Posted by MataHarley on 3 August, 2009 at 2:00 am. 17 comments already!

In light of the POTUS’s vehement promise that O’health care is to cut costs, yet continues to leave a patient’s “choice” intact, it may behoove us to examine an ongoing story that started back in October of 2008. That would be when Brian Hall of Catlett, Va; Lewis Randall of Whidbey Island, Wash.; and Norman Rogers of Miami, Fla filed a lawsuit in US District Court, District of Columbia… now known as Hall v. Sebelius.

Choice? *What* choice?

Apparently, since a Clinton rule change to Social Security regulations in 1993, those over 65 years of age have had a choice all right… a choice to enroll in Medicare, or waive their Social Security retirement benefits. Not only that, if you applied for SS bennies at 62, and received SS payments and RSDI, you have to pay them back when you opt out of HI.

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.”

Notice this Clinton rule change allows you to yield your SS benefits and keep Medicare, but you may not keep your SS retirement checks and yield your Medicare enrollment.


Feeling the need to pile on to an already bad rule that was accomplished the back rooms of the Clinton WH, and outside mandates that require notice and comments via the Federal Register, the Bush admin further entwined the SS/Medicare knot when, on May 23, 200, the SSA added the following 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…”

Apparently, for a decade and a half, most of us didn’t realize that the only “choice” we have on senior health care was between substandard Medicare and our Social Security retirement funds. Obviously, that “promise of choice” Obama, Pelosi and Reid are offering Americans is only offered to anyone as long as they are under 65 years of age. How convenient is that?

Not to mention, the number of American’s cornered without options unwittingly is about to increase massively with the advent of 78-79 million baby boomers ready to bog down the system

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.

How many with no “choice”?

So how many Americans are mandated out of “choice” now, and in the near future years?

Let’s see, between the current seniors and the boomers, how much of the 307 million estimated US population have the choice of being robbed of their SS benefits, or having Medicare forced down their throats? If we have a look at a from the Federal Interagency Forum on Aging Related Statistics, and depending upon the death rates of the existing seniors, it looks like that number will be approaching 50 million right about the time Obama’s hoping he’s planning his 2nd Inaugural party, and another 5-8 million he’ll doom in any second term.

age projections 65 and over

• In 2006, 37 million people age 65 and over lived in the United States, accounting for just over 12 percent of the total population. Over the 20th century, the older population grew from 3 million to 37 million. The oldest-old population (those age 85 and over) grew from just over 100,000 in 1900 to 5.3 million in 2006.

• The Baby Boomers (those born between 1946 and 1964) will start turning 65 in 2011, and the number of older people will increase dramatically during the 2010–2030 period. The older population in 2030 is projected to be twice as large as in 2000, growing from 35 million to 71.5 million and representing nearly 20 percent of the total U.S. population.

• The growth rate of the older population is projected to slow after 2030, when the last Baby Boomers enter the ranks of the older population. From 2030 onward, the proportion age 65 and over will be relatively stable, at around 20 percent, even though the absolute number of people age 65 and over is projected to continue to grow. The oldest-old population is projected to grow rapidly after 2030, when the Baby Boomers move into this age group.

That’s sobering. A whopping 20% of the US population will have their health care options stripped away by 2030. All in the dark of night, and done behind our backs.

Unless, of course, you’re a member of Congress….

Certainly this number of “no choice but government choice” citizens puts Obama closer to his years of stated goals to go to a single payer system.

Are the terrible trio of tyrants speaking of these lost rights to choose during this debate? Or doesn’t 20% of the population that this affects deserve to know? Does their “reform” do anything to correct this? But of course not. Which brings us to….

Who’s suing, and what’s the problem?

Back to Hall v Sebelius… Attorney Kent Brown, legal counsel for the plaintiffs, calls the rules “….illegal and unconstitutional” and that “forced participation is a violation of constitutional rights.”

Since the original lawsuit was filed last fall, there’s been a few more plaintiffs sign on, including former US Rep for Texas, Dick Armey. The lead plaintiff, Hall, was a former HUD employee. John J. Kraus was an aerospace and defense industry engineer, retiring in 2007 from the
U.S. Naval Air Systems Command. Lewis Randall was a private investor who served on the board of directors for E*Trade. Norman Rogers is a UC Berkeley grad who was founder and CEO of Rabbit Semiconductor. All gentlemen are in the financial position to obtain private insurance from their provider of choice.

Now’s where we need to address some realities for those of you who will merely shrug and say “get an umbrella policy”. Doesn’t work that way in real life.

