Employees Cannot Opt Out of Medicare Part A Without Also Rejecting Social Security Benefits

The U.S. Court of Appeals for the D.C. Circuit has upheld a lower court ruling (Hall v Sebelius; see the Alert of 8/11/11) that individuals over age 65 cannot opt out of Medicare Part A coverage if they want to receive their Social Security payments.

Several employees, who were receiving Social Security benefits, sued on the grounds that they suffered harm due to the Medicare Part A coverage because private insurers reduce the benefits they can receive once they become covered by Medicare Part A. They said they wanted to receive the benefits they would be entitled to under their employer’s group health plan.

The Appeals Court found that the law provides that individuals over age 65 are automatically covered by Medicare Part A when they are covered by Social Security benefits. While recognizing that the law permits a person to reject Medicare Part A, the Court concluded that such a rejection can only flow from a refusal to seek Social Security benefits, because the law does not permit an individual to reject the Medicare Part A coverage unless they also opt not to receive Social Security payments.