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MEDICARE VOTE A SPECTACULAR VICTORY
IN PRO-LIFE FIGHT AGAINST RATIONING After a decade of pro-life efforts to obtain protections against health-care rationing in Medicare, President George W. Bush December 8 signed into law a major bill reforming Medicare and adding prescription drug coverage to the government health insurance program for older Americans. The final version of the bill incorporated virtually all of the provisions the National Right to Committee had sought. As reported by the conference committee and then passed by the House and the Senate, the Medicare bill empowers older Americans to avoid involuntary denial of life-saving treatment by giving them the option, if they wish, of adding their own money on top of the government contribution in order to get health insurance that does not ration life-saving medical treatment. This option, styled “private fee-for-service,” is available both for the “core” Medicare benefit covering hospitalization and physician services and for the new prescription drug benefit. Most critically, the bill ensures that Medicare bureaucrats cannot impose rationing-causing price controls on those senior citizens who choose this option. The bill contains an important clarification providing that when private fee-for-service plans use networks they can vary cost-sharing between in- and out- of network providers. The practical effect of this provision is that the ability of senior citizens to add their own money in order to get plans less likely to ration life-saving treatment, without any limitation from price controls, applies not only to traditional indemnity plans but also to the currently much more prevalent “preferred provider” plans and, indeed, to most managed care plans. The significance of the bill is profound. It will make possible the saving of literally millions of lives of senior citizens in the future, especially during the critical decades following the retirement of the “baby boom” generation. We have long recognized the economic reality that in order to provide baby-boomers Medicare coverage without massive tax increases (which are highly improbable), government payments per beneficiary will not be able to keep up with medical inflation. If the funds available for health care for senior citizens from all sources had been limited to only those from government Medicare, the only possible result would have been massive and increasing rationing. Since senior citizens are required to participate in Medicare, this would have amounted to government-imposed involuntary euthanasia. Under the Medicare bill just signed into law by President Bush, however, senior citizens will be able use their own money to save their own lives. They will be legally able to choose from a broad spectrum of types of plans, adding their own money to the government contribution in order to pay the premiums. While senior citizens rely on their social security benefits, few expect them to cover all of their living expenses in retirement. They recognize the need to supplement the government benefits from other sources: private pension, 401(k) plans and IRA’s, and other savings and income. In the same way, future retirees will be able to use their own savings and other income to cover a portion of the cost of their health insurance. The new legislation also fosters the ability to do so by creating “Health Savings Accounts” which, among other features, allow people to put aside tax-sheltered money for future health care expenses in retirement. Of course no one likes to pay more for anything, including health insurance. But there is an old joke that helps put the matter in perspective. A robber, pulling a gun on a victim, says, “Your money or your life!” The victim replies, “Take my life; I’m saving my money for my old age.” The point, of course, is that there is little point in skimping on paying for what is necessary to save your life if the consequence is that you are not around to enjoy the financial fruits of your misguided frugality. Moreover – while there are important individual exceptions – Americans as a whole can afford to obtain unrationed health care. It has become fashionable to deplore the “rising cost” of health care. What too few people appreciate is that: 1) Adjusted for inflation, the cost of health care per year of life saved has actually been falling; what has been happening is that we are devoting a rising proportion of our resources to health care with resulting large increases in longevity and better health. In other words, we are not paying more for the same level of health care, but somewhat more for a much higher level of health care. 2) We have been able to devote more resources to health care because rising productivity in other areas has freed up those resources. For example, over the past 60 years, the proportion of personal consumption expenditures needed to feed us has gradually but dramatically increased. However, if for each of those 60 years you add the proportion of personal consumption expenditures for health care (which has generally been rising annually) to that for food (which has generally been falling annually), you find that the combined total has remained virtually constant over the 60-year period. This means that what Americans have saved in the cost of food, due to increased agricultural productivity, has alone covered the cost of the increases in our resources devoted to health care. In short, we shouldn’t bemoan the fact that we are spending more and more on health care – we should be grateful that our country’s tremendous productivity enables us to spend more and more to save lives and improve health! Until now, however, misguided if well-intentioned government policies had placed artificial limits on what senior citizens were permitted to spend for health insurance by tying it to what government was willing and able to pay for Medicare. By largely eliminating those limits for those who in the future will be wise enough to choose the private fee-for-service option, however, the Medicare bill just signed has lifted the life-threatening tyranny of government-imposed rationing from senior citizens for decades – and perhaps centuries – to come. Truly, as we enter the holiday season, the pro-life movement’s victory in largely eliminating rationing from Medicare, and thus saving the lives of countless generations of future senior citizens, gives us much occasion for rejoicing and thanksgiving. UNDERSTANDING THE DIFFERENT TYPES OF HEALTH INSURANCE PLANS Indemnity or “fee-for-service” Under this traditional, but increasingly rare, form of health insurance, you are free to choose whatever doctor, hospital, or other health care provider you wish. The doctor and patient together agree on what tests or treatments the patient should have, and the doctor submits the bill to the insurance company, which then pays the agreed portion of the bill as long as it comports with “usual and customary” fees. Preferred Provider Organization (PPO) Under this approach, the health insurance company negotiates rates of pay for tests and treatments with a “network” of doctors, hospitals and other health care providers. Patients insured under this arrangement are free to go to doctors and providers outside the network, but each time they do so they pay a higher rate of “co-insurance” – the amount toward the provider’s fee that is not covered by insurance but directly paid by the patient. Managed Care This term covers a wide variety of insurance plan types whose common element is that in order to reduce costs the insurance company exercises various means of control over what tests and treatments the patient is permitted to receive. Examples: -- restricting the drugs that can normally be prescribed to those in a “formulary” often consisting of the least expensive (but not necessarily most effective) drugs; --requiring doctors to submit to “utilization review” under which insurance company bureaucrats can reject requests for treatment; and – paying doctors and hospitals through formulas that create financial disincentives for treatment. A SHORT HISTORY OF THE PRO-LIFE MOVEMENT’S FIGHT AGAINST HEALTH CARE RATIONING Since its inception, the pro-life movement has fought just as hard to safeguard the lives of the vulnerable elderly and people with disabilities from euthanasia as to protect the lives of the unborn from abortion. We have long recognized that government-imposed rationing of medical treatment necessary to save life is a form of involuntary euthanasia. It was for this reason that the pro-life movement played a key role in 1993 and 1994 in defeating the Clinton plan for national health insurance, which would have imposed “premium caps” to limit every American’s ability to pay for unrationed health care. These limits would have resulted in the denial of lifesaving treatment in circumstances in which, in the words of then-First-Lady (and current Senator) Hillary Clinton, it is “not appropriate--will not enhance or save the quality of life.” In 1995, when a major Medicare reform bill was before Congress, the National Right to Life Committee fought hard to change Medicare’s prohibition on senior citizens’ adding their own money so as to get the core Medicare benefits without rationing. In the end, we were unsuccessful, but fortunately the Congressionally-passed bill was vetoed (for other reasons). Then in 1997 we succeeded in creating an option in Medicare under which senior citizens could choose to add their own money, on top of the limited government payment, in order to select indemnity health insurance plans that are less likely to deny needed life-saving treatment – called ‘private fee-for-service’ plans. The 2003 Medicare bill just signed effectively expands that ability to cover not just indemnity but also “preferred provider” and most types of managed care plans. The ability also applies to the new prescription drug benefit.
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