Healthcare rationing in the United States exists in various forms. Access to private health insurance is rationed on price and ability to pay. Those unable to afford a health insurance policy are unable to acquire a private plan except by employer-provided and other job-attached coverage, and insurance companies sometimes pre-screen applicants for pre-existing medical conditions. Applicants with such conditions may be declined cover or pay higher premiums and/or have extra conditions imposed such as a waiting period.[1][2]
The poor are given access to Medicaid, which is restricted by income and asset limits by means-testing, and other federal and state eligibility regulations apply. Health maintenance organizations (HMOs), which are common among the rest of the population, restrict access to treatment by financial and clinical access limits.[3][pageneeded] Those 65 and older and a few others also qualify for Medicare, but it also has many restrictions.
In the media and in academia, some have advocated explicit healthcare rationing to limit the cost of Medicare and Medicaid. They argue that a proper rationing mechanism would be more equitable and cost-effective.[4][5][6]
"Health care is a scarce resource, and all scarce resources are rationed in one way or another. In the United States, most health care is privately financed, and so most rationing is by price: you get what you, or your employer, can afford to insure you for. But our current system of employer-financed health insurance exists only because the federal government encouraged it by making the premiums tax deductible. That is, in effect, a more than $200 billion government subsidy for health care. In the public sector, primarily Medicare, Medicaid and hospital emergency rooms, health care is rationed by long waits, high patient copayment requirements, low payments to doctors that discourage some from serving public patients and limits on payments to hospitals."
David Leonhardt wrote in the New York Times in June 2009 that rationing presently an economic reality: "The choice isn't between rationing and not rationing. It's between rationing well and rationing badly. Given that the United States devotes far more of its economy to health care than other rich countries, and gets worse results by many measures, it's hard to argue that we are now rationing very rationally." He wrote that there are three primary ways the US rations healthcare:[6]
The increases in healthcare premiums reduce worker pay. In other words, more expensive insurance premiums reduce the growth in household income, which forces tradeoffs between healthcare services and other consumption.
The increases also prevent smaller companies from affording health insurance for their workers.
The cost prevents the certain types of care from being provided.
During 2007, nearly 45% of US healthcare expenses were paid for by the government.[8] In 2009, an estimated 46 million individuals in the United States did not have health insurance coverage. In 2008, Tia Powell led a New York State work group to set up guidelines for rationing ventilators during a potential flu pandemic.[9]
Methods used
By insurance companies
Dr. Gerald Grumet has chronicled how private insurers and third party payers delay and impede the utilization of medical services through creating inconvenience and confusion for both patients and physicians through complex claims review processes with layers of administrative handling that supersede the autonomy of treating physicians.[10]
President Obama noted that US healthcare was rationed based on income, type of employment, and pre-existing medical conditions, with nearly 46 million uninsured. He stated that millions of Americans were denied coverage or face higher premiums because of pre-existing medical conditions.[1]
In an e-mail to Obama supporters, David Axelrod wrote, "Reform will stop 'rationing' - not increase it.... It's a myth that reform will mean a 'government takeover' of health care or lead to 'rationing.' To the contrary, reform will forbid many forms of rationing that are currently being used by insurance companies."[11]
A 2008 study by researchers at the Urban Institute found that health spending for uninsured non-elderly Americans was only about 43% of health spending for similar, privately insured Americans. That implied rationing by price and ability to pay.[12]
Fareed Zakaria wrote that only 38% of small businesses provided health insurance for their employees during 2009, versus 61% in 1993, because of rising costs.[13]
