Friday, March 27, 2009

Medicare vs Social Security: The Untold Story

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As noted recently, the unlikely (but unfortunately true) story of how opting out of Medicare can adversely affect one's Social Security payments is heating up (for background, click here and here). Briefly, a group of fellow citizens has filed suit against the Fed's because Social Security officials claim that folks must forfeit their Social Security benefits if they withdraw from (or choose not to enroll in) Medicare. This seemed like a fairly important story, yet seems to have flown completely under the MSM radar.
Which is where we come in:
I had a very helpful conversation the other day with lead attorney Kent Brown. Mr Brown's been practicing law for some 35 years, focusing primarily on fighting government meddling in the health care industry. Not coincidentally, he was also the lead attorney in the case to force open then-First Lady Hillary Clinton's closed-door health care task force.
I asked Mr Brown how he came to be associated with this case, and he told me that he was initially contacted by Brian Hall, a gentleman who chose to opt out of Medicare coverage once he became eligible. Mr Hall was told that he could, of course, choose to do so, but at the cost of his Social Security benefits. This didn't seem fair, and so he approached Mr Brown to see if there was any legal recourse. The case has snowballed, and there are now five plaintiffs (including Former House Majority Leader Dick Armey).
Why, though, would someone choose to forgo health coverage for which one has already paid? Opting out of Medicare may be legal, but is it smart? Mr Brown explained that there are many reasons why someone might choose to decline it, including the desire to make one's own health care decisions without government intervention. Folks see what's happening in England, for example, and want no part of that.
Basically, it comes down to choices: some (many?) folks want no part of a system that allows the government to dictate their health care alternatives. Then, too, there's the matter of privacy, which is also a concern for many of these folks.
So why was the Social Security Administration telling Mr Hall that it was all or nothing? Is there something in the original Medicare legislation that dictated this? Surprisingly, the answer is no. Social Security states that one who is 62 years old and otherwise eligible "shall be entitled to" Medicare [ed: this was obviously added after the initial legislation, which of course predates Medicare]. Nothing in the Social Security or Medicare statutes state that one must take Medicare in order to receive Social Security payments (or vice versa). There are explicit conditions set forth under which one might lose Social Security benefits, but lack of a Medicare card isn't among them.
So how did this come about? Well, according to Mr Brown, there are three provisions in the Social Security Program operating manual that bear on this subject; it's important to note, though, that these are not laws or even regulations. This came about not by statute, but by bureaucratic fiat. The first two of these provisions were inserted in August of 1993 [ed: interesting timing, no?], and the last one in 2002.
The case is moving along; the most recent development is the one which caught my eye earlier this week: the government has filed a routine motion to dismiss, and Mr Brown has countered with one for summary judgment. The judge has set a May 22nd date to hear arguments regarding the motion to dismiss; if that motion is quashed, the government will be given time to respond to the motion for summary judgment. That will probably be in late summer.
I had to ask, and so I did: what happens if the judge grants the government's motion to dismiss? Mr Brown quickly replied that they'd go right to the Appeals Court; the plaintiffs are totally committed to this fight. He also noted that the judge is quite well versed in the subject area, and has her own wry sense of humor (and irony). We agreed that a quote from her would be just the thing with which to conclude this post:
"It is passing strange that the Social Security Administration would insist on individuals being forced to enroll in one bankrupt program in order to be in another one that overruns its budget."
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