Obamacare Rationing is Beginning to Hit Medicare Advantage Plans for Seniors
By Jennifer Popik, JD, Robert Powell Center for Medical Ethics
In last night’s State of the Union address, President Obama continued to misrepresent his health care law while evidence of rationing continues to mount. While hundreds of thousands lost their coverage in what Politifact dubbed as the 2013 “Lie of the Year”–Obama’s now debunked promise that if you liked your plan you would be allowed to keep it–it is being reported that tens of thousands of seniors are next.
On Tuesday evening the president spoke about health insurance for seniors saying, “And we did all this [extending coverage to uninsured] while adding years to Medicare’s finances, keeping Medicare premiums flat, and lowering prescription costs for millions of seniors.”
While AP factcheckers debunked this statement, an even larger problem is lurking just below the surface. Not only have hundreds of thousands lost coverage only to find narrower networks, and less access to specialty doctors and hospitals under newly created exchange plans (more here), but seniors are now facing the same fate. Even worse, the Obama Health Care law may prevent them from using their own money to obtain plans less likely to ration care.
Medicare for seniors has several components, but nearly 30% of seniors in 2013 choose to receive their benefits through what is called the Medicare Advantage program. These plans work a lot like private insurance, where there are networks of physicians.
In a January 25, 2014 article in the Washington Post entitled, “Doctor Networks Cut by Medicare Advantage Plans,” Ariana Eunjung Cha, reported,
“Thousands of primary-care doctors and specialists across the country have been terminated from privately run Medicare Advantage plans, sparking a battle between doctors who say patient care is being threatened and insurers that insist they have to reduce costs and streamline their operations….
“Insurers say they must shrink their physician networks because they face billions of dollars in government-payment cuts over the next decade — reductions that are being used partly to fund insurance coverage for millions of people under the federal Affordable Care Act.”
Shockingly, these kinds of cuts and reductions are exactly what the Obama Health Care law intended.
According to an August 2010, Congressional Budget Office estimate, the Obama Health Care Law will cut $555 billion from Medicare over the next ten years. Most senior citizens know that the law will significantly cut government funding for their Medicare.
Less widely known is the law’s provision allowing Washington bureaucrats to prevent older Americans from making up the Medicare shortfall with their own funds—taking away their right to spend their own money to save their own lives.
Even before the Obama Health Care Law’s cuts, Medicare faced grave fiscal problems as the baby boomer generation aged. Medicare is financed by payroll taxes, which means that those currently working are paying for the health care of those now retired. As the baby boom generation moves from middle into old age, the proportion of the population that is retired will increase while the proportion of the population that is working will decrease. The result is that the amount of money available for each Medicare beneficiary, when adjusted for health care inflation, will shrink significantly.
In theory, taxes could be increased dramatically to make up the shortfall; however, such a proposal would be unlikely to attract popular and political support. The second alternative is rationing. Less money available per senior citizen means less treatment, including those necessary to prevent death. Many people whose lives could have been saved by medical treatment would perish against their will.
The third alternative is, as the government contribution decreases, that the shortfall could be made up by voluntary payments by senior citizens. Thus, Medicare health insurance premiums could be financed partly by the government and partly from older Americans’ own income and savings.
Through legislative changes in 1997 and 2003 successfully promoted by the National Right to Life Committee, this third alternative became law. A “private fee-for-service” option was created in Medicare under which senior citizens could choose health insurance whose value was not limited by what the government might pay toward it. These plans could set premiums and reimbursement rates for health care providers without upward limits imposed by government regulation.
Such plans would not be forced to ration treatment, as long as senior citizens were free to choose to pay more for them. For information on whether it would be possible to afford health care without rationing, see www.nrlc.org/MedEthics/AmericaCanAfford.pdf.
The Obama Health Care Law indirectly amended the section in the pre-existing law allowing these plans to set their premiums without approval by the Centers for Medicare & Medicaid Services (CMS) by adding, “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.”
Therefore, CMS may now refuse to allow senior citizens the choice of private-fee-for-service plans that charge what CMS, in its standardless discretion, regards as premiums that are too high. Indeed, the provision literally authorizes CMS, if it decides to do so, to refuse to allow private-fee-for-service plans altogether. How the law does this exactly can be found at: www.nrlc.org/uploads/medethics/ObamacareRoutestoRationing.pdf
This focus on removing the only option that will allow seniors to make up the shortfall appears to already be causing a decline in these plans. According to The Kaiser Foundation in their Medicare Advantage November 2013 Factsheet, “PFFS [private-fee-for-service] enrollment increased ten-fold from 0.2 million enrollees in 2005 to 2.2 million 2009, but has since declined to 0.4 million enrollees in 2013, or 3% of all Medicare Advantage enrollees.” Available at: http://kff.org/medicare/fact-sheet/medicare-advantage-fact-sheet/
Thus, this provision is beginning to reduce and could totally remove the only avenue that senior citizen may use to escape rationing—using their own money to save their lives.
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