The Right of Seniors to Add Their Own Money to Save Their Own Lives Preserved

NRL News
Page 4
July 2008
Volume 35
Issue 7-8


Despite significant changes to the Medicare Advantage Program

BY Jennifer Popik, J.D.

Medicare is the U.S. government’s health insurance program for all people 65 and over. Seniors can either choose to be on “Traditional Medicare” or to enroll in “Medicare Advantage,” which allows them to receive their Medicare benefits through private health insurance plans.

As a result of National Right to Life-supported legislative changes in 1997 and 2003, there now exists an option within Medicare Advantage known as “private fee-for-service [PFFS] plans.” Under PFFS plans senior citizens can choose health insurance whose value is not limited by what the government may pay toward it.

On July 16, both Houses of Congress overrode a veto by President Bush and the  Medicare Improvements for Patients and Providers Act of 2008 became law.

The Senate had passed the measure on July 9 with a veto proof margin of 69-30. The bill was identical to the one passed in the House by 355–49 several weeks earlier. While it makes substantial changes to the PFFS alternative within Medicare Advantage, it retains the right of older Americans to add their own money so as to get insurance less likely to ration lifesaving treatment. Most critically, these plans provide that government officials cannot impose price controls which lead to rationing.

Currently, the PFFS plans operate as indemnity plans within Medicare Advantage. This means that the plan’s administrator need not make contracts with doctors because doctors who take Medicare patients generally will accept the insurance. The plans are automatically “deemed” to have enough medical providers.

However, under the new law, there will be changes, beginning in 2011, in areas that have two or more “network insurance plan” choices for seniors (basically the non-rural areas). These PFFS plans will be able to continue to exist, but in a modified way.

The plans will no longer automatically be “deemed” to have enough doctors. They will have to provide evidence that enough health care providers in the area are willing to serve plan members to meet seniors’ needs.

Although this is a dramatic change to the PFFS plans, it will still allow seniors, if they choose, to add their own money to have access to insurance that is less likely to ration treatment.

This change to PFFS was instigated by two major factors. First, some critics claimed that many seniors switched to the PFFS plans, believing incorrectly that they would be able to see every doctor who took Medicare.

Some people were, in fact, unable to see their preferred physician. But that was likely due to confusion on the part of doctor’s offices (probably because the PFFS plans were new), and/or a result of the fact that many doctors do not want to increase their load of Medicare patients.

Second, doctors who see patients under the Medicare program currently receive payments that do not cover the full value of the service they provide. Each year, Congress needs to appropriate money to make sure this amount does not fall so low that doctors stop seeing Medicare patients altogether. The changes to PFFS plans were also spurred by a desire to find funds to limit the size of the cut in Medicare payments doctors will receive next year.

PFFS plans have been targeted for elimination since the day of their enactment in 1997. Some in Congress believe that seniors should not be free to add their own money, if they choose, as this will unfairly disadvantage the poor.

But this will cause greater harm to the very group whose interests it is supposed to protect—those who are poor. When people are permitted to spend their own money for health insurance, and those who can afford it select the more expensive unrationed, unmanaged PFFS plans, this adds money to the system. Part of that extra money becomes available for private-sector cost-shifting to help meet the needs of the poor.

The Medicare Improvements for Patients and Providers Act of 2008 originally contained a technical quality-reporting requirement for all Medicare Advantage plans that would have had the effect of making it impossible to have “out of network” providers.

However, National Right to Life succeeded in obtaining last-minute changes to what otherwise would have been an impossible burden on the PFFS plans. Thanks to those changes PFFS plans will be able to continue to operate in spite of these quality-reporting requirements.

Although the PFFS alternative will have to make substantial changes, the right of older Americans to add their own money so as to get insurance less likely to ration lifesaving treatment still remains. Even so, pro-lifers need to remain vigilant for any changes to Medicare law that create price controls or limit what seniors can spend to save their own life.