Quick background: Under existing rules, if one elects not to be covered by Medicare, one is also ineligible for Social Security benefits. For more detail, click here. When last we left our intrepid heroes, lead attorney Kent Brown and company were waiting for Judge Rosemary Collyer to determine whether to grant the gummint's request to have his case thrown out. In fact, Judge Collyer's decision dealt quite a blow to HHS Secretary Kathleen Sebelius and her minions, because the case can now proceed "on the merits." This is all the more surprising when one considers the resources of the federal government compared to private litigators, and perhaps bodes ill for the government's case in general.
Mr Brown was kind enough to spend some time with me this morning, explaining what happened and why it's important, and we also speculated on the possible implications of this case on other federal agencies' procedures and rules.
The issue boiled down to the concept of "exhaustion." Generally, if one has a beef with an agency's decision, there are specific steps one must take to give that agency a chance to reconsider. This can be an expensive and lengthy process, with no guarantee that the decision will be changed or reversed. But the law requires one to at least try. Only after all of possible efforts have been made - and rejected - can one seek relief in the courts.
Mr Brown told me that, "in the arena of administrative law, this is huge;" it's very rare for a court to "excuse exhaustion." Usually, the courts will toss it back in the plaintiff's lap, until all the administrative avenues have been tried ("exhausted"). In this case, however, Judge Collyer explicitly acknowledged that this would have been futile. Mr Brown based his appeal to her on a case from New York which had significant similarities to his own, and which had shown that exceptions to the "exhaustion rule" could, in fact, be made. In an interesting twist, his case paralleled a similar one which had been making its way through the courts about the same time. In that case, which was decided this past April, Judge Collyer had sided with the agency, saying that those plaintiffs would have to go the "exhaustion" route. I asked Mr Brown why two such similar cases, in content and timing, could be decided so differently, and he replied that "judges are human, too." In that case, it was her opinion that the exhaustion process was appropriate. Different case, different outcome. In this case, though, the key was that (and this is a bombshell) the agency was acting contrary to the law.
That last bears repeating: as we noted in our previous post, "(t)his came about not by statute, but by bureaucratic fiat." That is, the Social Security Administration's Program Operations Manual (POM) specifically penalized folks who chose not to use the Medicare system for health care, by denying them their fully earned Social Security benefits.
The judge went further than just denying the feds' request, though: she explains that these POM's are not supported by the statute. In short, they're making their own law (which is a no-no).
So what does this mean?
Well, for the plaintiffs specifically, it certainly augers well for their case. As Mr Brown explained, this ruling gave them "standing;" that is, they were right not to go through the hassles of the exhaustion process because it would have "been futile." In fact, it appears that, in this instance, the government itself has actually violated federal law. It's rather like the DMV promulgating a rule that speeding is okay, despite the fact that the actual, you know, law says that it's not.
I asked Mr Brown if this would be similar to Social Security Disability cases, where once one is approved there's a lump-sum payment covering the processing period. He replied that this was not the case here, that they're looking only to recoup their expenses, "not a dime more." He's looking forward to another consequence: the voiding of the offending POM's. And he points out that this would itself have far-reaching implications: how many other agencies are playing the same kind of game with the law, and which one is next in line for a correction?
He also thinks this would have a positive effect on the future of Medicare itself. How many other folks would follow his clients' example and opt out of Medicare, saving the program perhaps millions of dollars? We obviously don't know, but given the size of the current (and soon swelling) Medicare population, even a small percentage could represent big dollars.
Once again, we are indebted to Mr Kent Masterson Brown for his time, expertise and patience. The decision itself is available here. [Hat Tip: reader Scott M]
