Seniors who choose to opt out of Medicare and continue to purchase their own private health insurance plans, however, are punished by the federal government for doing so by being forced to forfeit their Social Security benefits, even though they may have paid into the Social Security system for many years.
Medicare and Social Security have been linked together since 1993 when unelected bureaucrats in the Clinton administration wrote a rule that states seniors cannot opt out of Medicare without giving up their Social Security benefits.
In 2008, a group of seniors, who formed an organization called The Fund for Personal Liberty, filed a lawsuit Hall v. Sebelius in which they argued that the applications for Medicare and Social Security are voluntary and independent of each other. These Americans had all contributed to Medicare and Social Security throughout their employment histories, but wished to continue to purchase private health insurance once they reached age 65. They asserted that they should be able to opt out of Medicare government-run healthcare without forfeiting their Social Security benefits, and that forced participation in Medicare violates the right to privacy.
The Fund wrote:
The Medicare Lawsuit challenges the idea that unelected bureaucrats can create policies that act as law. Nowhere in the Medicare and Social Security statutes will you find a provision that a person who wishes to avoid Medicare shall be denied Social Security benefits. That is a penalty of approximately $250,000.
The case proceeded for several years and hit its most alarming obstacle in March of 2011, when U.S. District Judge Rosemary Collyer former general counsel of the National Labor Relations Board who initially had sided with the plaintiffs, suddenly reversed herself, ruling in favor of the Obama administration instead.
In an earlier ruling in the case, Collyer acknowledged that, neither the statute nor the regulation specifies that Plaintiffs must withdraw from Social Security and repay retirement benefits in order to withdraw from Medicare.
In her stunning reversal decision, however, the judge ruled that requiring a mechanism for plaintiffs and others in their situation to dis-enroll would be contrary to congressional intent, which was to provide mandatory benefits under Medicare Part A and for those receiving Social Security Retirement benefits.
Collyer also asserted in her decision that the Obama administration extols the benefits of Medicare Part A and suggests that Plaintiffs would agree they are not truly injured if they were to learn more about Medicare, perhaps through discovery.
Plaintiffs are trapped in a government program intended for their benefit, she continued. They disagree and wish to escape. The Court can find no loophole or requirement that the Secretary provide such a pathway.
Regarding the decision, Kent Masterson Brown, the lead attorney representing the seniors in the case, commented at the time:
Anyone concerned with what will happen when the bureaucrats start writing the thousands of pages of rules that will govern the Patient Protection and Affordable Care Act need only look at what has happened in Hall v. Sebelius. When they do, they will realize nothing will be optional and there will be no fair, affordable or swift manner to obtain recourse or appeal a decision made by the bureaucracy.
After the ruling, which essentially decided that an entitlement program such as Medicare is mandatory, then-Sen. Jim DeMint (R-SC) introduced the Retirement Freedom Act. The bill would have allowed Medicare and Social Security to be disconnected, so that Americans would be free to opt out of government Medicare health insurance, but still retain their Social Security benefits. The bill, nevertheless, died in the Senate.
Meanwhile, the members of the Fund appealed their case to the U.S. Supreme Court. In 2012, the Cato Institute and the American Civil Rights Union (ACRU) joined the case as well and submitted amicus briefs. However, in January of 2013, the Supreme Court denied the appeal, a decision the Fund stated was the easy way out.
The three branches of government all have the ability to reign in bureaucratic overreach, but none have the fortitude to do so, wrote the Fund. When unelected bureaucrats create mandates out of thin air, without any repercussions, we have opened Pandoras Box.