Health care freedom, Medicare enrollment and other paralogisms: Hall v Sebelius

Transcription

1 Trinity College Dublin, Ireland From the SelectedWorks of Mel Cousins May, 2012 Health care freedom, Medicare enrollment and other paralogisms: Hall v Sebelius Mel Cousins, Glasgow Caledonian University Available at:

2 Health care freedom, Medicare enrollment and other paralogisms: Hall v Sebelius 1 This is not your typical lawsuit against the Government. Plaintiffs here have sued because they don t want government benefits. 2 Rather overshadowed by the Supreme Court hearings on the constitutionality of the Patient Protection and Affordable Care Act (PPACA), another case involving a claim for health care freedom has recently been dismissed by the DC circuit court of appeals. 3 The case is entirely without any legal interest (or indeed legal merit) and, from a purely legal point of view, is barely worth reporting. Nonetheless from a broader political science perspective, it may be worth noting. The issue The plaintiffs were enrolled in health plans under the Federal Employees Health Benefit (FEHB) program and wished to continue that coverage in full. Their insurance providers, however, (allegedly) restricted their coverage of health insurance on the basis that they were entitled to public health care under Medicare Part A. Entitlement to Medicare Part A arises as follows. Under the Medicare Act: Every individual who: (1) has attained age 65, and (2)(A) is entitled to monthly insurance benefits under [42 U.S.C. 402(a)], 4... shall be entitled to hospital insurance benefits under part A The plaintiffs were all over 65 and, having voluntarily claimed them, were receiving social security retirement benefits. As the majority of the court of appeals put it: Citizens who receive Social Security benefits and are 65 or older are automatically entitled under federal law to Medicare Part A benefits. To be sure, no one has to take the Medicare Part A benefits. But the benefits are available if you want them. There is no statutory avenue for those who are 65 or older and receiving Social Security benefits to disclaim their legal entitlement to Medicare Part A benefits. 6 And that is really the end of the case against the government. 1 Hall v. Sebelius, 667 F.3d 1293 (D.C. Cir. 2012) cert denied 133 S. Ct. 840 (Feb ). The decision in Hall was followed in Association of American Physicians & Surgeons v Sebelius, 746 F.3d 468 (D.C. Cir. 2014). 2 Judge Kavanaugh in Hall v. Sebelius, p. 1. Reference here is to the slip opinion. 3 For a view of the case more sympathetic to the plaintiffs see or 4 That is social security retirement benefits U.S.C. 426(a) U.S.C. 426(a).

3 The plaintiffs obviously see the issues somewhat differently. They have consistently (and persistently) mischaracterized the issues involved. 7 The Fund for Personal Liberty presents the issue as: Does the federal government have the right to deny otherwise eligible retirees their Social Security benefits if those retirees choose not to enroll in Medicare even though participation in Medicare, under law... is voluntary...? The plaintiffs arguments focused on the Social Security Administration s Program Operations Manual (POMS). The POMS, recognizing that [s]ome individuals entitled to monthly benefits have asked to waive their HI entitlement because of religious or philosophical reasons or because they prefer other health insurance, provide that 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 [SSRB] and HI benefit payments made. 8 The plaintiffs argued that the POMS force them to enroll in Medicare Part A and provide that they will lose their monthly Social Security Retirement benefits if they choose not to enroll. 9 However, as both the distinct court and the (majority of) the court of appeals pointed out, entitlement to Medicare arises by operation of law, not the POMS. 10 As the district court put it The statute does not require any enrollment procedure for this entitlement to attach. 11 The court concluded that Plaintiffs would read entitled to require either an application to enroll in Medicare Part A or at least an opportunity to dis-enroll because they define entitled to mean: to give legal right or legal title to, qualify [one] for something; furnish with proper grounds for seeking or claiming something. Congress knows how to write such a provision and, in fact, did so for persons who are not entitled to Medicare Part A but have (1) enrolled in Medicare Part B and (2) are citizens or have resided for five years' continuous residence in the United States as aliens lawfully admitted for permanent residence. Such persons must enroll and pay premiums for Medicare Part A coverage. In contrast, as Plaintiffs acknowledge, they are entitled to Medicare Part A without enrollment because they are 65 and are receiving Social Security Retirement benefits. Requiring a mechanism for Plaintiffs and others in their situation to disenroll would be contrary to congressional intent, which was to 7 Admittedly a necessary tactic given that, on a correct characterization, they have no case. 8 POMS HI Hall v Sebelius, 770 F.Supp.2d 61 (DDC 2011) at Ibid at F.Supp.2d 67.

