Senior Citizens Press Demand to Opt Out of Medicare, Retain Social Security Benefit

Published January 1, 2009

A bill before the U.S. House of Representatives and a lawsuit in federal district court both aim to overturn a government policy preventing payment of Social Security benefits to senior citizens who do not enroll in Medicare.

House Resolution 7148, the Medicare Beneficiary Freedom to Choose Act, was introduced by Rep. Sam Johnson (R-TX). HR 7148 would allow seniors to opt out of Medicare and still receive Social Security benefits.

In October, three plaintiffs filed a civil action seeking declaratory judgment and an injunction, requesting the Washington, DC district court declare the policy invalid and prevent the secretary of the U.S. Department of Health and Human Services and the commissioner of Social Security from enforcing it.

Peter Ashkenaz, spokesman for the Center for Medicare and Medicaid Services (CMS), confirmed that enrollment in Medicare Part A, which covers hospital and nursing home care, is required in order to receive Social Security benefits. He said the policy has been in place since 1973.

“As far as the rationale [behind the policy], that’s what’s under discussion in the lawsuit,” Ashkenaz said. Both HHS and the Social Security bureau declined further comment because the issue is under litigation.

Serious Medicare Problems

Experts pointed to the policy that led to the parallel lawsuit and legislative effort as an example of serious problems with Medicare.

“Medicare is a very clumsy and poorly designed program,” said Greg Scandlen, director of Consumers for Health Care Choices at The Heartland Institute. “A lot of people have a health insurance program they like, that they’re happy with, that they would like to continue with after they’re 65. Medicare will not allow them to do that. [Withholding their Social Security] is just a way of forcing everyone to stay in Medicare even if they don’t want to be.”

Equality of Poor Service

Norm Rogers of Illinois, one of the plaintiffs in the lawsuit, said the issue of forced Medicare enrollment hit home with him.

“It was really personal,” Rogers said. “Since I saw my parents die on Medicare, I decided I didn’t want to be a member. It’s not a good medical system. I don’t want to be in this system, yet I spent my whole working life paying taxes into Social Security, and I want to get that pension.”

Rogers said he watched doctors go to his parents’ nursing home for non-emergencies only if they could visit several patients at the same time, because the pay was not sufficient to make individual cases worth their while. He said he wants better health care, which he can afford, but if he enrolls in Medicare he will not be allowed to offer doctors any additional pay.

“They try to give everyone everything for free, and the cost runs out of sight,” Rogers said. “They try to make up for it by squeezing the doctors. If you could pay the doctors more, the patients who could pay the doctors more would get better care.

“The logic of government-run medical care is that everyone has to be treated the same,” Rogers said. “The result is the system is overused, the doctors are run ragged, and you get into a situation where you need an operation and they say, ‘We’ll get to you in six months.'”

Not in Statutes

Kent Masterson Brown, the plaintiffs’ lawyer, said the policies were never properly promulgated.

“They were just stuffed in the Social Security Administration operations manual,” Brown said. Nothing in the statutes creating the Medicare program suggested it was anything but voluntary, he said, and no law allows the federal government to sanction or discipline someone for opting out.

Because the policies directly affect people’s interests, they should have been promulgated in the same way as other regulations, said Brown. Since they weren’t, they should be voided, he said.

Chance for Change

Like the lawsuit, HR 7148 would allow seniors to opt out of Medicare Part A and still collect Social Security benefits. The bill also would allow seniors enrolled in Medicare to select their own doctor and to contribute to a health savings account.

“If Warren Buffett wants to pay for his own medical care, I say we should let him,” Johnson said in a press release announcing the bill.

Scandlen said the bill doesn’t stand much of a chance of passing, but the lawsuit has the potential to make a significant change. “I think it’s terrific,” he said. “Essentially, [this policy] was done by regulation without sufficient hearing and without sufficient notice, and is therefore illegal. That strikes me as a pretty compelling argument.”

The Medicare Beneficiary Freedom to Choose Act was in the House Committee on Ways and Means at press time. Rogers’ lawsuit is expected to be heard in court in early 2009.

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

For more information …

House Resolution 7148 (Medicare Beneficiary Freedom to Choose Act):