Social Security and Medicare news — second quarter 2020

April 15, 2020

What is happening to Social Security?

Thankfully, there are no changes to the delivery of Social Security payments so people will continue to receive benefits on time using either direct deposit or by mail. If you would like to change your preference to direct deposit, visit

During this pandemic, local Social Security offices are closed but are available by phone. Call the National 800-772-1213 number that has temporary new hours from 8:00 AM to 5:30 PM (was 7:00 AM to 7:00 PM) or call the local field office number that can be found at the Field Office Locator by entering your zip code. Information can also be found online at When calling the office, people should be patient because the agency is experiencing longer than normal wait times.

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act was recently enacted and will be sending economic stimulus payments to eligible people. This payment is from the Department of the Treasury so you can visit if you have questions.

As the situation changes daily, Mercer has created a new website, Stay Informed on Coronavirus, to give you access to our latest thinking with articles, legislative updates, pulse surveys, and webcasts developed by our team of experts.

Do not fall for scammers trying to take advantage of the pandemic by calling to trick you into given them personal information to make sure benefit payments continue or to receive the economic stimulus payment. The Social Security Administration typically mails inquiries about these benefits. No government agency will call you for unsolicited information or require any type of payment from you. If you need more information including how to report a scam, please visit the Treasury’s website at

Is the future of Social Security affected by the coronavirus?

Social Security provides the base of financial protection for workers and their families when earnings are lost due to retirement, disability, or death. Currently, Social Security is paying all benefits. Social Security and Medicare receive funds from two separate payroll taxes that are added together (7.65%) that are withheld from employees’ wages and are matched by the employer:

  • Social Security: 6.2% tax pays for benefits to entitled beneficiaries.
  • Medicare (Hospital Insurance): 1.45% tax pays for hospital benefits for Medicare beneficiaries. An additional 0.9% tax applies to high-income employees but is not paid by employers.

Social Security is financed primarily by these payroll taxes (88% of the revenue). A major reason for Social Security’s long-term financial problems is the decline in the number of workers for each beneficiary. There were 2.8 covered workers for each beneficiary. Due to the coronavirus causing extremely high unemployment, there are fewer current workers paying taxes into the program. With less tax revenue coming into the program, the Social Security program will be paying benefits with more of the Trust Fund reserves that were predicted to last until 2035. Congress has always taken action to fix the shortfall and the changes could include lower costs and ways to increase revenue. Options could include:

Lower costs:

  1. Increase the full retirement age (currently set to reach age 67 in 2027)
  2. Lower benefits for high earners
  3. Change the formula used to calculate benefits to reduce the amounts
  4. Change the calculation for the annual cost-of-living adjustment (COLA)

Increase revenue:

  1. Raise the payroll tax paid by employees and employers
  2. Raise the tax paid by high earners
  3. Gradually eliminate the cap on taxable earnings (currently $137,700)

The current crisis will have a future impact on many aspects of our lives and will likely include an impact on the future Social Security benefits paid during retirement.

What does Medicare cover for the coronavirus?

Older adults and people with severe chronic medical conditions are at a higher risk for getting the coronavirus. This includes many receiving Medicare benefits. For older people that are covered by Medicare, Part B (Medical Insurance) covers the lab test to check for the coronavirus. The test is covered when a doctor or other health care provider orders it. There is no cost for this test. For people who test positive for the coronavirus, Medicare will cover all medically necessary hospitalizations.

There is no vaccine at this time for the coronavirus. Once a vaccine does become available, it will be covered by all Medicare Prescription Drug Plans (Part D). Even if you are covered by a Medicare Advantage Plan, the coronavirus tests are covered. Medicare allows these plans to waive the costs for lab tests.

Due to the coronavirus, Medicare has temporarily expanded coverage of telehealth services. This allows beneficiaries covered by Original Medicare to use remote communications tools to conduct common office visits and other services without a copayment. This expanded coverage helps older adults visit with doctors without risking exposure to the coronavirus.

Be aware that scammers are trying to take advantage of people during this pandemic. Protect your Medicare card information, check your claims summary for errors, and if anyone calls you about your benefits, hang up! Do not answer questions from anyone that calls you.

Stay informed and stay safe.

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