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Lawsuit Seeks to Make Medicare Opt-Out a Real Option

During recent state legislative debates on Tennessee challenging the new federal health care policy mandates, an auxiliary issue that’s come up is Medicare: What kind of penalties do people face who opt out of the U.S. government’s health insurance plan for the elderly?

The question has arisen in committee discussions on the “Health Freedom Act,” which has already passed in the Senate.

Some House Democrats who oppose the act say its language directing the state attorney general to defend Tennessee citizens against involuntary federal health care directives might give people the impression they can also avoid participating in Medicare without fear of federal government retaliation, or with the backing of state legal resources.

During a Commerce Committee hearing last week, Rep. Craig Fitzhugh, a Ripley Democrat, asked the Health Freedom Act’s sponsor, Mike Bell, if the act’s language “is…broad enough to say that I could quit paying my Medicare taxes, and there would be no penalty for doing that if I just opted out of Medicare.”

Bell, a Riceville Republican, answered that current law already allows one to opt out of Medicare. However, in order to do so, a person must also forfeit entitlement to federal Social Security benefits.

Bell went on to indicate that the Health Freedom Act’s intent isn’t to shield Tennesseans from paying federal taxes of any kind already in existence — just that they not be punished for refusing to buy health insurance or participate in new federal health programs going forward.

In fact, the question of just how mandatory Medicare is — and whether the government can indeed withhold Social Security benefits from those who choose to opt out — is a legal dispute that may be coming to a head.

Congress has in reality never stipulated that, as a condition of dropping out of Medicare, Americans must also forfeit their Social Security entitlements, argues Kent Masterson Brown, a Kentucky-based attorney currently suing the federal government on the issue.

There is indeed an active and operative bureaucratic directive to Medicare and Social Security administrators, nearly two-decades old now, that says citizens who opt out of Medicare must forfeit Social Security benefits. Part of the Social Security Program Operating Systems Manuals, it furthermore declares that people must return any Social Security payments they’ve accepted should they choose to ditch Medicare.

Those policies were instituted by the Department of Health and Human Services in 1993, at the height of then-First Lady Hillary Clinton’s effort to overhaul the country’s health care system.

But while Mrs. Clinton’s effort ultimately fizzled, the policy lives on — even though it is a clear violation of both the intent and language of federal statutes governing Medicare and Social Security, Brown said. Brown and five clients he represents who are challenging the policy are arguing that because the directive was illegally promulgated, it should be nullified.

“Making Medicare mandatory is totally contrary to the statute,” Brown told TNReport. “It is an entitlement — you shall be entitled. Entitlement doesn’t mean you have to take it. It just means you have a right to it. Social Security and Medicare both read the same way — ‘shall be entitled.’

“Historically, the secretary of Health and Human Services and the commissioner of Social Security have always interpreted Social Security to be voluntary — you can take it or not,” Brown added. “If you want to leave all your money in there, fine. If you want to take it you can take it.”

Just last week, over the objections of the U.S. Justice Department, Brown and his five clients were given the go-ahead to proceed with their case from a U.S. District Court judge in Washington, D.C. “(N)either the statute nor the regulation specifies that Plaintiffs must withdraw from Social Security and repay retirement benefits in order to withdraw from Medicare,” wrote Judge Rosemary Collyer of the District of Columbia.

Brown’s clients want out of Medicare but don’t want to give up the Social Security benefits they’ve paid into all their lives. All five — one of whom is former U.S. House Republican Majority Leader Dick Armey, now the chairman of the conservative activist group FreedomWorks — say they prefer their own health plans. The policies belonging to the plaintiffs — who in addition to Armey include four others, two of them former federal employees — range from high-deductible insurance coupled with health savings accounts, to standard Federal Employee Health Program benefit packages, said Brown.

