Sen. Jim DeMint’s Retirement Freedom Act would decouple SS and Medicare

Sen. Jim DeMint and 12 Republican colleagues yesterday introduced the Retirement Freedom Act, which would allow seniors to voluntarily opt out of Medicare while still collecting Social Security payments.

Apparently, thanks to rules issued by the Social Security Administration (rules issued without the benefit of public comment!), seniors’ Social Security benefits are presently handcuffed to Medicare Part A enrollment. That — even though the Social Security Act and Medicare Act both state that enrollment in the entitlement programs should be voluntary. The Retirement Freedom Act would restore the voluntary nature of enrollment in these two programs.

“American seniors should have the freedom to make their own choice about health care without Uncle Sam threatening to take away their Social Security checks,” DeMint said in a news release. “These two programs have been unnecessarily tied together by unaccountable bureaucrats without the consent of the people or their elected officials. Today, if a senior can afford private insurance and chooses to not accept Medicare, they are forced to give up their Social Security benefits. This is not right and it must change.”

In the short term, the Act will likely save taxpayer dollars. If just 1 percent of eligible seniors opted out, the RFA would immediately save Medicare $1.5 billion. But perhaps even more importantly, in the long-term, the Act will grant seniors more choice. As those seniors who can afford it opt out, incentives to provide private insurance will arise.

In light of the straits Medicare currently faces, the Act comes at a particularly appropriate time. According to the American Medical Association, about one in five physicians overall (17 percent) are restricting the amount of Medicare patients in their practice because their reimbursements rates keep getting cut. The number is even higher among primary care physicians, where nearly one-third (31 percent) restrict the number of Medicare patients they see. Seniors shouldn’t have to automatically enroll in such a struggling program just to be able to receive Social Security benefits.

At the same time, they should have the freedom to enroll, if they so choose. Importantly, the RFA preserves both freedoms. It allows seniors who have opted out of the program to opt back in without incurring a penalty.

The link between Social Security payouts and Medicare Part A enrollment has been challenged in court, as well. In Hall v. Sebelius, the plaintiffs argued the government has no right to withhold Social Security benefits on condition of Medicare enrollment. But the court essentially held Medicare is not merely an entitlement; it’s also a requirement. The RFA would rectify that ruling.

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