Health care rationing in the US?
August 7, 2009 5:09 PM   Subscribe

There is much talk about health care rationing in Britain, for example. How do I find out more about the status of rationing in the United States, my health care (nice employer based) and Medicare in particular. Is it the case that with health care in the US, private or Medicare, cost is never a reason to deny a procedure? That people under Medicare, for example, get all of those 50,000$ drugs that give you 6 months of life? How can I find out if my plan covers every possible procedure or not? I'm less concerned with the issue of rescision as a roundabout way of denying care versus explicit denial of care based on cost.
posted by Wood to Health & Fitness (16 answers total) 6 users marked this as a favorite
Is it the case that with health care in the US, private or Medicare, cost is never a reason to deny a procedure?

In private coverage, cost is always part of the equation when it comes to covering or denying a particular procedure. Remember, too, that there are often very high deductibles that must be met before insurance actually starts paying for anything. One can rack-up a sizable hospital bill before insurance kicks-in. And, even then, insurance may only cover a percentage of covered costs. 80% is very common, leaving the patient to come-up with more cash to cover what insurance won't. This, in fact, in addition to the high up-front insurance premium, is how de-facto healthcare rationing is done in the US.

That people under Medicare, for example, get all of those 50,000$ drugs that give you 6 months of life?

No. Additionally, Medicare does not cover everything, especially drugs. There's a booming market for private Medicare supplement insurance to cover what Medicare doesn't.
posted by Thorzdad at 5:21 PM on August 7, 2009

Oh, my goshgeewiz does Medicare not cover everything. First of all, they only cover anything at all at a cost they have predetermined, not what your provider bills for. Some providers let this go, some bill you for the balance, which is why Medicare users often get a medigap plan. Also, there are absolutely ridiculous exclusions in medicare, pretty much falling heavily in the preventative category that are not covered. (i.e. paying for a special mattress to prevent pressure sores in a wheelchair user is not covered. The months and months of hospitalization to heal from a bad pressure wound is partly covered at a cost much higher than just supplying the mattress would have been.) Every time I have any kind of medical care, I get a CMS (private medicare billing contractor) statement detailing what items will be covered and at what rate, and what items won't at all and why. I am not learned enough to tell you the rhyme or reason to the exclusions.

Also, medicare isn't special here. Private insurance is very, very much guilty of cherry-picking what they cover. Anyone who tells you we don't have health care rationing in this country is either outright lying or has their head in the sand.
posted by Bueller at 5:36 PM on August 7, 2009 [1 favorite]

Many insurance policies have lifetime caps - $1 million, for instance. Which sounds like a lot, unless you have, say a sick baby who spends three months or more in the NICU (friends of mine are going through this right now). That racks up cost fast.

You'll find very few (reliable) numbers out there - no insurance company is going to flat-out say "You can't have treatment X for leukemia because it costs too much;" instead, they'll say you can't have it because it's experimental (even if it isn't). They will tell you upfront that they'll only pay for X number of visits to a mental health provider, physical therapist, etc., and after that you're on your own.

For more - much, much more - on private plans that complement Medicare, see here.*

* My standard disclaimer: I work for the organization that produces this stuff, but I don't have anything to do with the writing or researching end of it.
posted by rtha at 5:39 PM on August 7, 2009

I have private health insurance and you'd better believe they ration my care. I am not covered AT ALL for anything related to my asthma. You got it. I have a chronic lung disease that I did not choose to have nor did I ever do anything to "deserve" and yet I'm not covered, not one tiny bit, for treatment related to it. Nothing preventive, nothing catastrophic. Nothing.
posted by cooker girl at 5:51 PM on August 7, 2009

They don't need to deny based on cost because they can deny based on "roundabout" ways. That's how they get away with denying on cost, because that's what they're actually doing. You should see what types of things insurance plans (including Medicare) try to say aren't medically necessary. I promise you it's usually not the cheap meds/procedures, either.

That people under Medicare, for example, get all of those 50,000$ drugs that give you 6 months of life?