4 provide mandatory benefits under Medicare Part A for those receiving Social Security Retirement benefits. 12 As noted above, the court of appeals took a similar view. It focused on the fact that entitlement to Medicare Part A was automatic and, correctly, did not even mention the POMS which are irrelevant. In contrast, Judge Henderson (quoting Sherlock Holmes but displaying the analytical skills of Dr Watson) dissented. She argued that there was no statutory basis for the challenged provisions of the POMS, which were, therefore, ultra vires. 13 Although the POMS seem a reasonable attempt, in the absence of any statutory provisions, to allow persons who wish to do so to return to the status quo ante, Judge Henderson does have a point that one searches in vain for any specific statutory authorization. However, if she is correct, it simply means that there is no possibility of reversing the process whereby entitlement to Medicare Part A arises and her analysis is of no benefit whatsoever to the plaintiffs. One cannot find that a process of Medicare Part A disenrollment with repayment of pension is ultra vires because there is no statutory basis for it but conjure up a non-existent process of disenrollment without repayment for which there is no basis, statutory or otherwise. The plaintiffs also raised various largely unspecified constitutional issues. For example, it was argued that the case involved a violation of the First, Fourth, Fifth, Ninth, and Fourteenth Amendment privacy rights of the Plaintiffs to exercise their freedom to choose their own health care and health care provider free from governmental interference. 14 They also argued that the POMS violated the Due Process Clause of the Fifth Amendment. These claims appear to be without any basis in law and have not been taken seriously by the courts. 15 Indeed, as the attorneys for the plaintiffs would have been aware, the alleged right to health care freedom had already been considered and rejected in United Seniors v. Shalala where the DC district court held that [t]he Court's role here is solely to determine whether the United States Constitution confers a fundamental right on individuals to privately contract with their physicians. The Court finds that it does not. The Supreme Court has declined to extend the right to autonomous decision-making beyond certain limited contexts involving child rearing and education, family relationships, procreation, marriage, contraception and abortion.... This Court is not inclined to create new areas of constitutional protection F.Supp.2d 68 (internal citations excluded). 13 At Plaintiffs memorandum of points and authorities in opposition to defendants motion to dismiss and in support of plaintiffs motion for summary judgment. 15 Judge Kavanaugh, for example, in a footnote stated that the court had considered plaintiffs other arguments and [found] them without merit. 16 United Seniors v. Shalala, 2 F. Supp. 2d 39, 41 (D.D.C. 1998) affirmed without reaching the constitutional issue 182 F.3d 965 (DC. Cir. 1999).