Brown attributes the fact that the government’s punitive policy has gone unchallenged for so long to the prohibitive costs associated with legal challenges against the federal government on health care issues. Also, the administrative appeals processes people must typically exhaust before they’re allowed to use the courts to settle their federal regulatory grievances is extremely long and grueling, he said.

“Litigation like this is vastly expensive — it takes a tremendous amount of resources,” he said.

Brown said that in his dealing with federal attorneys on the matter, they’ve mostly justified the government’s actions by arguing that agency decision-makers are deserving of much latitude and deference when it comes to interpreting federal laws as they go about implementing or administering programs.

Brown added that it is unclear how Clinton administration officials determined they had the authority to make such sweeping policy shifts contrary to the statutes. For his purposes, Brown said he doesn’t really care what they did to rationalize their actions; that he can prove the bureaucrats did indeed promulgate unlawful rules is all that really matters.

And while Brown, who occasionally writes for and speaks on behalf of free-market organizations like the Cato Institute, is quick to point out that his clients’ Medicare case is far removed, legally speaking, from the ongoing debates over the federal health care overhaul, he also believes it serves as a warning that where vast and powerful agencies are concerned, policies are often executed very differently manner than that promised not just by politicians, but the law itself.

Brown worries the agency officials who will administer the health reforms signed into law last month could promulgate “the most onerous rules imaginable.”

His case “illustrates the power these people will wield,” said Brown. “It’s absolutely frightening to think what they could do.”

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Senate Urges AG Cooper to Join ObamaCare Legal Fray

The Senate voted 21-8-1 for a resolution Monday night asking state Attorney General Robert Cooper to join other states in contesting the federal health care bill on the grounds it is unconstitutional.

The vote follows the lead of Lt. Gov. Ron Ramsey, R-Blountville, who is fighting hard against an element of the bill that mandates participation in the federal plan, which Ramsey says is an unconstitutional requirement. The resolution, SRJ897, now moves to the House, where it is expected to be taken up this week and would be on the House floor next week.

Also on Monday night, on the other side of the Capitol, the House of Representatives passed a resolution denouncing the federal health care law after debating for almost two hours.

Dozens of lawmakers rose to speak out for and against the resolution. Those who opposed the resolution said they were primarily concerned for their constituents with preexisting medical conditions who can’t find private insurance. Supporters of the measure railed against officials and lawmakers in Washington, D.C. for overstepping their constitutional authority and meddling in affairs properly left to the states to address.

That resolution passed 66-29.

The national discussion on the federal bill shows what would appear, on the surface, to represent a concerted effort between the states to organize a legal resistance, but Ramsey said he has not tried to contact leaders in other states about the matter. Ramsey also said Monday night he had not spoken to Cooper since about a week ago on the issue.

He did, however, say his office has received some contact from Nevada, the home state of Senate Majority Leader Harry Reid in the U.S. Senate, and received calls from “a couple of others,” but Ramsey said those calls had been to his staff and he had personally not spoken with the callers.

“This resolution urges our attorney general to join what’s now 19 attorneys general in the United States and challenge the constitutionality of the health care plan,” Ramsey said. “It’s unprecedented that the federal government is requiring a private citizen to enter into a transaction with a private company and buy health insurance. That’s never been done. There’s no precedent. I do believe that’s unconstitutional. I hope Attorney General Cooper decides to join in with other states.”

Ramsey makes no bones about the fact that the new law, constitutional or not, carries with it a large unfunded mandate on the state. Ramsey is a candidate for governor in the Republican primary, and he says his position on the federal statute is not about his gubernatorial candidacy. But he openly admits he does not want to face the financial burden he says the law would bring on the next governor.

Speaking with reporters outside the Senate chamber following the vote Monday, Ramsey was asked if he believed Cooper would fight the federal bill if the attorney general went with the will of the people, but Ramsey quickly said it should not happen on that basis.

“I hope he doesn’t come down with the will of the people. I hope he does it because it’s the right thing to do,” he said. “So I don’t know. I do believe the will of the people out there is to challenge the constitutionality of this. People are upset. We have an overreaching federal government that’s trying to take over one-sixth of our economy.

