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<p align="center"><strong>Testimony by Jim Borland, <br>Acting Deputy Commissioner for Communications, Social Security Administration<br>
Special Committee on Aging</strong></p>
<p align="center"><strong> January 24, 2018</strong></p>
<p>Chairman Collins, Ranking Member Casey, and Members of the Special Committee:</p>
<p>I am Jim Borland, Acting Deputy Commissioner for Communications at the Social
Security Administration (SSA). Thank you for inviting me to discuss how SSA provides
information to help workers and their family members decide when to claim Social
Security retirement benefits, and when to enroll in Medicare. These decisions are
important, and we are mindful of our responsibility to provide information to help our
claimants make informed decisions that best fit their individual circumstances.</p>
<p> <u><strong>Overview</strong></u><strong></strong></p>
<p> We administer the Old-Age, Survivors, and Disability Insurance (OASDI) program,
commonly referred to as “Social Security.” Individuals earn coverage for Social Security
retirement, survivors, and disability benefits by working and paying Social Security taxes
on their earnings. Payroll tax revenues fund the Social Security program. We also
administer the Supplemental Security Income (SSI) program, which provides monthly
payments to people with limited income and resources who are aged, blind, or disabled.
Adults and children under age 18 can receive payments based on disability or blindness.
General tax revenues fund the SSI program.</p>
<p> Few government agencies touch the lives of as many people as we do. Social Security
pays monthly OASDI benefits to approximately 62 million individuals. During fiscal
year (FY) 2017, we paid about $934 billion to Social Security beneficiaries. This
included about:</p>
<ul>
<li> $793 billion to an average of about 51 million retired workers, the spouses and
children of retired workers, and the survivors of deceased workers a month; and</li><br>
<li> $141 billion to an average of more than 10 million disabled beneficiaries and their
spouses and children a month.<strong>1</strong></li>
</ul>
<p> Medicare is a national health insurance program administered by the Centers for
Medicare and Medicaid Services (CMS). It provides health insurance for people age 65
and older, younger disabled workers, and individuals with end stage renal disease. SSA
is responsible for enrolling people in Medicare. In FY 2017, we enrolled over five
million people in Medicare.</p>
<p> <u><strong>Helping Individuals Understand Social Security Retirement and Medicare</strong></u><strong></strong></p>
<p> Before individuals apply for and receive Social Security benefits, SSA has an important
role to provide objective and clear information that individuals may use to plan for
retirement and make informed decisions appropriate for their circumstances. We have a
variety of ways to inform individuals about their claiming options before they decide to
file for Social Security benefits or enroll in Medicare. These resources are critical because they allow individuals to consider the best age for them to start benefits based on
their health, finances, and other personal circumstances. We provide this information
using a variety of methods, including the Social Security <em>Statement</em>, our website and
publications, outreach, and more.</p>
<p> <em><strong>Social Security Statement</strong></em></p>
<p> The <em>Social Security Statement (Statement)</em> provides information on lifetime earnings as
well as estimates of future benefits workers and their families may receive based on those
earnings. Individuals may access their <em>Statement</em> at any time through a personal online <span class="red"><em>my</em></span> <span class="blue">Social
Security</span> account. They also receive an annual reminder to check the most
recent version of their <em>Statements</em>. Additionally, we currently mail <em>Statements</em> to
individuals aged 60 and older who are not receiving Social Security benefits and do not
have a <span class="red"><em>my</em></span> <span class="blue">Social
Security</span> account.<strong>2</strong> In FY 2017, 15.6 million <span class="red"><em>my</em></span> <span class="blue">Social
Security</span> users accessed their <em>Statements</em> nearly 46 million times, and we mailed around 13.5
million <em>Statements</em>.</p>
<p> The <em>Statement</em> provides personalized information about an individual’s potential
retirement benefits, as well as a detailed record of the individual’s earnings history.
