Group wants to ask SCOTUS: Why can't we opt out of Medicare, keep social security?

By Anthony Brino
07:48 AM

American senior citizens who happen to want opt out of Medicare, and just want Social Security, aren't allowed by the Social Security Administration, and any Social Security received in early retirement has to be paid back.

It's not clear how many retirees  have tried to opt out of the premium-free Medicare Part A,  or how many want to, and it's also not clear legally why people can't. The rule was apprently written in 1993, just before the Social Security Administration (SSA) became an angency independent of the Department of Health and Human Services. 

To some people who have tried to opt out and who have taken the federal government to court, the SSA has pointed to the rule as law, to be found in the “Program Operations Manual System” or POMS, a rulebook for administering Social Security. And federal courts and appeals courts have agreed with the SSA.

A group of seniors, including a board member of the Cato Institute and former Republican Representative Dick Armey, are vying for the U.S. Supreme Court’s ear, hoping the issue will be relevant in the wake of the rejection of the Affordable Care Act’s Medicaid expansion and that the case will be one of the roughly 80 out of some 10,000 the court selects. 

The lawsuit argues that the SSA has no legal justification for denying one entitlement based on the choice to accept another, and moreover that the rule, apparently author-less, was not created using the required administrative rule proposal processes, with public notification and comment periods.

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The lawsuit, filed in federal court during the Bush Administration, is known as Hall v. Sebelius, after plaintiff Brian Hall, who didn’t want to change his insurance when he turned 65, saying he liked his plan and that he didn’t want the federal government or government contractors viewing his health records. A retired employee of the U.S. Department of Housing and Urban Development, Hall had a high-deductible health insurance plan that included a Health Savings Account. The SSA told him in 2008 that he’d be automatically enrolled in Medicare Part A when he turned 65. When he asked if he could opt out, he was told he'd have to forfeit his Social Security benefits and have to pay back what he received since 2006.

In court testimony, Hall said he was “determined" not to enroll, "under any circumstances,” fearing he would forced to obtain services "inferior" to what he could obtain privately. "I will further be forced to accept healthcare services provided by Medicare that are now rationed, and will, in the future, be increasingly rationed, because of budget constraints. I further believe that I will be forced to accept the undermining of my maximum privacy in my health care decisions and records.”

The lawsuit was dismissed in 2011 by federal district court judge, Rosemary Collyer, a George W. Bush appointee. “Plaintiffs are trapped in a government program intended for their benefit,” Collyer wrote. “They disagree and wish to escape. The Court can find no loophole or requirement that the Secretary provide such a pathway.”

The D.C. Circuit Court of Appeals upheld that rejection in February, led by judge Brett Kavanaugh, a former George W. Bush aide and appointee. Kavanaugh’s opinion bizarrely misinterpreted the case, the plaintiffs say. Kavanaugh wrote: "This is not your typical lawsuit against the Government. Plaintiffs here have sued because they don’t want government benefits. They seek to disclaim their legal entitlement to Medicare Part A benefits for hospitalization costs...They seek a  legal declaration that Medicare Part A benefits cannot be paid on their behalf – a declaration, in other words, that they are not legally entitled to Medicare Part A benefits.  But the statute simply does not provide any mechanism to achieve that objective."

The statutes don't say anything about linking the two benefits, though, the plaintiffs said. Dissenting appeals court judge Karen LeCraft Henderson, a George H.W. Bush appointee, wrote that Kavanaugh missed the obvious question — whether the coupling of the two programs was legal in the first place. Henderson also called the SSA's Program Operations Manual System "an aggravated assault on the English language."

Small government Republicans have been rankled by the fact that Bush Administration-appointed judges  like Kavanaugh, selected for their anti-activist philsophies, sided with a federal government agency in this case. “A large number of conservative luminaries worked very hard, against determined leftist opposition,” to confirm Kavanaugh on the “hyper-important” D.C. appeals court, the American Spectator wrote. Kavanaugh approved “outrageously expansive assertions of national-government authority,” making Beltway conservatives “regret their efforts.”

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So as the smoke settles from the fight over the individual mandate, what are the odds of the Supreme Court taking the case?

 “We have a better than random chance,” said Richard Epstein, a noted libertarian and law professor at NYU and the University of Chicago, who helped file the SCOTUS petition, with the Fund for Personal Liberity. “We would regard it in some sense as a quote-un-quote moral victory if one justice on the Supreme Court dissented from the denial of cert and gave a reason why.”

Epstein, at 69, has enrolled in Medicare. “Do you think I’m willing to give up the Social Security benefits?...Am I happy about it? Well, I have the standing offer that if the government will forgive me of future payments to both programs, I will forgive all future benefits.”