An investigation by the House Subcommittee on Oversight and Investigations showed that health insurers WellPoint Inc., UnitedHealth Group and Assurant Inc. canceled the coverage of more than 20,000 people, allowing the companies to avoid paying more than $300 million in medical claims over five years. It also found that policyholders with breast cancer, lymphoma, and more than 1000 other conditions were targeted for rescission and that employees were praised in performance reviews for terminating the policies of customers with expensive illnesses.[14]
Private and public insurers all have their own drug formularies through which they set coverage limitations, which may include referrals to the insurance company for a decision on whether the company will approve its share of the costs. American formularies make generalized coverage decisions by class, with cheaper drugs at one end of the scale and more expensive drugs with more conditions for referral and possible denial at the other end. Not all drugs may be in the formulary of every company, and consumers are advised to check the formulary before they buy insurance.[15]
The phenomena known as medical bankruptcy is unheard of in countries with universal health care in which medical copayments are low or no nonexistent.[citation needed] In the United States, however, research shows[who?] that many bankruptcies have a strong medical component, even among the insured.[citation needed] Medical insurance before the Affordable Care Act allowed annual caps or lifetime caps on coverage, and the high cost of care made it common for insured persons to suffer bankruptcy after breaching those limits.[citation needed]
By price
A July 2009 NPR article quoted various doctors describing how America rations healthcare. Dr. Arthur Kellermann said: "In America, we strictly ration health care. We've done it for years.... But in contrast to other wealthy countries, we don't ration medical care on the basis of need or anticipated benefit. In this country, we mainly ration on the ability to pay. And that is especially evident when you examine the plight of the uninsured in the United States."[16]
Rationing by price means accepting that there is no triage according to need. Thus, in the private sector, it is accepted that some people get expensive surgeries such as liver transplants or non-life-threatening ones such as cosmetic surgery, when others fail to get cheaper and much more cost-effective care such as prenatal care, which could save the lives of many fetuses and newborn children. Some places, like Oregon for example, explicitly ration Medicaid resources by using medical priorities.[17]
Polling has discovered that Americans are much more likely than Europeans or Canadians to forgo necessary health care (such not seeking a prescribed medicine) on the grounds of cost.[citation needed]
According to a recent survey commissioned by Wolters Kluwer, the majority of physicians and nurses (79%) say the cost to the patient influences the treatment choices or recommendations the provider makes.[18]
Rationing by pharmaceutical companies
Pharmaceutical manufacturers often charge much more for drugs in the United States than they charge for the same drugs in Britain, where they know that a higher price would put the drug outside the cost-effectiveness limits applied by regulators such as NICE. American patients, even if they are covered by Medicare or Medicaid, often cannot afford the copayments for drugs, which is rationing based on ability to pay.[4]
Rationing by government control
After the death of Coby Howard in 1987[19]Oregon began a programme of public consultation to decide which procedures its Medicaid program should cover in an attempt to develop a transparent process for prioritizing medical services. Howard died of leukaemia, which was not funded. His mother spent the last weeks of his life trying to raise $100,000 to pay for a bone marrow transplant, but the boy died before treatment could begin. John Kitzhaber began a campaign arguing that thousands of low-income Oregonians lacked access to even basic health services, much less access to transplants. A panel of experts was appointed, the Health Services Commission, to develop a prioritized list of treatments. The state legislators decided where on the list of prioritised procedures the line of eligibility should be drawn. In 1995 there were 745 procedures, 581 of which were eligible for funding.[20]
Republican Newt Gingrich argued that the reform plans supported by President Obama expand the control of government over healthcare decisions, which he referred to as a type of healthcare rationing. He expressed concern that although there is nothing in the proposed laws that would constitute rationing, the combination of three factors would increase pressure on the government to ration care explicitly for the elderly:[21] an expanded federal bureaucracy, the pending insolvency of Medicare within a decade, and the fact that 25% of Medicare costs are incurred in the final year of life.
