By Burke J. Balch, J.D., Director,
NRLC's Robert Powell Center for Medical Ethics
After a decade of pro-life efforts to obtain protections against health care rationing in Medicare, on December 8 President George W. Bush 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 lifesaving 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 lifesaving 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. It provides 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 senior citizens are able to add their own money in order to get plans less likely to ration lifesaving treatment, without any limitation from price controls. This 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 to 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 these 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 IRAs, and other savings and income. In the same way, future retirees will be able to use their own savings and other income to add to government Medicare payments. The new legislation fosters the ability to do so by creating "Health Savings Accounts." Among other features, these accounts 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 sense 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 decreased. 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, alone has 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, 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.