No, no no no no. While it is somewhat subsidized, seniors have to pay extra for Medicare Part D, which is the part that covers prescriptions. There isn't just one Part D, it's just like buying private insurance in that you have to pay more if you want more coverage. Ever heard of the "donut hole?" It's very complicated, but basically there are a couple thousand dollars per year that Medicare recipients have to pay 100% out of pocket if they go over a certain amount spent on meds that year. As you might guess, this happens to a lot of people because everyone on Medicare is either a senior, or got on it because they're disabled.

As far as people getting super expensive drugs, that's not how it works with Medicare, or most insurance plans. For example, there is a drug called Gleevec that is lifesaving to people with certain types of leukemia, but it is REALLY expensive, like $2000+ per month, and only available orally. People on Medicare, and on many/most private insurance plans have a hell of a time paying for this. Some companies outright don't cover it. Why? It's really expensive. I'm sure they have some other fancy b.s. official reason, but bottom line, they don't want to pay out over $20k/year for one drug for one insured.

Bottom line to my quasi-rant: insurance companies refuse to pay for things because of cost all the time, but they're really good at covering their asses, AND they are allowed to get away with it.
posted by ishotjr at 6:41 PM on August 7, 2009

note on what I said about Part D donut hole: if a person has a supplement, this is not as big of an issue.
posted by ishotjr at 6:43 PM on August 7, 2009

And, to give you a Canadian point of view, health care is not rationed here as portrayed in TV commercials. The woman with the brain tumor was a distinct exception. And, btw, her health care costs will be covered if it can be shown that she could not/did not receive the care she needed in Canada. It takes time as it's a huge bureaucracy, but usually common sense prevails. Sometimes people are sent out of the country for care if a procedure is not available here, but it's the exception. There are waiting lists, esp for joint replacements as there are just not enough surgeons. Our doctors are retiring and the medical colleges have made the situation worse for years by severely limiting enrollment and not allowing foreign doctors to requalify here. That said, care here is generally good.

There is no limit on public health care, there is no exclusion for pre-existing conditions, there is no rationing in the sense that 'you've used up your allotted dollars.' There is rationing in the sense that some procedures are delisted, aka, taken off the list of things the government will fully pay for. Those may be provided at whatever cost the market will bear by private, for profit health care providers. One example is laser vision correction. One bad example is a test for a certain type of eye disease that can be prevented, occurs mostly in older people, and, if untreated, can cost someone most of their eyesight. The seniors and others are raising hell with the Ontario to get this reinstated. I'm betting they'll win.

Examples: I've had 4 minor operations, all necessary, all paid for in full. My hospital insurance, through employer, paid the hospital stay and all related in hospital costs. My DD #1 has mental health issues. Her psychiatrist appts are fully covered; psychologists are not. She was hit by a car and left with a badly shattered leg. All her opertions (more to come) are fully paid for; her pain meds outside the hospital are not. My mother is a senior. All her medical costs are covered, mostly by the government, including standard medications. She had 2 cataract operations, both fully covered. I'd be living in a tent if I'd had to pay for DD's operations and mine.

We can change GPs whenever we choose; they can refer us to specialists or for tests without question and without cost. Women are encouraged to get annual pap smears and, over a certain age, breast scans. Dental care is not included. I also live in a province that offers everyone the annual flu shot for free. The emphasis here is on prevention rather than heroic measures.

If you want to know where the scams are, look at Canadian disability and long term income protection insurance. They have imported US style adversarial techniques to deny as many people as possible the coverage they've paid for. A cadre of suspect lawyers seems to have found a very profitable niche negotiating with the insurers and getting paid from both sides.
posted by x46 at 6:45 PM on August 7, 2009 [1 favorite]

Anyone who tells you we don't have health care rationing in this country is either outright lying or has their head in the sand..

My mother was diagnosed with advanced breast cancer at age 36. It had metatisized to her lymph nodes. They didn't really expect her to live. After a radical mastectomy, several rounds of chemo, and two different types of radiation therapy, she is alive and doing well in her mid-50s.

I'm 33, and my private insurance company (Aetna) won't pay for me to have a mammogram because I am too young. My doctor has strongly urged me to have both a mammogram and a breast ultrasound (sometimes done in conjunction with a mammo for dense breast tissue). According to Aetna, mammograms start at 40. Because nobody gets breast cancer before then.

