Want to get Social Security but not Medicare? That’s illegal
It is often said in Washington that to change Medicare is to violate the promise made to millions of senior citizens. Last year, five men who wanted to keep their private insurance found out the federal government has made it more than a promise. According to the D.C. Circuit Court of Appeals, if you accept Social Security but not Medicare, you can be required to forfeit future Social Security benefits and pay back benefits already received.
This terrible decision by the Court of Appeals begin in 2009, when a federal district court heard arguments from the five men, all of whom who wanted to avoid automatic enrollment in Medicare but still receive Social Security benefits. The district court ruled they could not. The men subsequently appealed the decision to the Court of Appeals for the District of Columbia Circuit, on February 7, 2012, the Circuit Court agreed with the lower court.
The unusual case was brought by five people who would prefer not to be on Medicare because their private insurer limits hospital coverage for customers who are entitled to the government health program …
The court points out that the plaintiffs can of course decline Medicare benefits and pay out of pocket.
According to the Court, Medicare does not have an opt-out mechanism unless Medicare recipients also choose to forego Social Security benefits – and they have to pay back any previously received Social Security benefits:
The law, the court concluded, does not provide a mechanism for beneficiaries to opt out.
“If you are 65 or older and sign up for Social Security, you are automatically entitled to Medicare Part A benefits,” [Circuit Court Judge Brett] Kavanaugh wrote. “You can decline those benefits. But you still remain entitled to them under the statute.”
Not surprisingly, the plaintiffs appealed the ruling of the Circuit Court, and looked forward to a hearing in the Supreme Court of the United States. But in January of this year, the Supreme Court decided to not hear the case. From Ilya Shapiro in a January 25, 2013 blog post:
Some of the U.S. Supreme Court’s most significant decisions are those declining to hear a case. Two weeks ago, the Court made such a momentous non-ruling in refusing to hear a lawsuit, Hall v. Sebelius, challenging government policies that deny otherwise eligible retirees their Social Security benefits if they choose not to enroll in Medicare….
Despite having paid thousands of dollars each in Social Security and Medicare taxes during their working lives—for which they never sought reimbursement—the five plaintiffs were told by officials at the Social Security Administration and Department of Health and Human Services that they had to forfeit all of their Social Security benefits if they wished to withdraw from (or not enroll in) Medicare. This determination resulted from internal policies that were put in place during the Clinton administration and strengthened by the Bush administration. The plaintiffs sought a judicial ruling that would prohibit SSA and HHS from enforcing these policies, which they believed conflicted with the Social Security and Medicare statutes. A sharply divided U.S Court of Appeals for the D.C. Circuit eventually upheld them. By its decision not to hear the case, the Supreme Court let that controversial ruling stand.
At this point, one might ask why someone would want to give up Medicare. The answer is that some people would prefer to keep their existing (private) health insurance, but that for various regulatory and economic reasons insurance companies are wary of insuring people already covered by Medicare. Talk about the prototypical case of government programs crowding out the private sector!
In any event, the troubling reality of the Supreme Court’s non-ruling is twofold: First, the government now has full authority to force citizens to participate in a financially troubled program (Medicare) that was originally intended to be—and operated for almost three decades as—a wholly voluntary program. If they refuse, SSA and HHS can deny them their Social Security benefits. If they seek to withdraw from Medicare, SSA and HHS can not only deny them future benefits, but force them to repay all benefits received from both programs. Second, the Supreme Court’s unwillingness to address the issue raised here allows federal agencies to bypass Congress with impunity when drafting and implementing their own rules.
Shapiro’s post is worth reading in full, but the Court’s decision to not hear the case is disturbing. Essentially, these five men (and, by extension, all Americans) are being told we must be part of the failing Medicare system whether we want to or not, no matter the consequences to a preferred private health insurance plan. We must participate because the federal government has taxed us involuntarily, and thus it now controls the choices we make once we reach a certain age.
He who pays holds the power to decide and the Federal Government clearly couldn’t agree more.