Should Americans be allowed to spend their own money to save their own lives? Rationing in the Senate and House health care bills

Although there has been much discussion of the Medicare cuts in the Senate and House heath care bills, little notice has been taken of provisions in both that would effectively empower the Health and Human Services Department to deny senior citizens the right they currently have to add their own money on top of the government Medicare contribution in order to get insurance less likely to ration health care.  In practice, this means limiting older Americans’ ability to spend their own money to save their own lives.

Both Section 3209 of the Senate’s Reid Substitute and Section 1175 of the bill passed by the House indirectly amend the section in existing law that allows private fee-for-service Medicare Advantage (MA) plans to set their premiums without interference by the Centers for Medicare and Medicaid Services (CMS) to add, “Nothing in this section shall be construed as requiring the Secretary to accept any or every bid submitted by an MA organization under this subsection.” This allows CMS, at its absolute and unlimited discretion,  to refuse to allow private-fee-for-service plans that charge premiums adequate to avoid rationing treatment to be offered– or, literally, allows CMS to ban private-fee-for-service plans (or any other MA plans) altogether, without having to base its decision on any statutory or regulatory standard.

Similarly, both bills, instead of allowing American consumers themselves to balance benefit and cost in choosing what health plans to be purchased in the new insurance exchange that would be set up (nationally under the House bill, and separately in each state under the Senate bill ) would authorize the exchange to exclude plans offered by insurers deemed to have a “pattern or practice of excessive or unjustified premium increases”– terms completely undefined by the bill and thus left to the unfettered discretion of the exchange to interpret and apply.

Both of these represent ways of imposing premium price controls.  How do price controls force rationing?  To take an extreme example, suppose the government, upset by rising food prices, imposed the rule that no restaurant could charge more than $5 a meal.  Consumers might be delighted – until they realized that, since restauranteurs can only afford to offer very meager meals for such prices, most of the restaurants, other than fast food suppliers, had to close.  In a similar manner, tight government limits on what people are allowed to pay for health insurance will lead to cutting back on the lifesaving treatments they are able to obtain – rationing.

Burke Balch, J.D., directs the National Right to Life Committee’s Powell Center for Medical Ethics.  Documentation and further details are available at www.nrlc.org/HealthCareRationing/Index.htm