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Health Freedom Watch
May 2006


Legislation Introduced to Digitize Federal Employee Health Records

Reps. Jon Porter (R-Nev.) and Lacy Clay (D-Mo.) have introduced legislation to convert federal employee health records to electronic files. The bill (H.R. 4859) would affect some eight million persons enrolled in the Federal Employees Health Benefits Program.


According to Porter, the goal of the legislation is to reduce medical errors, improve the quality of health care, and cut costs. But it would have the serious unintended consequence of eroding employees' privacy.  That's because it would require compliance with the Health Insurance Portability and Accountability Act (HIPAA), which eliminated the freedom to forbid the sharing of one's health information with some 600,000 entities.


A representative of the Government Accountability Office (GAO) testified on H.R. 4589, noting that "According to the Office of Personnel Management, it is planning to use its position as one of the largest purchasers of employee health care benefits to contribute to the expansion and use of electronic health records, electronic prescribing, and other health IT-related provisions."  It's clear from the GAO testimony that the move to computerize federal employees' health records is part of the larger goal of establishing a national health-information infrastructure.  Also, the GAO reported that grants from the U.S. Department of Health and Human Services to implement such a system included an $11.5 million grant in September 2005 "to assess and develop plans to address variations in organization-level business policies and state laws that affect privacy and security practices, including those related to HIPAA, which may pose challenges to interoperable health information exchange." (Emphasis added.)  State medical-privacy laws that are much more stringent than the federal privacy rule stand in the way of the national infrastructure. Thus those working to establish the new system would need to eliminate the state laws that impede their effort to distribute patient data electronically without consent.


Many members of Congress and their staffs seem to be insufficiently aware that the federal privacy rule reduces the freedom to control access to personal health information (because it eliminates the need for patient consent).  Until the consent requirement is fully restored, any proposal to computerize health records is a recipe for increasing the nonconsensual distribution of such information, and therefore for increasing privacy invasions.



  • To read the complete bill text of H.R. 4859, visit the congressional legislative database and search for bill number H.R. 4859.
  • Hearing on Improving the Quality and Delivery of Health Care within the FEHBP, Subcommittee on Federal Workforce and Agency Organization, Committee on Government Reform, House of Representatives, March 15, 2006.
  • "Health Information Technology: HHS is Continuing Efforts to Define a National Strategy," GAO Testimony Before the Subcommittee on Federal Workforce and Agency Organization, Committee on Government Reform, House of Representatives, March 15, 2006.

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Congress Set to Override State Medical-Privacy Rights
By Twila Brase

On May 24, the U.S. House Ways and Means Subcommittee on Health voted 8-5 to approve a bill (H.R. 4157) that will likely be used to override your state medical-privacy rights.  The sponsor of the bill is Republican Nancy Johnson from Connecticut.


The legislation empowers unelected bureaucrats from the U.S. Department of Health and Human Services (HHS) to decide how much or how little privacy you can have.


If HHS decides to override your state medical-privacy rights, no state law or state lawmaker will be able to protect you from the politics of the Washington D.C. beltway and the lobbyists of health plans, government, and data corporations who want your private data at no cost and at their own discretion. Remember, these are the same folks who wrote the federal HIPAA "no privacy" rule that today lets health plans, law enforcement, public health officials and others access your entire medical record without your knowledge or consent UNLESS state law says otherwise.


This bill will allow HHS to prohibit your elected state representatives from writing strong medical privacy laws. Since it is going to become increasingly easy to share your health information electronically, our laws should be modernized to provide stronger-not weaker-privacy rights to meet citizens' demands for privacy in the information age.  The bottom line is that unless legislation states clearly that you have the legal right to give or withhold your consent before your personal health information is accessed or shared, it cannot be considered a real privacy bill.


Note: To voice your own opinion on H.R. 4157, the Capitol Hill main phone number is (202) 225-3121.


Twila Brase, RN, is president of Citizens' Council on Health Care in St. Paul, MN (

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Medicare Costs Projected to More than Double in Next 10 Years

The federal government released its annual report of the Medicare Trustees on May 1.  Following are important facts and issues worth noting: 


         Total expenditures amounted to $336 billion in 2005 (up from $184 billion in 1995) and are projected to more than double to $817 billion by 2015.


         Spending per beneficiary was approximately $8,052 in 2005 (up from about $4,953 per beneficiary in 1995) and is projected to grow to $16,305 in 2015. 


         The program covered nearly 43 million people in 2005 (35.8 million seniors and 6.7 million disabled persons), up from about 38 million in 1995.  Enrollment is projected to grow to more than 53 million by 2015.


         The percentage of beneficiaries enrolled in managed-care plans was 13 percent in 2005 (up from 10.3 percent in 1996) and is projected to expand to 31.7 percent in 2015.  This increase would be a result of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), which gives higher payments to managed-care plans.


         The Medicare Hospital Insurance Trust Fund (Part A) is projected to be exhausted by 2018, two years sooner than last year's forecast.


The nonpartisan Concord Coalition stated that "Medicare's finances are in even deeper disarray than Social Security.  According to the Medicare Trustees report, the hospital trust fund that finances Part A expenditures is already running cash deficits and will require ever-increasing infusions of general tax revenues to stay afloat.  By 2020 Medicare will require general revenue contributions equal to 25% of individual income taxes in addition to premiums and payroll taxes dedicated to Medicare." 


Additionally, Richard Foster, the chief actuary of the Centers for Medicare & Medicaid Services, notes in the Trustees report that the Medicare Part B [doctor-payment program] projections are unreasonable.  For them to be reasonable, he writes, physician fees would have to be reduced 37 percent over the next nine years, "an implausible result."


The Trustees report concludes that total Medicare spending is expected to increase faster than either workers' earnings or the economy overall.  Thus, this issue needs to be resolved soon:



  • 2006 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, May 1, 2006.
  • "Concord Coalition Warns Tough Choices Must Be Made on Entitlement Program," Concord Coalition press release, May 1, 2006.

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Health Freedom Watch is published by the Insitute for Health Freedom. Editor: Sue Blevins; Assistant Editor: Deborah Grady. Copyright 2006 Institute for Health Freedom.