Individuals may use the <em>Statement</em> to verify their earnings history and to inform us if their
earnings need to be corrected. For retirement benefits, the <em>Statement</em> lists the benefit
amounts that an individual is estimated to receive at age 62, at full retirement age (FRA),
and at age 70. The <em>Statement</em> describes additional factors an individual should consider
before deciding when to apply for benefits. It includes information on how work affects
benefits; how a worker’s claiming decision affects survivors benefits; how to avoid a
Medicare late-enrollment penalty; and information on average life expectancy. Since we
launched <span class="red"><em>my</em></span> <span class="blue">Social
Security</span> accounts in 2012, more than 34 million users have
registered and more workers are signing up every day. In addition, <span class="red"><em>my</em></span> <span class="blue">Social
Security</span> accounts consistently rank among the top 10 in customer satisfaction for all Federal
government websites.</p>
<p> Over the next few years, we plan to enhance the online <em>Statement </em>to attract more workers
to sign-up, review their personal information, and conduct business with us online. </p>
<p><em><strong>Publications and Online Tools</strong></em></p>
<p> We offer a wealth of other information to the public through our publications, website,
and other online tools. More than 99 million people visited our website a total of more
than 232 million times in calendar year 2017. Numerous publications, webpages, and
<a href="http://faq.ssa.gov/" target="_blank">Frequently Asked Questions</a> explain the effect that earnings, the age at which benefits are
claimed, and the receipt of a non-covered pension may have on Social Security benefits.<strong>3</strong> Our resources range from providing basic information about benefits, to delving into the
details of benefit calculations, factors to consider when filing for benefits, and more.</p>
<p>We offer a variety of online calculators. One of these, the Retirement Estimator, allows
an individual to input a few pieces of personal information and receive an estimate of
benefits that would be payable if he or she were to claim benefits at age 62, at FRA, at
age 70, or at any age in between based upon his or her actual earnings information.<strong>4</strong> Based on surveys conducted by Foresee, the Retirement Estimator is one of the highest
rated government sites in customer satisfaction. The Retirement Estimator lets
individuals enter different future earnings information and expected stop work dates, to
help decide the best time to retire. We also offer a <a href="https://www.ssa.gov/OACT/population/longevity.html" target="_blank">Life Expectancy Calculator</a> to aid
people with their retirement planning. This calculator allows an individual to see average
life expectancy based on individuals with his or her gender and date of birth.<strong>5</strong> </p>
<p>We also offer substantial information when an individual completes the online
application for retirement benefits. Throughout the online retirement application, we
provide links that explain why we ask for particular information, and the importance of
that information based on an individual’s circumstances. For example, within the online
application, when an individual indicates the date they want to start receiving benefits,
we inform them that if benefits begin before FRA, their monthly benefits will be
permanently reduced. We also provide links to detailed information explaining the
effects of receiving benefits before and after FRA. Additionally, we provide a link to the
Retirement Estimator, mentioned earlier, that allows claimants to see what their benefit
amount would be at various ages. This level of information is important because the
majority of retirement claims are filed online (in 2017, about 53 percent of retirement
applications were filed online).</p>
<p> <em><strong>Medicare Information</strong></em></p>
<p> CMS administers the Medicare program, but individuals enroll in Medicare by contacting
SSA. Thus, SSA and CMS work in partnership and both agencies maintain and
communicate information about how to enroll, what the enrollment options are, and who
to contact for more information about enrollment. For example, our publication <a href="https://www.ssa.gov/pubs/EN-05-10531.pdf" target="_blank"><em>How to
Apply Online for Medicare Only</em></a> explains how an individual who is not ready to apply for
Social Security benefits but does want to enroll in Medicare can do so quickly and
efficiently.<strong>6</strong></p>
<p> Our publication entitled <a href="https://www.ssa.gov/pubs/EN-05-10529.pdf" target="_blank"><em>Retirement Information for Medicare Beneficiaries</em></a> provides
information that can help an individual who has already enrolled in Medicare decide
when to apply for Social Security retirement benefits.<strong>7</strong></p>
<p> Our website includes helpful information about Medicare, including information about
enrolling in Medicare at 65 and delaying retirement benefits until after FRA. Our website also links to the CMS flagship publication, <a href="https://www.medicare.gov/medicare-and-you/different-formats/m-and-y-different-formats.html" target="_blank"><em>Medicare and You</em></a>, giving the public
