Thursday, May 25th, 2017

About the Lawsuit

The Issue

Does the federal government have the right to deny otherwise eligible retirees their Social Security benefits if those retirees choose not to enroll in Medicare even though participation in Medicare, under law (Social Security Amendments of 1965, more commonly known as the Medicare Act, Title 42 of the United States Code, beginning at Section 1395 signed into law by President Lyndon B. Johnson on July 30, 1965), is voluntary (open to any U.S. citizen who meets the eligibility criteria and “files an application” to enroll)?


How We Got Here
In 1993 and 2002, the Social Security Administration (SSA) issued new rules, unchallenged until now, stating, in effect, that any retiree who elects to opt out of Medicare Part A (the Medicare hospital insurance program) will automatically lose his or her Social Security retirement benefits. The rules were promulgated without being published beforehand in the Federal Register and without benefit of public comment.

The plaintiffs in this case believe that the Clinton administration (in 1993) and the Bush administration (in 2002) acted unlawfully – both, substantively, by violating the Social Security Act and the Medicare Act of 1965, and, procedurally, by violating the federal government’s Administrative Procedure Act of 1946 (Title 5 of the United States Code, beginning at Section 500).


Why The Rules Are Illegal
The plaintiffs claim that the rules are illegal because:

  • The Social Security Act and Medicare Act state clearly that applying for Social Security monthly benefits and enrolling in Medicare are voluntary and that the applications for each of these programs are not dependent on the application for the other.   For the new SSA rules to make enrolling in Medicare mandatory violates the Social Security Act and Medicare Act as well as Article I, Section 1 of the Constitution.
  • Forced participation in Medicare infringes on a citizen’s right to privacy and to make necessary choices about his or her own health care, and, accordingly, violates the First, Fourth, Fifth, Ninth, and Fourteenth Amendments to the Constitution.
  • The new SSA rules were put into place without undergoing the required “notice” and “comment” rule-making requirements. The policies should have been published in the Federal Register and open to comment by the general public prior to implementation. Not doing so violates the Administrative Procedure Act.


Why the Plaintiffs Are Bringing This Lawsuit
Lead plaintiff Brian Hall and plaintiffs Richard Armey, John Kraus, Lewis Randall, and Norman Rogers are able to provide for their own health care needs and do not want to apply for or participate in Medicare. In their opinion, the health care services provided under Medicare are:

  • inferior to those they currently obtain privately;
  • effectively rationed because of government budget constraints; and,
  • provided without concern for patients’ privacy.

The plaintiffs additionally believe the rules undermine their individual freedoms and constitutional liberties.  

Furthermore, HHS has provided no means and no applicable administrative procedures by which an individual can request to opt out of Medicare, Part A, leaving the plaintiffs with no other option than pursuing legal action.


Rules and Procedures At Issue
On August 30, 1993, the Social Security Administration added two substantive rules to its “Program Operations Manual” to address the fact that “[S]ome individuals entitled to monthly benefits have asked to waive Hospital Insurance (HI) entitlement because of religious or philosophical reasons, or because they prefer other health insurance.” (These rules, while promulgated by SSA, are enforced by both SSA and HHS.)

The first rule reads:

“Individuals entitled to monthly benefits which confer eligibility for HI may not waive HI entitlement.   The only way to avoid HI Entitlement is through withdrawal of the monthly benefit application.   Withdrawal requires repayment of all Retirement, Survivors, Disability Insurance (RSDI) and HI benefit payments.”

The second rule reads:

“To withdraw from the HI program, an individual must submit a written request for withdrawal and must refund any HI benefits paid on his/her behalf … An individual who filed an application for both monthly benefits and HI may:

  • Withdraw the claim for monthly benefits without jeopardizing HI entitlement; or
  • Withdraw the claim for both monthly benefits and HI.

The individual may not elect to withdraw only the HI claim.”

Nearly a decade later, on May 23, 2002, SSA tightened the noose still further, adding the following substantive rule to its Program Operations Manual:

The claimant can withdraw an application for:

  • RSI [Retirement or Survivors Insurance, i.e., Social Security] cash benefits only
  • RSI cash benefits and HI insurance coverage …, or
  • Medicare [Part B] only

However, a claimant who is entitled to monthly RSI benefits cannot [emphasis added] withdraw HI [Medicare, Part A] coverage only since entitlement to HI [Medicare, Part A] is based on entitlement to monthly RSI benefits…”

* For more information, read the complete Backgrounder.   PDF