Does Health Care Rationing Exist in the United States?

Does health care rationing exist in the United States?

The Affordable Care Act (ACA) of 2010 or otherwise known as the Obama Care calls it misinformation, maintaining explicitly in the statute that “The proposal [by the Independent Payment Advisory Board] shall not include any recommendation to ration health care…”  ( The Washington Post argued to the contrary about the government’s position and claims that rationing of healthcare has already started.  Orient and Uribe, both medical doctors who writes for Washington Post, claimed that waiting periods are already forming and cuts to the Medicare will further exacerbate that.

Dr. Orient wrote that one patient could no longer obtain two kinds of eye drops, while another patient complained that her doctor were busy with computers and when patients requires more than 15 minutes of care, that patient was told to make another appointment because of the long waiting line for patients and the doctor could not afford to get behind schedule.  The dilemma regarding Medicare was central to the last election campaign for both parties, and will not go away. Medicare is financed by payroll taxes, which in turn is financing the healthcare of those who are now retired. The current retirees, the so-called baby boom generation, are living longer.  The Bureau of Labor Statistics estimates that by the year 2020, there will be more than 19-54 million people of over age 65 and that is an increase from the current rate of 12.5% to 20% of the U.S. population.  Logic dictates that as more and more people are retiring, fewer people are working and thus payroll taxes will be depleted as well.  That translates to fewer amount of money available for each Medicare beneficiary, when adjusted for health care inflation.

Alternatives to the Medicare dilemma

One alternative is to increase taxes.  President Obama campaigned under the umbrella of increasing the taxes for those who are earning more than $250 thousand annually, which was accepted willingly by more than half of the voting population. Currently, this notion is being debated in Congress and the results are yet to be determined.  Another alternative is rationing which means less money available per senior citizen that will result in less treatment.  The ugly consequence of this alternative is that many lives will probably perish due to inadequate care, and that is not politically correct for the policy makers.

Is rationing a form of cost containment?

The Independent Payment Advisory Board (IPAB) that was alluded to in the first paragraph is an 18-member panel commissioned under the ACA to the slow the growth nationally of health expenditures below the rate of medical inflation (, which is maybe synonymous to cost containment.  Experts agree that it is unclear whether cost containment and expenditure control are synonymous with rationing.  Redwood (2000) in his work of “Why Ration Healthcare?” has defined cost containment as the effort to limit a payer’s or insurer’s healthcare expenditure to a predetermined, usually budgeted or capped sum for a given period of years and nothing more but of financial control.  Rationing, in contrast is less concerned with financial control and more with the allocation and prioritization of healthcare resources.

Political ramifications of rationing

According to Redwood, in countries such as the United Kingdom, France, Germany where medicine is socialized, there is an underlying need for cost containment and expenditure control.  And there are reports of rationing which are indisputable and undisputed.  The British Medical Association admits that rationing of health care in one form or another has always existed but has not been discussed.  In Europe, healthcare rationing is not politically correct to admit in the same manner as socialized medicine does in the USA.  According to Mundell (2004), in the United States, the majority of the population is dissatisfied with their health care but despite of all of the discontent, a large majority of Americans continue to reject the idea of a government mandated socialized medicine. Many are fearful that the quality of their health care will be impacted with threats of long waiting lines, a lack of specialized care, and rationing will accompany socialized medicine.

The economics of rationing

According to Feldstein, a health economist and faculty at the University of California Irvine, there are two methods by which rationing can occur. One is by government control of distribution on access to goods and services, the other through one’s ability to pay. An example of government control of access is during the 1970’s when there was an oil embargo.  Because prices were so low, people wanted to have an access to gasoline even at exorbitant price, but the government rationed it anyway. The other method of rationing is by one’s ability to pay. This method is not explicitly used in the U.S because the major portion of the population is able to pay for their medical services.

Moreover, Feldstein implied that payer reimbursement system does play an important role in rationing. A ten percent raise in insurance premium creates a two percent drop in medical use. Conversely, when insurance premium drops or the out-of-pocket expenses for the medical use of services drops, patient’s doctor visits increases. When a service or product is in demand because people can afford the cheap price, rationing must take place because that particular resource would become scarce. It is all about basic supply and demand.

Discrimination in rationing

Discrimination can take place in healthcare, according to Redwood. Central to the dogma of medicine is to treat those who are in need, regardless of age, sex, lifestyle and place of residence.  Need in health care is a concept that lacks precision. Most systems recognize need under conditions of emergency or when life is under threat. In chronic diseases, need falls short of being medically compelling.  Ageism is a disguised form of rationing expenditure and discriminating in the use of scarce resources.  Rationing is discriminating as well to those whose lifestyles do not conform to today’s standards of healthy living, such as alcoholics, HIV-positive and chain smokers.  It is unethical to deny health care to these groups of people, although in today’s morality especially in times of economic downturn, people might concede that it is perfectly alright to deny them coverage.


These following factors will indicate that rationing is at work:  scarcity of resources; waiting lists and long waiting times; denial of quality treatment; and discrimination between patients regardless of need.  However, in its current health care form, the aforementioned factors are not yet the trend in the U.S. health care system therefore, one can argue that rationing does not exist in the U.S. hence, not appropriate and not necessary at the present time.


Cesar Aquino is a Cytotechnologist (ASCP), has an MBA in Healthcare Management, and currently a PhD candidate in Healthcare Administration.