If You Don't Want Medicare Part A–Too Bad Says Court to Federal Retirees

A recent federal court decision will have significant repercussions for federal retirees who prefer to keep their health benefits program in retirement rather than go under Medicare Part A (hospitalization) coverage.

In Hall v. Sebelius (D.D.C. Civil Action No. 08-1715(RMC), 3/16/11), plaintiffs are retired from Federal employment, have reached 65 years of age, are receiving Social Security benefits, are entitled to Medicare Part A benefits but want to continue their Federal Employees Health Benefit program coverage, want to waive their Medicare Part A coverage, and want to continue receiving their Social Security annuity.

The Department of Health and Human Services insists that the only way plaintiffs can waive Part A Medicare coverage is to waive their right to receive Social Security and to repay any Social Security benefits that they have received up to the time of the waiver.

The federal retirees argued to the court that this requirement to waive Social Security and pay it back in order to waive Part A is contrary to the law.

Judge Rosemary Collyer has thrown the retirees’ case out ruling that it is “without merit.” (Opinion p. 1) She has entered summary judgment for the government. In short, Judge Collyer concluded that participation in Part A is “statutorily mandated” for those who reach 65 years of age and are receiving Social Security (“old age”) benefits. (p. 1)

The decision delves into the nitty gritty of the SSA’s Program Operations Manual System, which is an internal handbook used by agency employees who process claims. That handbook apparently spells out that anyone entitled to a monthly Social Security retirement annuity may not waive Medicare Part A entitlement. Further, the handbook provides that the only way to avoid the Part A entitlement is to withdraw the application for Social Security, which in turn requires repayment of all Social Security benefits received by the individual. (p. 8)

The three Federal retirees who tried to persuade the court to throw out the SSA interpretation wanted to keep their Social Security benefit but not Part A of Medicare since they had insurance under the FEHB.

Too bad. They lose. And so do a lot of other Federal retirees if this ruling stands and Congress fails to enact a legislative fix.

Hall v. Sebelius

© 2016 Susan McGuire Smith. All rights reserved. This article may not be reproduced without express written consent from Susan McGuire Smith.

About the Author

Susan McGuire Smith spent most of her federal legal career with NASA, serving as Chief Counsel at Marshall Space Flight Center for 14 years. Her expertise is in government contracts, ethics, and personnel law.

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  1. bob8778 says:

    Maybe the judge got it wrong. Wouldn’t be the first time. The Social Security Handbook they use says entitlement can’t be waived unless Social Security is waived. But entitlement is not the same thing as participation.

  2. Gov employee #2 says:

    So, can I refuse Medicare Part A upon reaching 65 yrs of age, AND the only income I have is CSRS after a 30+ year career?  No SS was ever paid, nor will benefits be claimed or received.  

    • Federal Inspector - 33 years says:

      Why would you want to?  You have already paid for Part A.  You might not want to select Part B which has an additional premium due.  Either way, Part A is already paid for, you decide on the other.

  3. Viking01 says:

    What a pile of bull feces.  I would rather pay for FEHB than go under the soon to be bankrupt Medicare. 
    But wait,  that my be the governments plan!  Get everyone on it then bankrupt it and tell those suckers they sould have canceled their SSI and gone private!  Or maybe the Government has a deal with China to cover them suckers under China SSI and they can lend the USA money!  Or maybe they they want to to to to to…..

  4. Wlpww1 says:

    if the government cant control the population one way it will find another
     this is only another example of getting the mandatory health plans enforced

  5. LoginIncorrect says:

    I don’t get it. It costs you nothing and it enhances your coverage.
    Under FEHB and Medicare rules:
    (1) Medicare Part A is premium-free. As a retiree, it costs you nothing.
    (2) You can keep your FEHB coverage in retirement, paying the same premium you paid while employed.
    (3) When a federal retiree, without other health coverage as a result of active employment, has dual health insurance coverage (e.g., FEHB and Medicare Part A), Medicare becomes primary and the FEHB coverage is secondary. In essence, FEHB becomes hospitilization ‘Medigap’ coverage to Medicare Part A.
    Where’s the beef?