Princeton Professor Uwe Reinhardt wrote that both public and private healthcare programs can ration and rebutted the concept that governments alone impose rationing: "Many critics of the current health reform efforts would have us believe that only governments ration things.... On the other hand, these same people believe that when, for similar reasons, a private health insurer refuses to pay for a particular procedure or has a price-tiered formulary for drugs – e.g., asking the insured to pay a 35 percent coinsurance rate on highly expensive biologic specialty drugs that effectively put that drug out of the patient's reach — the insurer is not rationing health care. Instead, the insurer is merely allowing "consumers" (formerly "patients") to use their discretion on how to use their own money. The insurers are said to be managing prudently and efficiently, forcing patients to trade off the benefits of health care against their other budget priorities."[22]
During 2009, former Alaska Governor Sarah Palin wrote against rationing by government entities, referring to what she interpreted as such an entity in current reform legislation as a "death panel" and "downright evil." Defenders of the plan indicated that the proposed legislation, H.R. 3200, would allow Medicare for the first time to cover patient-doctor consultations about end-of-life planning, including discussions about drawing up a living will or planning hospice treatment. Patients would be allowed but not required to seek out such advice on their own. The provision would limit Medicare coverage to one consultation every five years.[23] However, as governor, Palin had supported such end of life counseling and advance directives from patients in Alaska in 2008.[24]
Ezra Klein described in the Washington Post how polls indicate senior citizens are increasingly resistant to healthcare reform because of concerns about cuts to the existing Medicare program that may be required to fund it. That is creating an unusual and potent political alliance, with Republicans arguing to protect the existing Medicare program although they historically opposed that and other major entitlement programs.[25] The CBO scoring of the proposed H.R. 3200 (America's Affordable Health Choices Act of 2009) included $219 billion in savings over 10 years, some of which would come from Medicare changes.[26]
By economic value added
A concept called "quality-adjusted life year" (QALY - pronounced "qualy") is used by Australian Medicare to measure the cost-benefit of applying a particular medical procedure. It reflects the quality and the quantity of life added by incurring a particular medical expense. The measure has been used for over 30 years in the country's universal single-payer healthcare system and has been implemented in several other countries to help with rationing decisions. Australia applies QALY measures to control costs and ration care and allows private supplemental insurance for those who can afford it.[4]
By comparative effectiveness research
Medicare spending per person varied significantly across states in 2006.
Several treatment alternatives may be available for a given medical condition, with significantly different costs but no statistical difference in outcome. Such scenarios offer the opportunity to maintain or improve the quality of care while significantly reducing costs through comparative effectiveness research. Writing in the New York Times, David Leonhardt described how the cost of treating the most common form of early-stage, slow-growing prostate cancer ranges from an average of $2,400 (watchful waiting to see if the condition deteriorates) to as high as $100,000 (radiation beam therapy):[27]
Some doctors swear by one treatment, others by another. But no one really knows which is best. Rigorous research has been scant. Above all, no serious study has found that the high-technology treatments do better at keeping men healthy and alive. Most die of something else before prostate cancer becomes a problem.
According to economist Peter A. Diamond and research cited by the Congressional Budget Office (CBO), the cost of healthcare per person in the US also varies significantly by geography and medical center, with little or no statistical difference in outcome:[28]
Although the Mayo Clinic scores above the other two [in terms of quality of outcome], its cost per beneficiary for Medicare clients in the last six months of life ($26,330) is nearly half that at the UCLA Medical Center ($50,522) and significantly lower than the cost at Massachusetts General Hospital ($40,181)...The American taxpayer is financing these large differences in costs, but we have little evidence of what benefit we receive in exchange.
Comparative effectiveness research has shown that significant cost reductions are possible. Office of Management and Budget (OMB) Director Peter Orszag stated: "Nearly thirty percent of Medicare's costs could be saved without negatively affecting health outcomes if spending in high- and medium-cost areas could be reduced to the level of low-cost areas."[29]
President Obama has provided more than $1 billion in the 2009 stimulus package to jumpstart Comparative Effectiveness Research (CER) and to finance a federal CER advisory council to implement that idea. Economist Martin Feldstein wrote in the Wall Street Journal, "Comparative effectiveness could become the vehicle for deciding whether each method of treatment provides enough of an improvement in health care to justify its cost."[30]
By government
Former Republican Secretary of Commerce Peter George Peterson indicated that some form of rationing is inevitable and desirable considering the state of US finances and the trillions of dollars of unfunded Medicare liabilities. He estimated that 25 to 33% of healthcare services are provided to those in the last months or year of life and advocated restrictions if quality of life cannot be improved. He also recommended for a budget to be established for government healthcare expenses by establishing spending caps and pay-as-you-go rules that require tax increases for any incremental spending. He has indicated that a combination of tax increases and spending cuts will be required. He advocated addressing those issues under the aegis of a fiscal reform commission.[5]
Arizona modified its Medicaid coverage rules because of a budget problem that included denying care for expensive treatments such as organ transplants to Medicaid recipients, including those who had previously been promised funding.[31] MSNBC's Keith Olbermann and others[according to whom?] have dubbed Governor Jan Brewer and the state legislatures as a real life death panel[citation needed] because many of those poor people who are now being denied funding will die or have health because of the political decision.
By age
In the US, the discussion on rationing healthcare for the elderly began to be noticed widely in 1983 when economist Alan Greenspan asked "whether it is worth it" in referring to the use of 30% of the Medicare budget on 5–6% of those eligible who then die within a year of receiving treatment. In 1984, the Democratic governor of Colorado, Richard Lamm, was widely quoted but claimed to have been misquoted as saying that the elderly "have a duty to die and get out of the way."[32]
Medical ethicist Daniel Callahan's 1987 Setting Limits: Medical Goals in an Aging Society[33] discusses whether healthcare should be rationed by age. He calls the elderly "a new social threat" and selfish and for age to be used as a criterion in limiting healthcare. Callahan's book has been widely discussed in the America media, including the New York Times, the Washington Post, the Wall Street Journal, and "just about every relevant professional and scholarly journal and newsletter."[34] One of the major arguments against such age-based rationing is the fact that chronological age, by itself, is a poor indicator of health.[35] Another major argument against Callahan's proposal is that it inverts the Western tradition by making death a possible good and life a possible evil. Amherst CollegeJurisprudence Professor Robert Laurence Barry called Callahan's view "medical totalitarianism."[36][pageneeded] One book-length rebuttal to Callahan from half-a-dozen professors who held a conference at the University of Illinois College of Law in October 1989 was in 1991's Set No Limits: a Rebuttal to Daniel Callahan's Proposal to Limit Health, edited by Robert Laurence Barry and Gerard V. Bradley, a visiting professor of religious studies at the University of Illinois at Urbana–Champaign.[36][pageneeded]
Arguments in favor
Australian philosopher Peter Singer argued for rationing processes:[1]
"Rationing health care means getting value for the billions we are spending by setting limits on which treatments should be paid for from the public purse. If we ration we won't be writing blank checks to pharmaceutical companies for their patented drugs, nor paying for whatever procedures doctors choose to recommend. When public funds subsidize health care or provide it directly, it is crazy not to try to get value for money. The debate over health care reform in the United States should start from the premise that some form of health care rationing is both inescapable and desirable. Then we can ask, What is the best way to do it?"
Medicare and Medicaid Spending as a percentage of GDP
"Future growth in spending per beneficiary for Medicare and Medicaid—the federal government's major health care programs—will be the most important determinant of long-term trends in federal spending. Changing those programs in ways that reduce the growth of costs—which will be difficult, in part because of the complexity of health policy choices—is ultimately the nation's central long-term challenge in setting federal fiscal policy... total federal Medicare and Medicaid outlays will rise from 4 percent of GDP in 2007 to 12 percent in 2050 and 19 percent in 2082—which, as a share of the economy, is roughly equivalent to the total amount that the federal government spends today. The bulk of that projected increase in health care spending reflects higher costs per beneficiary rather than an increase in the number of beneficiaries associated with an aging population."
In other words, all other federal spending categories (such as Social Security, defense, education, and transportation) would require borrowing to be funded, which is not feasible.
