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Medicare Mandate Suit Survives Summary Judgment Motion

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A federal court judge is letting plaintiffs who want to collect Social Security benefits without enrolling in Medicare Part A proceed with a suit against the U.S. Department of Health and Human Services secretary.

Judge Rosemary Collyer of the U.S. District Court in Washington has issued an opinion denying a motion to dismiss filed by HHS Secretary Kathleen Sebelius and Michael Asture, commissioner of the Social Security Administration.

The ruling means that the court can continue with consideration of the plaintiffs’ arguments in Hall vs. Sebelius, according to the Fund for Personal Liberty, Freeland, Wash., a libertarian group that is helping the plaintiffs in the case.

HHS says in the Social Security Program Operations Manual that it believes people have to enroll in Medicare to get Social Security retirement benefits.

The Fund for Personal Liberty has recruited Kent Masterson Brown, a Lexington, Ky., lawyer, to represent 5 plaintiffs in an effort to overturn the HHS interpretation given in the operations manual.

The plaintiffs include former House Majority Leader Richard Armey, a Republican from Texas.

The plaintiffs claim that the operations manual Medicare mandate rules violate a statute that makes enrollment in Medicare and Social Security voluntary. All of the plaintiffs say they want to stay out of Medicare because they believe it is an inferior system and have concerns about its finances, and 3 of the plaintiffs would be eligible for other, better health benefits programs if they did not have to sign up for Medicare, the Fund for Personal Liberty says.

The other plaintiffs had private health insurance and health savings arrangements that would have been disrupted had they applied for their Social Security retirement benefits, the fund says.

HHS and SSA officials say the operations manual expresses the intent of the federal statutes that created the Social Security and Medicare programs.

Collyer ruled that statutes and regulations do not appear to require the plaintiffs to pay Social Security benefits back to the SSA to get out of Medicare.

The Social Security operations manual explicitly states that condition, and it is subject to judicial review, Collyer writes in her opinion.

Masterson notes that 2 of the plaintiffs tried to get the SSA to rule on their efforts to get out of Medicare through administrative proceedings but were unable to get the SSA to conduct formal administrative reviews of their requests.

Normally, the courts require plaintiffs go “exhaust administrative remedies” before going to court, but failure to do so can be excused “where plaintiffs can demonstrate exhaustion would be futile,” Collyer writes.

In Hall, exhaustion of remedies appears to be futile and will be excused, Collyer writes.


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