Insideous Rationing

I am often told, "The American public will never stand for rationing." It may be true that if someone were to just come out and say, "We're going to ration health care" people would be up in arms. But, it doesn't work that way. Look at developments this week.

An official governmental agencey determined that women do not need mammograms starting at age 40. Instead, they should start at 50. This announcement was met with a chorus of people and organizations saying, in essence, "Wait a minute. If I had waited until 50, I would have died."

Suppose we have a national health care system that provides all "governmental recommended care." Would that plan cover mammograms for a 42 year old woman? No, it would not. As a consequence, health care services are being rationed.

Now, suppose also that individuals were precluded from obtaining coverage beyond the coverage provided by the national health care system as proposed by some in the current administration. A 42 year old could not get a mammogram even if she was willing to pay for it on her own.

As we point out in our book, To Tax or To Ration, rationing is already with us. It will only become more extensive. Now is the time to get involved in the conversation.

National Nursing Home Insurance

It appears that the Senate national health care bill, like that from the House, will include a provision for minimal long term care insurance. Participation in the program will be optional. Those who participate, (pay premiums), for a minimum of five years could receive a lifetime benefit of up to $75 per day. The goal is to provide sufficient coverage to permit more individuals to receive home care--a laudatory goal. With broad participation, according to the Congressional Budget Office, the program could be self-sustaining for its first 75 years.

Unfortunately, as we point out in To Tax or To Ration, if participation is voluntary, the program will not work. A concept called "adverse selection" steps in. Only those persons who expect to need coverage, based upon personal health history or family health history, participate. Furthermore, only older individuals will participate, not younger. As a result, according to the actuaries at the Center for Medicare and Medicaid Services, there is a significant risk that the program will not be self-sustaining. It will, in fact, put an additional strain on the federal budget.

It would be unwise to rely on this benefit, if it passes, to solve the problem of providing long-term care for America's elderly. As pointed out in the book, ultimately it will come down to a combination of additional taxes and rationing.