President Obama stated in May 2009, "But we know that our families, our economy, and our nation itself will not succeed in the 21st century if we continue to be held down by the weight of rapidly rising health care costs and a broken health care system.... Our businesses will not be able to compete; our families will not be able to save or spend; our budgets will remain unsustainable unless we get health care costs under control."[37]
Healthcare rationing remained a political topic into 2017, with Bernie Sanders and Ted Cruz debating on CNN whether a single-payer system would lead to healthcare rationing.[38]
In the United States, Medicaid is a government program that provides health insurance for adults and children with limited income and resources. The program is partially funded and primarily managed by state governments, which also have wide latitude in determining eligibility and benefits, but the federal government sets baseline standards for state Medicaid programs and provides a significant portion of their funding.
Medicare is a federal health insurance program in the United States for people age 65 or older and younger people with disabilities, including those with end stage renal disease and amyotrophic lateral sclerosis. It was begun in 1965 under the Social Security Administration and is now administered by the Centers for Medicare and Medicaid Services (CMS).
Socialized medicine is a term used in the United States to describe and discuss systems of universal health care—medical and hospital care for all by means of government regulation of health care and subsidies derived from taxation. Because of historically negative associations with socialism in American culture, the term is usually used pejoratively in American political discourse. The term was first widely used in the United States by advocates of the American Medical Association in opposition to President Harry S. Truman's 1947 health care initiative. It was later used in opposition to Medicare. The Affordable Care Act has been described in terms of socialized medicine, but the act's objective is rather socialized insurance, not government ownership of hospitals and other facilities as is common in other nations.
Prescription drug list prices in the United States continually are among the highest in the world. The high cost of prescription drugs became a major topic of discussion in the 21st century, leading up to the American health care reform debate of 2009, and received renewed attention in 2015. One major reason for high prescription drug prices in the United States relative to other countries is the inability of government-granted monopolies in the American health care sector to use their bargaining power to negotiate lower prices, and the American payer ends up subsidizing the world's R&D spending on drugs.
Health insurance or medical insurance is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. As with other types of insurance, risk is shared among many individuals. By estimating the overall risk of health risk and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organization, such as a government agency, private business, or not-for-profit entity.
Two-tier healthcare is a situation in which a basic government-provided healthcare system provides basic care, and a secondary tier of care exists for those who can pay for additional, better quality or faster access. Most countries have both publicly and privately funded healthcare, but the degree to which it creates a quality differential depends on the way the two systems are managed, funded, and regulated.
Medicare Part D, also called the Medicare prescription drug benefit, is an optional United States federal-government program to help Medicare beneficiaries pay for self-administered prescription drugs. Part D was enacted as part of the Medicare Modernization Act of 2003 and went into effect on January 1, 2006. Under the program, drug benefits are provided by private insurance plans that receive premiums from both enrollees and the government. Part D plans typically pay most of the cost for prescriptions filled by their enrollees. However, plans are later reimbursed for much of this cost through rebates paid by manufacturers and pharmacies.
Health care prices in the United States of America describe market and non-market factors that determine pricing, along with possible causes as to why prices are higher than in other countries.
The Medicare for All Act, also known as the Expanded and Improved Medicare for All Act or United States National Health Care Act, is a bill first introduced in the United States House of Representatives by Representative John Conyers (D-MI) in 2003, with 38 co-sponsors. In 2019, the original 16-year-old proposal was renumbered, and Pramila Jayapal (D-WA) introduced a broadly similar, but more detailed, bill, HR 1384, in the 116th Congress. As of November 3, 2019, it had 116 co-sponsors still in the House at the time, or 49.8% of House Democrats.
The Oregon Health Plan is Oregon's state Medicaid program. It is overseen by the Oregon Health Authority.
In the United States, health insurance helps pay for medical expenses through privately purchased insurance, social insurance, or a social welfare program funded by the government. Synonyms for this usage include "health coverage", "health care coverage", and "health benefits". In a more technical sense, the term "health insurance" is used to describe any form of insurance providing protection against the costs of medical services. This usage includes both private insurance programs and social insurance programs such as Medicare, which pools resources and spreads the financial risk associated with major medical expenses across the entire population to protect everyone, as well as social welfare programs like Medicaid and the Children's Health Insurance Program, which both provide assistance to people who cannot afford health coverage.
