Bill Would Let Retirees Forgo Medicare

Published May 1, 2009

A Tennessee Congresswoman has offered legislation to allow retirees the option of forgoing enrollment in Medicare without losing their Social Security benefits, which federal law currently prevents them from doing.

House Resolution 1118, the Health Care Choices for Seniors Act, was introduced by Rep. Marsha Blackburn (R-TN) on February 27.

“When you turn 65, you have to enroll in Medicare,” said Blackburn in a speech announcing the bill at the Tennessee Association of Surgical Technologists Convention on February 27. “You are given no real choice about it.

“The penalty of opting out [of Medicare] is severe,” Blackburn continued, “because you are also forced to opt out of all Social Security benefits.”

“Think about that for a moment,” Blackburn said. “Unless you accept government-run health care, you have to forfeit a federal benefit you have paid into for your entire life. For a healthy 65-year-old with a robust HSA, this is a galling prospect.”

Benefits Retirees, Taxpayers

HR 1118 allows seniors to take advantage of more-efficient private health plans without forgoing Social Security, while also allowing the federal government to reduce its Medicare liability.

“The Health Care Choices for Seniors Act would give consumers an alternative to the flawed Medicare system, and would give the financially burdened program a break,” said Greg Scandlen, director of Consumers for Health Care Choices at The Heartland Institute. “Almost any private insurance company is preferable to Medicare, which pins seniors down with many out-of-pocket costs, including the obligation to pay 20 percent of physicians’ services costs with no limits.

“Many people don’t care for Medicare,” Scandlen said, noting Medicare is so inefficient “many senior citizens must buy a supplemental policy to get decent coverage.”

‘Government Should Be Delighted’

“Opting out of Medicare is very dangerous unless you’re a billionaire, because you don’t know what your health care benefits are going to look like in the future, and it might be much more expensive than the amount of money in your health savings account,” countered Maggie Nahar, health care fellow at the Century Foundation.

Scandlen disagreed with the notion that the Medicare program is a more secure health insurance option, noting, “Medicare is facing $34 trillion in unfunded liabilities.”

“The government should be delighted if people voluntarily decide to go with other coverages and reduce Medicare’s spending,” Scandlen said. “All this bill does, though, is provide people with the option to do so. Opposing consumer choice in favor of government control shows a distrust of individuals, and a faith in government, that has been shown time and again to be misplaced.”

Second Try

The Health Care Choices for Seniors Act follows an effort last year by Rep. Sam Johnson (R-TX), whose Medicare Beneficiary Freedom to Choose Act (HR 7148), which also sought to sever the tie between Medicare and Social Security, never made it out of committee.

Scandlen said while he does not expect the Health Care Choices for Seniors Act to pass in the Democrat-dominated Congress, it paves the way for future legislation.

“It certainly sets a marker for what should be done. After the elections of 2010, I expect we’ll have a new Congress, and it may pass then,” Scandlen said. “In the meantime, this effort may galvanize support for more consumer control over their own health care.”

Jillian Melchior ([email protected]) writes from Michigan.

For more information …

HR 1118, Health Care Choices for Seniors Act: