Forced Payment


A law intended to give elderly Americans more medical choices may instead end up placing all senior citizens' health care under government control.

At issue is Section 4507 in the Taxpayers Relief Act of 1997, which requires physicians to forgo any Medicare reimbursements for two years if they accept cash payments from Medicare enrollees for services covered by Medicare.

The provision was originally intended to increase health care options for seniors by letting them pay doctors directly for services covered by Medicare as long as their physicians didn't bill the government. But congressional defenders of the current system, encouraged by the White House, added the two-year prohibition on reimbursement, fearing that letting some seniors opt out of Medicare could eventually lead to a two-tiered system in which the affluent receive better health care.

Senior citizens' activists became alarmed because Section 4507 defines a Medicare beneficiary as "an individual who is entitled to benefits under part A or enrolled under part B." Taken literally, this law makes all senior citizens Medicare beneficiaries, since everyone older than 65 is "entitled" to part A, which covers hospital stays. (Seniors have the option of enrolling in part B, which pays for doctors visits.) The provision could effectively prohibit seniors from paying for any health care out of pocket whether or not they enroll in part B, since few doctors who treat seniors are willing to surrender all their Medicare reimbursements.

United Seniors Association, a senior citizen advocacy group, filed suit in federal court seeking a preliminary injunction of the statute in December 1997. On April 14, U.S. District Court Judge Thomas Hogan refused to issue the injunction, making the provocative ruling that the U.S. Constitution does not confer "a fundamental right on individuals to privately contract with their physicians." That decision is being appealed.

For now, the Health Care Finance Administration, which runs Medicare, says Section 4507 applies only to those who choose to enroll in part B, so seniors can still opt out of the government system. But HCFA could reconsider at any time. Barring a successful appeal, America's seniors (if not the public at large) may well see their ability to reliably purchase health care services on the private market disappear.