.

Other federal agencies are taking steps to remove Social Security numbers from identification cards. The Department of Veterans Affairs said that new identification cards issued to veterans generally did not display Social Security numbers.

Mary M. Dixon, director of the Defense Manpower Data Center, said the Defense Department planned to issue eight million new identification cards in the next few years. New cards will have just the last four digits of Social Security numbers.