Also, Aetna (I luv them!) tried to refuse a claim when my daughter had a doctor's visit related to a mild pneumonia. She was briefly uninsured about a year ago, and had been hospitalized before then (while still insured) for an asthma exacerbation. See, they thought the pneumonia might have been a pre-existing condition for which she wasn't insured. Because if you are sick and insured, they will cover it. But if you are sick and uninsured, it isn't their problem. This makes sense!(?)
posted by jeoc at 6:46 PM on August 7, 2009

How can I find out if my plan covers every possible procedure or not?

Consider that the insurance companies have many ways of denying coverage which are not outright denials, but more indirect -- such as that woman who got leukemia and whose insurance company increased the fees that they charged her employer by about a million dollars p/a to cover the procedures. Faced with such a stiff increase the employer had to fire the woman or else cancel all employees' coverage. Her options then would be to pay exorbitant CORBA fees, find a new job with a group plan that would take her, or pay out of pocket until she went broke and could qualify for Medicaid. She was royally screwed, but the insurance company never outright denied her any procedures; they just made it impossible for her employer to continue to have her on payroll.

The woman with the brain tumor was a distinct exception.

That woman had a benign cyst, not a tumor, and while she indeed on a waiting list to have it removed there was no pressing medical need that necessitated quick action. She was just impatient.
posted by Rhomboid at 7:47 PM on August 7, 2009

Peter Singer, Why We Must Ration Health Care is a recent essay in the New York Times with a few examples of this. Doesn't fully answer your request for details but worth taking a look at if you are thinking about this stuff and haven't seen it.
posted by LobsterMitten at 8:51 PM on August 7, 2009

seconding the article by Peter Singer. It always rolls some heads but also changes a lot of minds in the undecided/underinformed camp.
posted by mezamashii at 1:36 AM on August 8, 2009

Health Care in the UK is rationed according to need, Health care in the US is rationed according to ability to pay.

There are many consideration that make the kind of utilitarian calculation that Peter Singer advocates very complicated. I note for example that he does not discuss the argument surrounding whether we should favour helping people who are of working age rather over children and the elderly - this is advocated by DALYs (disability adjusted life years) which were developed for use in developing countries.

In any case his broad argument is correct we must ration healthcare, it is irresponsible to suggest otherwise. The question then is how do we ration it? Like Singer I believe that an open an transparent system of rationing according to need is vastly preferable to a system which secretly rations according to ability to pay - on moral grounds.

Secondly, I would also prefer an efficient system to an inefficient system. Because of the structure of health care supply, and the asymmetric levels of information available to patients, insurers and providers. A pure market system for the provision of health care is vastly inefficient. Note that the US spends more on health care than any other developed nation, but gets less benefit from it. This is the classic market failure. Nationalising healthcare controls the market incentives which leads to health care inflation.

In any case, in the UK, where there is only limited rationing at the extremes, where costs are either huge or efficacy is uncertain. In the US there is rationing all the way up the pyramid. Individuals hold off a doctors visit, or collection a prescription. Hospital ration their resources heavily in favour of those who can pay. And insurance companies will seek to pay out as little as possible. Of course the hidden nature of this rationing makes it hard to track down, as they become personal tragedies not social problems
posted by munchbunch at 3:13 AM on August 8, 2009 [3 favorites]

The problem with the way health care is rationed in the US is that it happens on many different levels, some obvious and some less so. The insurance companies play a role in this in a variety of ways as mentioned above, but there are other players as well. Hospital administrators and committees play a role in deciding what is available, often without patients even realizing it. For example, that fancy new daVinci surgical robot? For purchase, installation, and training the cost runs into the millions of dollars, and if an administrator cannot find room in the budget that hospital will not have one and its patients will most likely never realize that they have been denied access to a medical technology. (Conversely, if a hospital does make that investment they will find ways to use it as much as possible to recoup their investment, raising fees along the way and increasing the cost of care.) Or the pharmacy and therapeutics committee may decide that the cost/benefit ratio of that fancy new chemo drug is bad enough that it should not be added to the formulary. Once again patients probably never know that they are being denied access to something. Finally, care is rationed at the state level in 36 states via their Certificate of Need programs, which require the state to approve new construction of healthcare facilities or purchase of equipment costing a certain amount of money. The exact requirements as well as the rigor with which they are applied vary from state to state resulting in a patchwork of different policies. The CON program also provides a way for competing hospitals to hinder their competitors expansion by filing suit to block a CON from being issued to a competing hospital. Needless to say this legal maneuvering also serves to drive up the cost of healthcare here while limiting access by limiting the number of hospitals.
posted by TedW at 4:32 AM on August 8, 2009