5 Discussion This case is barely statable in law. This surprising thing is that is has taken up so much judicial time. Of course, one might suggest that the plaintiffs real argument should be with the insurance providers who (allegedly) restrict their coverage of health care on the basis of an entitlement which they (plaintiffs) do not wish to use. But then the providers are (assumedly) only acting in their best financial interests. Perhaps the real source of the plaintiffs woes is themselves. The lead plaintiff attorney (Kent Masterson Brown) is the author of an article entitled The Freedom to Spend Your Own Money on Medical Care. 17 In a country where health care freedom is based on the ability to pay for health care, the plaintiffs real problem seems to be that they are not rich enough to buy their freedom (or do not value health care freedom enough to pay for it). As Brown says: Only the wealthiest seniors, who can afford to opt out of the Medicare program entirely, can avoid this threat to their freedom to spend their own money on medical care. 18 The fact that the plaintiffs are apparently not amongst this elite group does not appear to give rise to a statable claim. Ironically, the problem with the US health care system is perhaps an excess of freedom. As the OECD has pointed out, Americans consumed $7,290 of health services per person in 2007, almost two-and-a-half times more than the OECD average of just under $3,000 (adjusted for the differences in prices levels in different countries). 19 This represents 16% of US Gross Domestic Product (by far the highest share in the OECD and almost double the average of 8.9% in OECD countries overall). Despite this level of spending (and notwithstanding that in some areas the US has extremely high quality health care), the US has lower life expectancy than most OECD countries (78.1; average is 79.1), and is below average on a wide range of other measures, including infant mortality, potential years of life lost, and amenable mortality (i.e. mortality that can be averted by good health care). One of the reasons for the rather unsatisfactory situation is perceived to be the structure of the US health care system. Health care reform has, of course, been on the US policy agenda for some time. Although common in European countries and advocated by some experts, a move to a single-payer system for most citizens would not seem to have significant political support. 20 Therefore, reform centers on changes to the existing mix of public insurance (Medicare), publicly supported care for those on low incomes (Medicaid) and private care (supported by health insurance) for the rest of the population. One of the difficulties in this 17 Kent Masterson Brown, The Freedom to Spend Your Own Money on Medical Care: A Common Casualty of Universal Coverage, Policy Analysis no. 601 (2007). 18 Op cit. at OECD Economic Survey of the United States 2008: Health Care Reform. Paris: OECD. See also Carey, D. B. Herring and P. Lenain, Health Care Reform in the United States, Paris: OECD. 20 Blake, C.H. and J.R. Adolino The Enactment of National Health Insurance: a Boolean Analysis of Twenty Advanced Industrial Countries. Journal of Health Politics, Policy and Law, 26: ; Gordon, C Dead on Arrival: The Politics of Health Care in Twentieth-Century America. Princeton, NJ: Princeton University Press; Gottschalk, M Show Me the Money : Labor and the Bottom Line of National Health Insurance. Dissent at

6 area is that research shows that about 17 per cent of the population (about 50 million people) had no health insurance in As one might expect, noninsurance is related to income with over one-quarter of those with an income of below $25,000 having no insurance. However, non-insurance is by no means confined to the low income and even amongst those earning over $75,000 per annum, almost one-one-in-ten (9 per cent) or 10 million people had no health insurance. The lack of comprehensive cover means that persons may have difficulty in paying for the own health needs. In this context, In this context, the fact that almost all older people (over 65) are insured with Medicare is an important positive factor. One might assume that Congress felt that it was desirable (both to ensure maximum insurance coverage and for reasons of administrative efficiency) to legislate for mandatory coverage for seniors claiming pensions. 21 One might note that the OECD has proposed further increasing insurance coverage to certain target groups through an extension of Medicaid or Medicare; 22 and that a recent study sees this approach as complementary to expanded private insurance cover (the subject, of course, of the PPACA litigation). 23 From the perspective of political science the ongoing health care litigation (of which Hall v Sebelius is a rather peripheral part) might tend to re-establish a view of the United States as a nation of courts and parties. 24 It again emphasizes the role of institutions in US social policy and the importance of veto-points in particular the courts - in the US system of governance. 25 But, as Steinmo and Watts have highlighted, institutional barriers are not somehow accident or neutral in their distributional effect. 26 Rather, as they emphasize, the fragmented and federated national political system in the United States yields enormous power to intransigent interest groups, which in turn makes large-scale policy changes such as health reform difficult, if not impossible. 21 The Social Security Administration estimated that the administrative costs of creating a system to allow for plaintiffs and those similarly situated to enroll or disenroll would exceed $100 million. 22 OECD, Economic Survey of the United States. Paris: OECD. 23 Carey, D. B. Herring and P. Lenain, Health Care Reform in the United States, Paris: OECD. 24 Skowronek, S. L Building a New American State: The Expansion of National Administrative Capacities. New York: Cambridge University Press 25 Blake, C.H. and J.R. Adolino The Enactment of National Health Insurance: a Boolean Analysis of Twenty Advanced Industrial Countries. Journal of Health Politics, Policy and Law, 26: Steimo S. and J. Watts It's the Institutions, Stupid! Why Comprehensive National Health Insurance Always Fails in America. Journal of Health Politics, Policy and Law, 20: