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

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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

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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.