For years, insurance agents have advised their Medicare-eligible clients who are still working and covered under their employer’s group health plan to decline Medicare Part B. There is a monthly premium for Part B coverage, and since the group plan is primary for companies with 20 or more employees, enrolling in Part B is unlikely to provide much additional protection.
These employees, their brokers explain, can simply enroll in Part B when they retire with no penalty and no waiting period since they are coming off of a group insurance plan. Part A, though, is a different story. By the time they reach age 65, most people have paid into the Medicare system for long enough to receive Part A at no charge — why not take it if it’s free?
These rules tie a person’s Social Security benefits to their enrollment in Part A, but the plaintiffs argue that the two government programs are voluntary and that the application for each of these programs is not dependent on the application for the other. In dismissing the case, Judge Collyer said that “requiring a mechanism for plaintiffs and others in their situation to ‘disenroll’ would be contrary to congressional intent, which was to provide ‘mandatory’ benefits under Medicare Part A for those receiving Social Security retirement benefits.”
She concluded that the “plaintiffs are trapped in a government program intended for their benefit. They disagree and wish to escape. The court can find no loophole or requirement that the secretary provide such a pathway.” The judge appears to be correct about congressional intent, as the Senate had an opportunity to modify this requirement during the last session but chose not to do so.
Jim Bunning is now retired, replaced by U.S. Sen. Rand Paul. There’s no word on whether Paul or another senator will reintroduce the bill. As for the lawsuit, the plaintiffs in Hall v. Sebelius have promised to appeal the decision, but it’s sure to be a lengthy process. One other possible solution lies in a bill that U.S. Sen. Orrin Hatch, R-Utah, plans to introduce that will, in the words of Roy Ramthun, President of HSA Consulting Services and former senior health policy advisor to President George W. Bush, “help take HSAs to another level.”
The bill, among other things, would allow an individual enrolled in Medicare Part A but not Part B to contribute to a health savings account. In a recent article, “Hatching a Bill to Take HSAs to a New Level,” Ramthun explains, “Once a person turns 65, they usually no longer contribute to their HSA because of automatic enrollment in Medicare Part A. However, the current deductible for hospital coverage under Medicare Part A is very high, almost $1,200 per admission, nearly equal to the minimum deductible required for HSA-qualified plans.