Medicare Advantage is a type of health plan offered by Medicare-approved private companies that must follow rules set by Medicare. Most Medicare Advantage Plans include drug coverage. Under Part C, Medicare pays a sponsor a fixed payment. The sponsor then pays for the health care expenses of enrollees. Sponsors are allowed to vary the benefits from those provided by Medicare's Parts A and B as long as they provide the actuarial equivalent of those programs. The sponsors vary from primarily integrated health delivery systems to unions to other types of non profit charities to insurance companies. The largest sponsor is a hybrid: the non-profit interest group AARP using UnitedHealth.
Healthcare reform in the United States has a long history. Reforms have often been proposed but have rarely been accomplished. In 2010, landmark reform was passed through two federal statutes: the Patient Protection and Affordable Care Act (PPACA), signed March 23, 2010, and the Health Care and Education Reconciliation Act of 2010, which amended the PPACA and became law on March 30, 2010.
The healthcare reform debate in the United States has been a political issue focusing upon increasing medical coverage, decreasing costs, insurance reform, and the philosophy of its provision, funding, and government involvement.
The proposed America's Affordable Health Choices Act of 2009 was an unsuccessful bill introduced in the U.S. House of Representatives on July 14, 2009. The bill was introduced during the first session of the 111th Congress as part of an effort of the Democratic Party leadership to enact health care reform. The bill was not approved by the House, but was superseded by a similar bill, the proposed Affordable Health Care for America Act, which was passed by the House in November 2009, by a margin of 220-215 votes but later abandoned.
There were a number of different health care reforms proposed during the Obama administration. Key reforms address cost and coverage and include obesity, prevention and treatment of chronic conditions, defensive medicine or tort reform, incentives that reward more care instead of better care, redundant payment systems, tax policy, rationing, a shortage of doctors and nurses, intervention vs. hospice, fraud, and use of imaging technology, among others.
The Affordable Care Act (ACA), formally known as the Patient Protection and Affordable Care Act (PPACA) and colloquially as Obamacare, is a landmark U.S. federal statute enacted by the 111th United States Congress and signed into law by President Barack Obama on March 23, 2010. Together with the Health Care and Education Reconciliation Act of 2010 amendment, it represents the U.S. healthcare system's most significant regulatory overhaul and expansion of coverage since the enactment of Medicare and Medicaid in 1965.
The Independent Payment Advisory Board (IPAB) was to be a fifteen-member United States government agency created in 2010 by sections 3403 and 10320 of the Patient Protection and Affordable Care Act which was to have the explicit task of achieving specified savings in Medicare without affecting coverage or quality. Under previous and current law, changes to Medicare payment rates and program rules are recommended by MedPAC but require an act of Congress to take effect. The system creating IPAB granted IPAB the authority to make changes to the Medicare program with the Congress being given the power to overrule the agency's decisions through supermajority vote. The Bipartisan Budget Act of 2018 repealed IPAB before it could take effect.
Healthcare in the United States is largely provided by private sector healthcare facilities, and paid for by a combination of public programs, private insurance, and out-of-pocket payments. The U.S. is the only developed country without a system of universal healthcare, and a significant proportion of its population lacks health insurance. The United States spends more on healthcare than any other country, both in absolute terms and as a percentage of GDP; however, this expenditure does not necessarily translate into better overall health outcomes compared to other developed nations. Coverage varies widely across the population, with certain groups, such as the elderly and low-income individuals, receiving more comprehensive care through government programs such as Medicaid and Medicare.
Health care finance in the United States discusses how Americans obtain and pay for their healthcare, and why U.S. healthcare costs are the highest in the world based on various measures.
↑ "Health Care Rationing Through Inconvenience: The Third Party's Secret Weapon," Grumet, Gerald W., M.D., New England Journal of Medicine. 1989 Aug 31; 321(9): 607-611.
This page is based on this Wikipedia article Text is available under the CC BY-SA 4.0 license; additional terms may apply. Images, videos and audio are available under their respective licenses.
United Statesportal 
Health careportal 