instant access to a wealth of information.<strong>8</strong></p>
<p> <strong><em>Direct Service to Customers</em></strong><em></em></p>
<p> Our employees are dedicated to providing customers with the information they need to
make a well-informed decision about claiming Social Security benefits and enrolling in
Medicare. They assist the public in a variety of ways, such as through face-to-face
interaction in a field office, by telephone (including our national toll-free number, 1-800-
772-1213), in response to online applications, and by mail.</p>
<p> Employees inform individuals of the benefits for which they and their family members
may be eligible; provide monthly benefits amounts at early, full, and delayed retirement
ages; and discuss other information the claimant may need to know about Social Security
rules, requirements, and benefits. Employees also inform individuals about the Medicare
program including information about premiums, deductibles, enrollment periods, the
month coverage begins, penalties for declining Medicare Part B when first eligible, as
well as the prescription drug plan (Medicare Part D), and where to find help with
covering prescription drug costs.</p>
<p> SSA employees provide detailed information about the Social Security and Medicare
programs, and how the rules apply to each individual’s situation. However, they do not
attempt to persuade individuals regarding whether or when to file for benefits. This is
because our employees are not in a position to know about or discuss the personal
circumstances––such as financial resources, tax situation, health, and family longevity––
that may be important in deciding which age is best for that person to claim benefits.</p>
<p> <em><strong>Outreach</strong></em></p>
<p> Public outreach is an essential part of our strategy to educate more Americans on the
retirement benefit options. We provide the public with critical information about our
programs, benefits, and services. To this end, our field and regional offices are
committed to connecting with the public at the local, grass-roots level.</p>
<p> During fiscal year 2017, Social Security employees participated in more than 6,000
events to help the American people better understand Social Security and Medicare
benefits. With an estimated audience of more than 3.7 million people, these events
ranged from small rural get-togethers in public libraries, senior centers, churches, and
veterans’ organizations to large gatherings like county and state fairs, senior expos, and
employer group meetings. Whether the attendance is in the tens or the thousands, SSA
employees are there to help Americans better understand their benefits.</p>
<p> Among those events, pre-retirement seminars are particularly effective forums to discuss
options for claiming Social Security and Medicare. Since 2004, we have helped the National Rural Electric Cooperative Association identify speakers for more than 400 such
seminars throughout America’s heartland.</p>
<p> Examples from our regions further illustrate our efforts to ensure rural and remote
populations have equal access to Social Security and Medicare information: </p>
<blockquote>
<p>Our Seattle Region is experimenting with existing technologies to conduct
seminars in the remote and underserved communities in the State of
Alaska. In our Philadelphia Region, we have worked closely with the
Pennsylvania Department of Labor and Industry to ensure that remote
counties like Erie, Crawford, and Franklin are served. Our preretirement
seminars in these counties help residents understand their many Social
Security options. Our Boston Region has worked with Maine’s Area
Agencies on Aging as well as the five federally recognized American
Indian Tribes located in extremely remote areas of the state.</p>
</blockquote>
<p> In addition to our work in the regions, we also work closely with national organizations,
advocacy groups, and other Federal agencies to maximize the reach of our public
education and communication efforts.</p>
<p> We continue to strengthen our partnership with CMS to improve our outreach for
Americans nearing the Medicare eligibility age. Recently, we have:</p>
<ul>
<li> Updated the <em>Statement</em> insert for older individuals to strengthen the message about
when to apply for Medicare and to make the information more prominent;</li><br>
<li> Included additional language or made existing language about the late enrollment
penalty and Medicare clearer in several publications;</li><br>
<li> Added additional frequently asked questions to address late enrollment fees, and
signing up for Medicare when health insurance through current employment or
when VA benefits are involved; and</li><br>
<li> Coordinated communications with Medicare beneficiaries about the issuance of
new Medicare cards in 2018, including an alert to beware of scams targeting the
elderly and disabled.</li>
</ul>
<p> <u><strong>Choosing When to Claim Retirement Benefits</strong></u><strong></strong></p>
<p> Choosing when to start receiving Social Security retirement benefits is an important
decision that affects the amount that individuals receive for the rest of their lives.