“I know I’m upset, because I do want to be the next governor of the state of Tennessee. We’re going to have about a $250-million unfunded mandate. I learned something a long time ago. If the federal government gives you an estimate, add at least 50 percent to that. I think it’s a budget breaker here in Tennessee.”

Ramsey pointed to bipartisanship shown in the 3-to-1 margin in the Senate vote, and he is hopeful the attorney general will join the fight.

“I think the same thing will happen in the state House,” he said. “I know he has said he may not join in, but I think with an overwhelming vote like that, hopefully, he will.”

Ramsey has repeatedly made the distinction between his effort to have the law found unconstitutional and Cooper’s opinion recently that he could not support the Tennessee Health Freedom Act, a bill in the General Assembly, because that bill would bump up against the overriding authority of the federal government.

Ramsey says the earlier opinion from the attorney general was that he could not challenge the law based on those grounds but that Cooper has never said specifically whether the federal law is constitutional or not. That’s what Ramsey seeks to clarify.

Ramsey has said it is possible he would seek special counsel on the issue but that he his hopeful Cooper will join in the constitutional challenge.

Business and Economy Health Care Liberty and Justice

House Moves to Prevent ‘Exchanges’ from Covering Abortions

The House of Representatives approved a measure Monday night that seeks to ensure Tennessee tax dollars not be used to fund abortions under new federal health care overhaul.

Sponsored by Rep. Matthew Hill, R-Jonesborough, the measure would prohibit coverage of abortions through the insurance exchanges established in the Patient Protection and Affordable Care Act signed into law by President Obama last month.

“This issue boils down to one thing, and that is to make sure that Tennessee tax payers are not subsiding abortions as it pertains to these new government-subsidized health care exchanges,” Hill said Monday.

Lawmakers approved the measure 70-23, although some worried the language in the bill would exempt certain types of birth controls pills or devices.

“We’re on dangerous ground here because we’re trying to regulate an industry that hasn’t really begun,” said Rep. Jeanne Richardson, D-Memphis.

House bill 2681 does not change the current state law which allows abortions. Women who access government-subsidized health insurance would have to pay for an abortion out of pocket, or through TennCare if they are indigent, Hill said.

Abortion coverage was a hot topic in Washington when lawmakers hammered out the health care reform language last month. President Obama signed an executive order promising that abortions be left out of the reforms’ health care coverage.

A line in the legislation ultimately left it up to states to ban abortion coverage in qualified health plans.

Press Releases

TN Right to Life Applauds House Action to Restrict Tax-Funding of Abortions

Press Release From Tennessee Right to Life, April 12, 2010:

(Nashville) In a dramatic show of opposition to tax-payer funding of abortion, a strong bi-partisan majority of pro-life House members passed HB 2681 which strictly limits the use of public funds in health exchanges mandated by the new federal health plan.

The language was passed 70-23 and states: “No health care plan required to be established in this state through an exchange pursuant to federal health care reform legislation enacted by the 111th Congress shall offer coverage for abortion services.”

The state’s leading pro-life organization applauded the bill’s lopsided passage.

“Tennessee is a strongly pro-life state,” said Brian Harris, president of Tennessee Right to Life. “Following years of a pro-abortion minority squelching the voices of the majority, our legislators have boldly expressed our state’s commitment to life,” Harris said. “We thank each pro-life member for their leadership and their courage.”

Right to Life singled out the bill’s sponsor, pro-life state Representative Matthew Hill (R-Jonesborough) for praise. “Regardless of the attacks brought by pro-abortion activists, Rep. Hill remained focused on the mission of protecting unborn children and providing real help and alternatives to women and families in need,” Harris said.

The Senate companion, SB 2686, will be heard in the Commerce committee on Wednesday where pro-life advocates hold a strong majority.