First of all, medical providers only offer options covered by Medicare to Medicare patients. Even if you’re astute enough to ask if that’s the *best* treatment for a particular ailment, you’ll find that your umbrella policy will not cover the better alternative treatment when Medicare will pay for a less effective treatment. So it’s cash out of pocket. I have friends that go thru this constantly with both Medicare and the VA when caring for their parents already in the system.

John Goodman has even more about Medicare flaws on his Health Policy Blog.

Why might they want out? Medicare, like all other government controlled health care programs of a certain age, responds to medical progress at a glacial pace, is fiscally unsustainable, and plagued by shortages.

Worse, it is not accountable when its policies harm patient care. Its price controls prohibit patients from using their own money to pay for extra services or better service from a physician. Its auditing practices make it impossible to maintain a confidential doctor-patient relationship. It dictates services and treatments to patients, physicians, and hospitals without knowing anything about a specific person’s situation.

For example, the October 15th Wall Street Journal has a story about how private insurers are taking advantage of improvements in drug delivery systems. Rather than pay for someone to spend two months in a hospital or nursing home exposed to all kinds of pathogens and inconvenience, or to travel long distances to a central infusion center, private insurers are paying for at home infusion using backpack pumps and visiting nurses. The at-home cost is generally $150 to $200 a day.

Getting Medicaid to pay for at-home infusion will require an act of Congress. Medicare Part D pays for the drugs but not for the pharmacy, equipment, and nursing services that account for roughly half the $200 a day at-home infusion costs. It will, however, pay a hospital $1,500 to $2,000 a day for the same drugs administered on an inpatient basis. This is a tremendous waste that will never show up in studies of Medicare efficiency.

Ah yes… and here’s our POTUS, attempting to convince the public that government seizing control of our health care will better manage the costs when every indicator shows otherwise.

When it comes to this lawsuit, Sebelius and her HHS department are passing the buck to the SSA… who just says nonchalantly, dat’s the rules.

An HHS spokesman referred to the Social Security Administration.

“As far as we know, the law says that if you’re getting a Social Security check, you’re getting Medicare Part A. Right now, we have no other comment on this lawsuit,” HHS Deputy Director Peter Ashkenaz told

“I think you probably need to check with Social Security, because they would have been the ones to have written those rules,” he said.

The Social Security Administration did not return calls. But the 1993 additions to Medicare eligibility, made during the Clinton administration, say that “the only way to avoid HI (health insurance) Entitlement is through withdrawal of the monthly benefit application” and that “an individual may not elect to withdraw only the HI claim.”

Instead, the Obama attorneys filed a motion to dismiss the lawsuit on May 26th, saying it’s without merit.

Government lawyers made the following two arguments:
1) The plaintiffs don’t have standing to sue because they have not been harmed by the policies.


2) The plaintiffs have not exhausted all of the ‘administrative remedies’ available to them (i.e. they did not jump through enough bureaucratic hoops before seeking legal remedy).

Brown’s analysis of the motion to dismiss labels both of these arguments pure bunk. First, they are not only having their retirement funds… paid into the system for decades… threatened, but are being mandated to accept inferior care to what they can purchase, rationed care that promises to be rationed more stringently based on current proposals, and that they have lost many of their Federal Employee Health Benefits by being forced into Medicare A. Brown puts a price tag of about $30K annual loss to each of the individual plaintiffs.

As for the saying they haven’t attempted other legal remedies; at least one of plaintiffs has attempted to resolve this administratively… as have many seniors not part of the lawsuit… and achieved the same results. A bureaucratic runaround, or a refusal to make a decision on the request as a bureaucrat.

The Secretary of Health and Human Services has even informed one senior she will not decide such a request. Plaintiff John J. Kraus requested a hearing before an Administrative Law Judge in February 2006. He received no response to his request for more than three years. Beyond that, the issue raised by the Plaintiffs is not one that bureaucrats should decide. Although the government claims the Plaintiffs should exhaust administrative remedies, no procedures exist for the Plaintiffs to challenge the phantom regulations, creating a classic Catch-22 (telling them they must exhaust administrative remedies, while no administrative remedies exist). The issue obviously will have to be decided by the Court – and since the Plaintiffs are losing money and benefits, the Court should decide quickly.

Note the emphasized sentence above… that the ALJ did not respond for three years to Kraus’ request. This would be, of course, the same “transparent” system that our resident and friendly nemesis, Larry Weisenthal, was extolling in one of our thread discussions. Needless to say, it’s darned hard to get legal recourse in the federal courts if the system won’t move you thru the administrative appellate process, eh?

So other than the basic right of “choice” being denied, guaranteed being screwed over by no access to other care options, what else is at stake?

the heart of the entire health care “reform” debate.

