Policy Documents

If It Itches, Scratch It!

Conrad F. Meier –
February 1, 1998

My Uncle Herman, a German emigre, taught me valuable lessons about life and liberty while I worked on his farm during the summers of my youth. He told me itching skin was a sign of something bugging you. If it crawls on you, smack it; if you can't see it, scratch it, he counseled.

In 1988, something happened to our Medicare system that bugged me then as it does today: the federal government started taking control of senior citizens' health care. Since I lacked the means (though not the desire) to smack Congress, I started scratching . . . I began writing about health care issues. Letters to my congressmen became letters to the editor, and then full-fledged policy analyses.

The 1988 event that prompted all this scratching was passage of the Catastrophic Health Care Reform Act, an odious piece of legislation that would have shifted a significant portion of the Medicare premium expense onto senior citizens. Though the federal government had intruded in their health care decision-making before, after passage of this law senior citizens began to experience an itch that needed scratching. And scratch they did. The law was repealed in 1989.

Sad to say, the itch is back worse than ever.

This time, senior citizens' health care reform was deceitfully buried in the massive balanced budget bill passed last September. The little-known provision establishes a health care system in which anyone younger than 65 can freely contract for private medical services . . . but those over 65 may not.

The new law effectively restricts the freedom of seniors to purchase medical services outside the Medicare system. Knowing that it would be hugely unpopular to bar seniors from spending their own money in their own way, the politicians called it something other than Medicare reform, and they put the onus of compliance on doctors.

Here's how the new law can be expected to play out, in thousands of doctor's offices across the country:

We senior citizens will go to our usual doctor, who accepts Medicare-eligible patients, and request a service for which Medicare does not pay. In itself, that doesn't pose a problem . . . we'll just pay for it ourselves, like we did last year.

But there's the rub . . . I mean, itch. Under the new law, our doctors cannot provide for us services not covered by Medicare--even if we're willing to pay for the service out-of-pocket, or if we carry private insurance to cover such gaps in our Medicare coverage. Any doctor who tries and gets caught will be blackballed for two years, forbidden during that period from seeking reimbursement for Medicare-approved services he provides to any of his patients.

The itch is all the more troubling because of how easily and insidiously it spreads. This is exactly how Canada killed private medicine. The country never passed an outright law barring its citizens from spending their own money on medical services not provided by the government-run system. But over time, Canadian doctors who opted out of government care were unable to attract enough patients willing to forgo the government entitlement. Those physicians either reluctantly agreed to socialized medicine or migrated to the United States. In the end, Canadian citizens suffered most.

Here in the U.S., a handful of Congressmen have offered up a weak salve. Their bills, H.R. 2497 and S. 1194, provide that nothing "shall prohibit a Medicare beneficiary from entering into a private contract if the Secretary [of Health] has been provided with the minimum information to avoid payment under part A or part B."

The reporting requirement is rationalized as a defense against fraud. But Medicare fraud is wholly unrelated to a patient's right to contract privately for health care. If doctors double-dip, charging both patient and Medicare for the same claim, they are not only foolish, but criminally liable. The doctor who gets caught in such fraud can be fined $10,000 per case, excluded from Medicare, and even sent to prison.

Medicare beneficiaries receive a copy of the Medicare payment form and know when their doctor has been paid twice. Informed and vigilant patients are the best cure for Medicare fraud--a fact recently recognized by the Health and Human Services Department, which has awarded $2 million to 12 advocacy groups to train seniors how to detect fraudulent Medicare practices.

The real reason for restricting senior citizens' access to health care outside the Medicare system has nothing to do with Medicare fraud, and everything to do with the federal government's desire to impose cradle-to-grave government control over health care.

This is no mere bug bite . . . it's a major itch that we've all got to start scratching.

Guest columnist Conrad F. Meier is a health policy advisor for The Heartland Institute and former state chairman of the health insurance committee for the National Association of Life Underwriters. He can be reached by e-mail at meier@heartland.org.