Social Security Without Medicare?

From the Washington Examiner:

A federal judge has cleared the way for consideration of a class-action lawsuit in which plaintiffs - including former House Majority Leader Dick Armey - are asking for a ruling upholding an existing law that declares participation in Medicare and Social Security to be voluntary, not compulsory.

According to Allison Bell, a reporter for National Underwriter, an insurance industry trade publication, U.S. District Court Judge Rosemary Collyer rejected a motion to dismiss the suit by Secretary of Health and Human Services (HHS) Secretary Kathleen Sebelius, and Michael Asture, Commissioner of the Social Security Administration (SSA).

The case is Hall v Sebellius. It stems from an HHS operations manual that requires people opting out of Medicare to also lose their Social Security benefits. The plaintiffs are being assisted with their suit by the Fund for Personal Liberty, a libertarian oriented Washington-state think tank.

"The plaintiffs claim that the operations manual Medicare mandate rules violate a statute that makes enrollment in Medicare and Social Security voluntary. All of the plaintiffs say they want to stay out of Medicare because they believe it is an inferior system and have concerns about its finances, and three of the plaintiffs would be eligible for other, better health benefits programs if they did not have to sign up for Medicare," according to Bell.

Officials at HHS and SSA officials contend their manual accurately reflects the intent of Congress when it created Medicare and Social Security to cover all Americans.Collyer appears to have rejected that interpretation, however. You can read her ruling here. If the plaintiffs win, the federal government will no doubt appeal it all the way to the U.S. Supreme Court.

And it is far from inconceivable that the present Congress would pass a new law explicitly requiring forfeiture of benefits when opting out of Medicare,

AARP Supports Special $250 Payments

A press release from the American Association of Retired Persons (AARP):

With an expected announcement of no Social Security cost of living adjustment (COLA) in 2010, AARP CEO Barry Rand called on House and Senate leaders to provide $250 in emergency relief to millions of older Americans who are struggling in this economic climate. AARP will work with members of Congress from both sides of the aisle to urge quick passage of legislation that will help combat rising health care and prescription drug costs that consume an increasing amount of seniors’ income each year.

Claims Surge

From Bloomberg:

Applications for Social Security benefits rose almost 50 percent more than expected this year because of the recession, according to the federal retirement program.

“We are seeing a significant increase in both retirement and disability applications as a result of the recession,” said Mark Lassiter, a Social Security spokesman. ...

The Social Security Administration had projected an increase of 315,000 applicants for the 12 months ending Sept. 30 partly because the first baby boomers -- those born right after World War II -- are starting to retire.

The actual increase was higher. Agency statistics show that 2.57 million people requested benefits, up from the 2.10 million applications received during the previous 12 months. That’s an increase of 465,000, or 47 percent higher than the expected rise.

Many people with disabilities who had previously been able to work sought Social Security payments because they lost their jobs, said Paul Van de Water, a former Social Security Administration policy official. He is now a senior fellow at the Center for Budget and Policy Priorities, a Washington research group....

Workloads Deferred -- Overpayments And Underpayments Result

From a recent report by Social Security's Office of Inspector General:

... [I]n some cases, retired beneficiaries may continue to work while receiving Social Security benefits. In those instances, Title II of the Social Security Act (Act) requires that SSA use an Annual Earnings Test (AET) to measure the extent of beneficiaries' retirement and determine the amount, if any, to be deducted from their monthly benefits. ...

To ensure compliance with the AET provisions, SSA compares beneficiaries’ reported earnings that are recorded on SSA’s Master Beneficiary Record (MBR) with earnings that were reported by employers that are recorded on SSA’s Master Earnings File (MEF). This process, called the Earnings Enforcement Operation (EEO), is designed to detect over- or underpayments that may have occurred during the year.

Our 2007 audit of the AET disclosed SSA had not adjusted the benefit payments of all beneficiaries who were identified by the EEO. As a result, SSA overpaid about $313 million to 89,300 beneficiaries and underpaid about $35 million to 12,800 beneficiaries for Calendar Years (CY) 2002 through 2004. In addition, we found SSA had not processed approximately 2.1 million of the 2.5 million Earnings Enforcement selections for CYs 1996 through 2005.

Baucus On Reduction Of Backlog

A press release from Senator Max Baucus, the Chairman of the Senate Finance Committee, which has jurisdiction over the Social Security Administration:

To: Reporters and Editors

From: Dan Virkstis for Senate Finance Committee Chairman Max Baucus (D-Mont.)

Re: Baucus Statement on Reduction in Social Security Administration Disability Hearings Backlog

Senator Max Baucus issued the following statement today on news the Social Security Administration (SSA) reduced its backlog of disability hearings nationwide. The agency reported that, for the first time since 1999, SSA has ended the year with fewer pending disability hearings than in the prior year. Social Security ended fiscal year (FY) 2009 with 722,822 hearings pending, compared to 760,813 hearings pending at the start of the fiscal year, a reduction of more than 37,000 cases. SSA also made clear these reductions would have been larger if not for the increase in applications for disability benefits due to the recession. In addition, the average processing time for these cases improved from 514 days in FY 2008 to 491 in FY 2009.

“This announcement shows SSA has taken a good first step in its effort to reduce the huge number of backlogs of disability hearings. I am pleased with this progress but expect an aggressive path forward so disabled Americans, including veterans, are provided the service and benefits they need and deserve in a timely fashion,” said Baucus. “I urged Social Security Commissioner Astrue, at his confirmation hearing, to make reducing the disability backlog his top priority, and though much work remains to be done, I commend the Office of Disability Adjudication and Review and other offices at SSA for their hard work and commitment to this important goal.”

In May of last year, the Finance Committee held a hearing to examine service delivery to the public in Social Security’s field offices. Among the issues discussed was the fact that many applicants to the Social Security Disability Insurance (SSDI) program and the disability portion of the Supplemental Security Income (SSI) program face significant delays before receiving benefits. Total waiting times can exceed three years in some cases. Such delays create serious or desperate financial situations for applicants and their families. The largest contributors to these delays are the waiting times for disability appeals hearings.

Decreasing disability hearings backlogs and improving service to the public in SSA’s field offices require adequate funding for SSA’S administrative costs. In July of this year, Baucus applauded the Senate Appropriations Committee for including in their FY 2010 funding bill the President’s request of approximately $11.4 billion for SSA’s administrative expenses.

Three New Listings Proposals Filed With OMB

Social Security and all other agencies must obtain approval from the Office of Management and Budget (OMB), which is part of the White House, before posting any proposed regulations in the Federal Register. Social Security has just filed three regulatory proposals with OMB. These are for skin disorders, genitourinary disorders and for impairments affecting multiple body systems. The skin disorders filing is only an advanced notice of rulemaking that allows the public to comment but which does not reveal any plans that Social Security may have. Probably, the other two are similar, but OMB has not posted enough information to say.

Continuing Resolution Passed

In case you were worried -- and there was no reason to worry -- Congress has passed and the President will sign a continuing funding resolution to keep the federal government operating in the new fiscal year, which begins on October 1. Congress still needs to pass an appropriation for Social Security.

Cert Granted For EAJA Case

The Supreme Court has granted a writ of certiorari in the case of Astrue v. Ratliff. This means that the Supreme Court will hear the case. The issue is "Whether an 'award of fees and other expenses' under the Equal Access to Justice Act, is payable to the 'prevailing party' rather than to the prevailing party’s attorney, and therefore is subject to an offset for a pre-existing debt owed by the prevailing party to the United States."