Personal Finance

The government will fix this Medicare mistake next April

Key Points
  • Social Security numbers must be removed from Medicare cards by April 2019.
  • New cards will come in the mail starting next April.
  • Don't put your number down on routine medical forms.

Would-be thieves will soon have one less avenue to use to snare your Social Security number.

Medicare has been the odd holdout among health insurance companies in using Social Security numbers as the basis for member IDs — and printing those identifiers right on the insurance card. That ends next year.

Under the Medicare Access and CHIP Reauthorization Act of 2015, the agency is required to remove Social Security numbers from all Medicare cards by April 2019. Earlier this year, the Centers for Medicare and Medicaid Services announced plans to begin mailing replacement cards with a new "Medicare Beneficiary Identifier," or MBI, starting in April 2018.

It's a no-brainer: Your Social Security number should never have been used in that way. It was a big mistake.
Beth Givens
executive director, Privacy Rights Clearinghouse

During a transition period from April 1, 2018, until Dec. 31, 2019, providers can use either the new MBIs or current SSN-based numbers.

"Most people know the role that Social Security numbers play in identity theft, so this is a welcome move," said Beth Givens, executive director of Privacy Rights Clearinghouse. The consumer advocacy group often receives calls complaining about the inclusion of their SSN on Medicare cards, she said.

"It's a no-brainer: Your Social Security number should never have been used in that way," Givens said. "It was a big mistake."

Medical identity theft on the rise: Here's how to protect yourself

Some 15.4 million consumers were victims of identity theft or fraud last year, according to a February report from Javelin Strategy & Research. That's up 16 percent from 2015, and the highest figure recorded since the firm began tracking fraud instances in 2004.

Access to a Social Security number gives thieves leeway to perpetuate some of the more damaging kinds of fraud, including filing fake tax returns and opening new lines of credit accounts in the victim's name. Such new-account fraud was up 20 percent last year, Javelin found.

Thieves could even obtain medical care or prescriptions in the victim's name. Half of medical identity theft victims say their information was stolen to obtain government benefits such as Medicare or Medicaid, according to a 2015 report from Ponemon Institute.

A halt to the practice of using a Social Security-based identifier on Medicare cards limits the repercussions of a lost or stolen wallet. It also reduces the number of records where thieves might access that info, said Linda Sherry, director of national priorities for advocacy group Consumer Action.

"People show their [Medicare] card a lot, at doctor's offices and other places," she said. "It's photocopied and kept in office filing cabinets and online."

But consumers will still need to take other steps to safeguard their Social Security number, including pushing back when health-care providers and other companies ask for it as part of new-patient intake forms or applications, she said.

"It can do a lot of damage in the wrong hands," Sherry said. "People need to be brave about it. If people don't start speaking up, companies are going to continue to use this."