Thursday, March 25, 2010

Bunning Amendment (#3681) on Medicare Opt-Out

Senator Bunning has offered an amendment (#3681) regarding Medicare opt-out.  
  • The amendment requires the Social Security Administration and the Centers for Medicare and Medicaid Services to develop a process to allow individuals to opt out of the Medicare Part A benefit.  The amendment does NOT permit individuals to opt out of paying Medicare taxes.
  • Under current law, individuals are automatically enrolled in Medicare Part A upon applying for Social Security – they CANNOT opt out of the Medicare program unless they are willing to forego Social Security benefits entirely. (Medicare Parts B and D are purely voluntary.)
  • Individuals with Health Savings Accounts (HSAs) are prohibited by law from contributing additional funds to their HSA upon becoming eligible for Medicare.  Thus individuals with HSAs effectively lose their current coverage upon turning 65, because the federal government forces them into Medicare as a condition of their application for Social Security benefits.
  • Several individuals have filed a lawsuit, Hall v. Sebelius, designed to remedy this problem by requiring Social Security to develop an opt out process; however, the Administration continues to challenge the lawsuit.
Arguments in Favor
  • The Medicare trustees project that the Hospital Insurance Trust Fund will be exhausted by 2017, and that the program faces a total of $37.8 trillion in unfunded liabilities over 75 years, and $88.9 trillion in unfunded liabilities over the infinite horizon.
  • If people want to opt out of the program – thus saving the federal government from additional unfunded liabilities – we should let them.
  • This amendment could save the federal government billions of dollars annually by allowing individuals to keep their current coverage rather than being forced on to the Medicare rolls as a condition of accepting Social Security benefits.
  • President Obama’s campaign promises of “If you like your current plan, you can keep it” ring hollow to some Americans with HSAs, who are currently being forced into a government-run health plan upon turning age 65.  This amendment would allow the Americans who have – and like – their current coverage to keep it.