Workers can claim full (unreduced) retirement benefits at FRA – currently age 66 and 4 months for people who turn 62 in 2018.9 Social Security also allows individuals to claim
benefits as early as age 62 or to allow their benefit amount to grow up to age 70.<strong>10</strong></p>
<p> Receiving Social Security benefits before FRA permanently reduces an individual’s
monthly retirement benefit – and the earlier benefits begin, the greater the reduction.<strong>11</strong> In
2018, retirement benefits claimed at age 62 result in a reduction of up to 26.7 percent,
compared to the benefit payable at FRA(66 and 4 months).<strong>12</strong></p>
<p> On the other hand, individuals who delay claiming beyond FRA earn “delayed retirement
credits” (DRCs) for every month they do not receive benefits after attaining FRA and
prior to attaining age 70. For those born in 1943 and later, each month of delay increases
the retirement benefit by two-thirds of one percent, or eight percent per year. For a
person whose FRA is 66, delaying until 70 would result in a monthly benefit 32 percent
higher than the amount that would be payable if claimed at FRA.</p>
<p> For example, consider an individual eligible for a $1,000 monthly benefit who was born
between 1943 and 1954. He or she would have an FRA of 66. As shown in the
following chart, if he or she took benefits at age 62, the monthly amount would be
permanently reduced by 25 percent to $750. On the other hand, if he or she delayed
benefits until age 70, the monthly amount would be permanently increased by 32 percent
(eight percent per year from age 66 to 70) to $1,320. Overall, delaying the start of
benefits from age 62 to 70 would increase the monthly benefit by 76 percent (from $750
to $1,320), or almost $7,000 a year.</p>
<p align="center"><img src="testimony_012418a.jpg" width="563" height="458" alt="Age and Monthly Benefit Amount Chart"></p>
<p>Retirement claiming decisions can also affect the amount of the benefit that the worker’s
spouse will receive if he or she outlives the worker. In effect, the same adjustment that
applies to the worker’s retirement benefit will apply to survivor benefits paid to the
worker’s widow or widower for the rest of his or her life.</p>
<p> Deciding when to claim retirement benefits can be complex, and a person should consider
many factors when making his or her decision. In addition to the monthly benefit
amount, individuals should consider their personal and family circumstances, including
current and future financial resources and obligations, and anticipated health and
longevity.</p>
<p> Married couples have two lives to plan for throughout retirement. Married retirees must
consider important information about Social Security protection for widowed spouses. A
higher-earning partner who delays benefits will receive higher monthly benefits for his or
her life. This delay may also result in higher survivor’s benefits for a spouse if the
spouse lives longer.</p>
<p><strong><u>Enrolling in Medicare</u></strong></p>
<p> We strive to make it as easy as possible for people to get information about how to enroll
in Medicare and to complete the enrollment process. It is important that people know
their enrollment options in order to avoid delays in the effective date of coverage or
increases in their premiums. One of our goals is to help people who are approaching age
65 know that, even though full retirement age is increasing, Medicare eligibility still
begins (in most cases) at age 65. Accordingly, for people who are age 55 or older, we
include with the Statement a document titled “Thinking of retiring?”, which features a
prominent message advising the person to sign up for Medicare at age 65 even if he or
she does not plan to receive monthly Social Security benefits at that time.</p>
<p> Current Social Security retirement beneficiaries receive an enrollment package from
CMS about 3 months before they turn 65. It tells them that they will be enrolled in Part
A. It also tells them they will be automatically enrolled in Part B unless they inform us
they do not want the coverage (except in Puerto Rico where, by law, residents must optin
if they want Part B coverage). Disability beneficiaries who have been receiving
benefits for 24 months are also automatically enrolled in Medicare and receive the same
enrollment package.</p>
<p> Individuals who are not receiving Social Security benefits must take action to enroll in
Medicare. They can do so in person, by phone, or online during one of the following
enrollment periods:</p>
<ul>
<li> Initial Enrollment Period - the month the individual turns 65, the three months
before, and the three months after;</li><br>
<li> General Enrollment Period - January 1 to March 31 of every year; or</li><br>
<li> Special Enrollment Period - Individuals who continue to work past age 65 or who
have a spouse that works and who have employment-based health insurance may
have a special enrollment period (SEP). The SEP allows the individual to file
during the eight-month period that begins after the employment-based health
insurance ends, without having to pay a penalty in the form of increased
premiums.</li></ul>
<p><br>
Many individuals can enroll in Medicare online, even if they do not want to claim their
Social Security benefits. Individuals can use our online Medicare application if they:</p>
<ul>
<li> are at least 64 years and 9 months old;</li><br>
<li> want to sign up for Medicare but do not currently have any Medicare coverage; </li><br>
<li> do not want to start receiving Social Security benefits; and</li><br>
<li>are not currently receiving Social Security retirement, disability or survivors
benefits.
</p>
</li>
</ul>
<p><u><strong>Conclusion</strong></u><strong></strong></p>
<p> When Congress passed the Social Security Act in 1935, it did so to provide seniors with
benefits based on their earnings to sustain them throughout their retirement. This
continues to be one of the program’s core purposes. Currently, program rules allow
individuals to claim their retirement benefits and receive different monthly benefit
amounts at any time between the ages of 62 and 70, offering individuals flexibility to
make decisions based on their individual circumstances. Accordingly, we understand the
importance of providing useful information to the public about their choices for
retirement. Through interaction with agency employees, the <em>Statement</em>, <span class="red"><em>my</em></span> <span class="blue">Social
Security</span> accounts, other online tools, our publications, and our outreach efforts, we
provide valuable ways for individuals to learn about how claiming decisions may affect
their benefits.</p>
<p> Similarly, when Congress passed Medicare in 1965, it charged the Social Security
Administration with the responsibility to enroll people in the program. We take that
responsibility very seriously, and we strive to ensure that we, in partnership with the
Centers for Medicare and Medicaid Services, provide accurate, useful information that
helps ensure people know when and how to contact us to enroll in Medicare, especially
when they are not yet receiving Social Security benefits.</p>
<p> Thank you again for inviting me here today. I would be glad to answer any questions.</p>
<p><strong>______________________________________________</strong></p>
<div>
<div id="ftn6">
<p><strong>1</strong> There were also on average more than 8 million SSI recipients per month in Fiscal Year 2017.</p>
<p><strong>2</strong> Individuals also may request a copy of their Statement at any time.</p>
<p> <strong>3</strong> http://faq.ssa.gov/</p>
<p><strong>4</strong> https://www.ssa.gov/retire/estimator.html</p>
<p> <strong>5</strong> https://www.ssa.gov/OACT/population/longevity.html</p>
<p> <strong>6</strong> https://www.ssa.gov/pubs/EN-05-10531.pdf</p>
<p> <strong>7</strong> https://www.ssa.gov/pubs/EN-05-10529.pdf</p>
<p><strong>8</strong> https://www.medicare.gov/medicare-and-you/different-formats/m-and-y-different-formats.html</p>
<p><strong>9</strong> For persons born in years 1943 through 1954, full retirement age is 66. For people who turn 62 in 2018
(born in 1956), full retirement age is 66 and 4 months, 2 months more than it was for those who turned 62
last year. The retirement age will continue to increase by 2 months every year until it reaches age 67 for
those who were born in 1960 or later.</p>
<p> <strong>10</strong> Workers who are no longer covered under employer-sponsored health insurance and individuals with
employers that have fewer than 20 employees must sign up for Medicare when eligible if they wish to
avoid a penalty in the form of an increased premium for Medicare Part B coverage. Individuals who are
still working or are covered by their or their spouse’s employer’s group health insurance plan, can postpone
signing up for Medicare Part B without penalty until they are no longer covered by the group health
insurance plan based on current employment, at which time they will have an eight-month Special
Enrollment Period in which to sign up. In addition, there is a late enrollment penalty for not signing up for
Medicare Part D during the Initial Enrollment Period. However, the penalty may be waived if an individual
shows proof of creditable drug coverage.</p>
<p> <strong>11</strong> The monthly benefit is reduced by 5/9 of one percent for each month up to 36 months before FRA and
then 5/12 of 1 percent for each additional month before FRA.</p>
<p> <strong>12</strong> For people born in 1960 or later, choosing</p>
<p><strong>13</strong> See SSA Pub. No. 05-10147, “When to Start Receiving Retirement Benefits” (January 2017), available
at <a href="https://www.ssa.gov/pubs/EN-05-10147.pdf">https://www.ssa.gov/pubs/EN-05-10147.pdf</a>.</p>
<p> <strong>14</strong> These monthly benefit amounts do not account for any benefit increase that may be due to earnings after
age 61, nor do they include cost-of-living adjustment (COLA) increases.</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
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