As Matthew Jaffe from ABC news pointed out in his May 12th article, the Medicare “trust fund” will be insolvent by 2017 [Mata note: 2019 according to the Medicare Trustees], and Social Security’s “lock box” will be empty by 2037.

Brown specifically notes that this asinine rule, thwarting seniors’ choices, directly reflects upon the rising costs of Medicare.

If just 1 percent of Medicare eligible seniors chose not to participate, Medicare expenditures would decrease by about $1.5 billion per year immediately and by approximately $3.4 billion per year by 2017. These not insignificant savings would continue to increase for several decades as the “Baby Boomers” retire.

We calculated this savings estimate using data from the Centers for Medicare and Medicaid Services, the Medicare Payment Advisory Commission, and the annual report of the Medicare Trustees.

If we could save $1.5 bil annually with just 1% of Medicare opt outs, just think how much 5% of those evil, heartless wealthy Americans could save?

And what about government red tape that adds unnecessarily to costs? Even Oregon’s very liberal Dem Senator, Ron Wyden, has penned a letter to Sebelius about the waste that gets piled on to Medicare patients with a cumbersome competitive bidding process that often results in longer hospital stays, and thwarts more cost effective home care.

I/We write to convey concerns regarding the CMS Competitive Bidding Program for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS). Reports from stakeholders about the current bidding process created by the previous administration suggest that the quality of DMEPOS products and services for Medicare beneficiaries may be threatened.

The administrative process and technical issues are the main areas of concern brought to my/our attention. Ongoing modifications to the online applications appear to have created significant obstacles for suppliers during the application process. This submission process reportedly led to numerous errors which burdened applicants and led to technical disqualifications. It has also come to my attention that CMS may have referred suppliers to credit bureaus who did not provide required information. I/We are told that this problem was not addressed until after the bids were already awarded. A lack of transparency may have further complicated relations with the DME suppliers, while guidance for bid evaluation may have also been overlooked. I/We are told that numerous bidders were disqualified without reason or recourse and that many suppliers were forced to desperately “blind bid” below sustainable rates to retain Medicare beneficiaries or leverage competition.


A final concern brought to my/our attention involves beneficiaries who may need multiple competitively bid products and services. I/We are told that if a patient needs a hospital bed, walker, and oxygen, the medical team may need to coordinate three different contractors to provide each of the home-based services prior to discharge. This means that hospitals may be unable to secure the necessary equipment for timely discharge, forcing additional costs to patients and government, since it is possible for the contracted Medicare supplier to win the Medicare contract, yet not be contracted with the secondary payers (e.g., Medicaid, Medicare Advantage plans, etc.).


Read letter in it’s entirety

A Government heist spanning
our entire working lives

What makes all this more insidious is that every one of us pays FICA on every paycheck for coverage we cannot even attempt to use until we are 65… and then, an additional chunk of change is further withheld from our SS checks monthly as additional premiums.

This means that, for most of our working lives, we’re paying for Medicare insurance for others, and if we want our SS dollars they *also* rob, we must continue to pay for Medicare… even if we don’t want that coverage… merely to get our SS dollars back.

Plaintiff Norman Rogers feels exactly the same way… being held hostage for a lifetime of robbery.

Norm Rogers of Illinois, one of the plaintiffs in the lawsuit, said the issue of forced Medicare enrollment hit home with him.

“It was really personal,” Rogers said. “Since I saw my parents die on Medicare, I decided I didn’t want to be a member. It’s not a good medical system. I don’t want to be in this system, yet I spent my whole working life paying taxes into Social Security, and I want to get that pension.”

Rogers said he watched doctors go to his parents’ nursing home for non-emergencies only if they could visit several patients at the same time, because the pay was not sufficient to make individual cases worth their while. He said he wants better health care, which he can afford, but if he enrolls in Medicare he will not be allowed to offer doctors any additional pay.

“They try to give everyone everything for free, and the cost runs out of sight,” Rogers said. “They try to make up for it by squeezing the doctors. If you could pay the doctors more, the patients who could pay the doctors more would get better care.

“The logic of government-run medical care is that everyone has to be treated the same,” Rogers said. “The result is the system is overused, the doctors are run ragged, and you get into a situation where you need an operation and they say, ‘We’ll get to you in six months.’

I don’t know about the rest of you, but I say this lawsuit needs to be spread around for public consumption. These gentlement deserve our support and our voices added to their outcry. For Sebelius, the SSA and Obama to attempt to sweep this under the rug, and ignore the valid points raised, is indication that this “reform” has absolutely nothing to do with controlling costs.