    • William Black says:

      Retiring overseas is different. I have FEHB and TRICARE. In order to keep TRICARE overseas I have to pay FEHB and Medicare Part B (now going up to $150 PP). That brings my costs up to about $800 per month. Maybe I should cancel the TRICARE, but hey, I did 21 years in the Marines – I thought it was mine for life…..

  6. alawcai says:

    What about Federal retirees who turn 65 and do not get Social Security checks?  If you are under CSRS and do not eligible for any Social Security benefits, you still have to enroll in Part A.  Is anyone looking into that?

    • Ret Clms Rep Soc Sec Adm says:

      Any federal employee has been paying for medicare coverage since 1983.  Do you never look at your pay stubs.  If you worked 10 years from 1983 to present, you have 40 quarters of coverage for medicare.  I am retired and will turn 65 next year.  My husband is 67.  He receives social security checks and is on Part A.  (free).  He turned down Part B.  I continued FEHB for family coverage.  When I turn 65 I will apply for Part A only.  I did not work under social security and cannot get spouses benefits due to government pension offset.

      BC/BS continues the same coverage it always has for us.

      Clue:  Whether CSRS or FERs-when you turn 65 if you continue your full federal coverage is is beneficial to file for Part A and turn down Part B (which is now (115 a month).  If you terminate your federal coverage then apply for both Part A and Part B for each party in your couple. 

      If Tricare is involved-I have no idea as they seem to have their own rules.

  7. LongTimeFed says:

    Boy is that stupid. Here people are trying to save the federal government money and they’re saying no. I hope they take this to the Supreme Court, the President, and Congress.

  8. Dave Ford says:

    I’m a retired Federal employee that also doesn’t want Medicare part A or B when I turn 65.  I do not and cannot collect Social Security as I don’t qualify because I don’t have 40 quarters.  Can I decline Medicare Part A?  If I decline Medicare Part A does my current Federal insurance company remain as primary?  I think it’s a rip off for retirees to be forced to accept Medicare Part A and if we do not sign up for Medicare Part B our primary insurance company will only pay what Medicare would pay and leave us with all payment above 80%.

  9. LA says:

    What are your options if you want to get other healthcare in additon, like Blue Cross?




  11. Lacrabby says:

    I don’t understand why someone would want to waive part a of medicare. I know that you can’t have an fsla if you have medicare, but what is the disadvantage to having part a and fehb?

  12. Guest says:

    This is both scary and confusing. I have Medicare Parts A & B. I also have a FEHB (Blue Cross/Blue Shield) supplementary health insurance plan which covers services not covered or allowed by Medicare. I don’t see where this situation is addressed in the ruling. I was never informed of this by my Personnel Representative at the time of my retirement from the government. Why bring it up now? It seems this would create a tremendous hardship for many seniors. How could they possibly pay back or live without their social security payments? Is this administration trying every way possible to kill us seniors. We did pay into the system all our working lives.

  13. Gary Huffman says:

    I hate to tell all of you armchair Medicare experts, but Medicare Part A has never been “free”! As I gaze at my L.E.S. under the “Deductions” column I notice a deduction for Medicare in the amount of $26.56 and as I gaze at the column marked “Benefits Paid By Government For You” I also notice a payment of $26.56. So, if my math i12 yearss correct, the total for Medicare Part A would be $53.12 per pay period multiplied by 26 pay periods would equal $1381.12 per year at my present pay grade and level. I have done this for 31 years now and if I reach age 65, according to the life expectancy charts, I will draw SS and Medicare Part A for another 10 to 12 years and seeing as how I pay taxes, I’m actually paying the amount under the column “Benefits Paid By Government For You”. If you didn’t know it, I’ll tell you a secret now, the “Government” has no money that “they” can give you! That money comes from taxpayers just like you and me. So any benefit that you get from the “Government” actually comes from yourself and other people. It’s all a big PONZI scheme. Think about it people!! You pay taxes on everything, but you get a job and some benefits after 30 or 40 years. If you work for the “Government” or as it’s otherwise known, “THE PEOPLE”, you’re actually working for yourself and paying yourself a wage and after 30 or 40 years you’re giving yourself a retirement stipend. If you’re going to work for yourself doesn’t it make more sense to work at home? I know I and my family would be alot richer now, maybe not monetarily but richer as a family because I would not have missed all the plays and ballgames and family functions because I was chasing the illusion of a “conventional secure life and retirement”. Use your heads and actually think deeper than what you see and are told!