Some editorializing, but I did once work for one of the Blues: Just search for "insurance cap", and you'll see all kinds of rationing of insurance in the United States. Chronic or incurable diseases are, largely, not completely covered by U.S. insurance; the historical basis for U.S. is incident-based, similar to car insurance: something bad happens, you get it paid for, then things are fixed and you move on -- preventative care and ongoing maintenance aren't part of the equation, and are so expensive that the insurance companies are motivated to cap them. So, have a heart attack, you'll get the bypass done largely covered by insurance - go to the gym three times a week for decades to prevent a heart attack, you'll have to pay for most, if not all, of the cost. During the 1990s, there was a move to start covering more maintenance and preventative care, realizing that, hey, if an insurance company does more to prevent dialysis treatment being needed, it'll cut costs -- other factors (economy, rising medical costs overall) has pretty much made that go by the wayside. I thought we had one covered wellness check available a year on my insurance; me, my wife, and my daughter all went in. Wife needed minor surgery to check a mole, daughter needed her shots, I had blood drawn and was diagnosed with high cholesterol. Wife and daughter were "medically necessary", they cost $30 each. Me? I wasn't "sick", technically, so the $600 in bills for doctor, blood draw technician, and lab work are mine to bear - and I was still diagnosed with a negative medical condition. Oh, and my prescription has three things on it: the cholesterol drug from the TV commercials, improved diet, and regular exercise. Guess which of the three is covered by insurance, yet the least significant in improving my overall health?

Nearly all private insurance has a cost or "per-incident" cap on mental illness, and often quite lower than other caps, and almost definitely lower than the actual expected cost of services; people with alcoholism, schizophrenia, depression, anxiety, Asbergers, etc., had better figure out how to get better within so many visits a year, or keep it cheap, or else they're on their own. This is one reason (but not all) that public health services handle a huge part of a community's mentally ill: even if they have insurance, medicaid may step in and cover the difference - or, hey, the insurance company wins, because the alcoholic who has used up their twice-lifetime inpatient treatment limit got drunk before work on Tuesday and is out of a job - and off the insurance now, yay!
posted by AzraelBrown at 6:29 AM on August 8, 2009

My hospital insurance, through employer, paid the hospital stay and all related in hospital costs.

Just to clarify, though, OHIP does cover hospital stays. It doesn't pay for things like a private room, though.
posted by oaf at 6:43 AM on August 8, 2009

AzraelBrown, $600 for a wellness exam and metabolic panel is very high; did you complain to your doc?

How can I find out if my plan covers every possible procedure or not? I'm less concerned with the issue of rescision as a roundabout way of denying care versus explicit denial of care based on cost.

I recently asked my doctor the same thing, thinking he would have experience with processing insurance, denied claims, etc. And he did. He recommended avoiding Aetna and Unicare ("you need care, we don't care"). He said Humana, BC/BS, and United Healthcare were all pretty good. Towards rtha's point he also recommended getting a high lifetime cap - the ones I've seen range from $2 to $8 million and the cost of the higher cap is about $10 per month.

So that's where I would start, with your doc. Keep in mind that BC/BS in Texas is probably not the same company as in Washington state - not sure about the other companies. And the cost of insurance varies widely across states; it seems substantially cheaper in WA than in TX, for example.

Another place to look is on the insurance company's web site. They'll have a link to some "what the plan covers" document. They will also have an Exclusions section in the document. The ones I've seen have a "if it's not listed, it's not covered" clause, so the answer to the every-possible-treatment part of your question is No.

In comparison - Canada's health system is administered at the province level and different provinces cover different things. New Brunswick, for example, does not cover ambulances or abortion, among other things (perhaps they are provided free by the municpality, I don't know). I would point out that there is an "Appeals" link prominently displayed on the front of the New Brunswick page, so I assume not everyone is happy with every health care decision made by the province.
posted by txvtchick at 9:42 AM on August 8, 2009

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