    • Sam Hill says:

      Your are correct, Medicare Part A is NOT free as so many have assumed.  It was taken out of your yearly salary (the employee has no choice, you HAVE to buy this insurance; not constitutional, but that’s another story…).  You are paying for it one way or another.  I guess a lot of people have to learn that there is no such thing as a free lunch.  The correct way to phrase it is to say that no additional premium is required for Medicare part A (because you already paid for it).

  14. Sharon1525 says:

    I work for SSA and what Federal retiree’s don’t understand is their Health Insurance under FEHB in retirement is Primary because they did not elect Part B. If they become hospitalized then FEHB must accept the Part A provisions and FEHB will then cover the rest. I do not understand why no one disuccsed this provision.

  15. Guest says:

    At the time we took our insurance with the Government, part of the plan was to take our government insurance into retirement…. what say you about that? No where in my paperwork does it tell me that when I retired, I was going to have to make a change to Medicare or any part of it. The requirement was to be a government employee 5 years to be able to get the insurance. There is no mention of any change at retirement. Also, I put into Social Security, that’s my money I contributed every month, so why would I have to return it because of who I get my medical care from? This is stupid.

  16. GUEST says:

    Two questions:
    (1) Is Medicare Part A mandatory for a CSRS employee/retiree, not eligible for SS retirement benefits, upon reaching age 65?
    (2) Why would anyone want to decline Medicare Part A benefits?

    • Ret Clms Rep Soc Security Adm says:

      1.  No it is not mandatory but why wouldnt you take the coverage.
      2.  I have no idea.  It sounds good to me.  Medicare will be primary payer for inpatient hospitalizations, Fed insurer will be secondary.  Fed Insurer will be primary for outpatient, doctors, everything else. 

      People writing on this blog seem to be turning themselves around trying to understand something that is very simple!

  17. Dusty says:

    This lawsuit makes no sense. The Judge is right.

    I have been retired for 3 years. I signed up for Medicare A & B, kept my FEHB coverage.

    My FEHB provider includes pills which is desirable, avoids Medicare Part D. Some costs of pills are so high that this coverage is essential; the insurance provider forces doctors & pharmacies to find cheaper medications that do the same thing and to use equivalent generics. That is a major benefit in and of itself. Otherwise, the coverage keeps cost, co-pay, within reach.

    Upon retirement Medicare becomes primary coverage. Period. If the Medicare coverage is declined, the other insurance, FEHB or not, assumes risk and coverage only beyond what Medicare will pay. Without Medicare the person is responsible for what Medicare would have paid.

    Upon retirement, at least if that retirement is at or beyond ‘SS full retirement age,’ the medical insurance premium for the continued coverage drops dramatically.

    Given the high cost of medical care, the high probability of need for medical care as we get older, not having all possible coverage makes no sense. My own personal experience: all this coverage has been a lifesaver, financially and literally.

  18. Deharmon3 says:

    As an federal employee under CSRS retirement system and having acquired all my quarters for social security benefits I have already felled prey to the Windfall Elimination Provision, am I now to understand that I have to give up getting social security altogether to take my federal benefits into retirement?

    • Guest says:

      Nope. You give up nothing. If you decline Part A then you give up SS benefits. Part A is free if you have 40 quarters of coverage. If you take Part A, you get your SS, you get your FEHB, you get your CSRS pension.

      there are many insurance companies that require you to take Medicare if you’re eligible to lower THEIR costs. If you decline and refuse to take Medicare, many companies pass along the higher costs (stuff that Medicare would have covered) to you. That’s why most people take whatever Medicare they’re eligible for.

  19. WRBlack says:

    I wonder how this affects those of us who have retired overseas. We cannot use Medicare anyway. The only thing we have is FEHB. So no that is cut? I need some answers here.

  20. RobilottaTA says:

    I do not understand the significance of this ruling? The rules say that if you are retired from Federal Employement and you have FEHB AND you are 65 or older – Medicare is primary and FEHB is secondary. This is NOT new. Is it that, as primary Medicare limits what doctors you can see? I don’t know. I am not seeing the downside here-anyone?