Catastrophic Health Insurance: Medicare

Catastrophic medical costs are broadly defined as large unpredictable health care expenses; these are usually associated with a major illness or serious injury. The absence of catastrophic health insurance protection for the elderly is the subject of concern in this report.

Order Code IB87106 CATASTROPHIC HEALTH IYSURAPCE: MEDICARE Updated September 1, 1987 by Jennifer ~ ' ~ u l l i v a n Education and Public Welfare Division Congressional Research Service SUMMARY ISSUE DEFINITION BACKGROUND AND ANALYSIS Incidence o f Catastrophic Expenses Insurance Coverage f o r Catastrophic Expenses Current System I s s u e s Acute Care Focus o f Medicare Beneficiary L i a b i l i t y Long-Term-Care - Coverage Gaps Types o f Catastrophic Proposals Administration Accions Congressional Action House Senate LEGISLATION CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS CHRONOLOGY FOR ADD1 TIONAL READING CATASTROPHIC HEALTH INSURANCE: MEDICARE c a t a s t r o p h i c medical c o s t s a r e b r o a d l y d e f i n e d a s l a r g e u n p r e d i c t a b l e h e a l t h c a r e e x p e n s e s ; t h e s e a r e u s u a l l y a s s o c i a t e d w i t h a major i l l n e s s o r s e r i o u s i n j u r y . The a b s e n c e of c a t a s t r o p h i c h e a l t h i n s u r a n c e p r o t e c t i o n f o r t h e e l d e r l y h a s been t h e s u b j e c t of concern f o r s e v e r a l y e a r s . A number o f p r o p o s a l s have been o f f e r e d t o expand p r o t e c t i o n f o r t h e aged t h r o u g h t h e e x i s t i n g Medicare program. Most o f t h e p r o p o s a l s which have been o f f e r e d would p l a c e a n upper l i m i t on b e n e f i c i a r y l i a b i l i t y f o r Medicare d e d u c t i b l e s and c o i n s u r a n c e ; t h e y would a l s o remove t h e l i m i t on c o v e r e d i n p a t i e n t h o s p i t a l days. Some p r o p o s a l s would a l s o a t t e m p t t o p r o v i d e p r o t e c t i o n a g a i n s t some of t h e c o s t s c u r r e n t l y n o t covered under Medicare ( f o r example, p r e s c r i p t i o n d r u g s ) . Few o f t h e p r o p o s a l s i n c l u d e long-term i n s t i t u t i o n a l c a r e e x p e n d i t u r e s i n t h e b e n e f i t package; t h e s e c o s t s , which a r e p o t e n t i a l l y t h e l a r g e s t h e a l t h - r e l a t e d e x p e n d i t u r e s f a c i n g t h e e l d e r l y a r e not covered by Medicare and a r e r a r e l y covered under p r i v a t e h e a l t h i n s u r a n c e p l a n s . The A d m i n i s t r a t i o n s u b m i t t e d a proposal t o Congress i n F e b r u a r y 1987, t h a c would o f f e r c a t a s t r o p h i c p r o t e c t i o n f o r p e r s o n s covered by Medicare. The a d d i t i o n a l c o s t s would be f i n a n c e d by a monthly b e n e f i c i a r y premium (added t o t h e c u r r e n t Medicare P a r t B premium) e s t i m a t e d by t h e A d m i n i s t r a t i o n a t $4.92 i n 1988). The p r o p o s a l c o n t a i n e d no r e c o w e n d a t i o n s p e r t a i n i n g t o coverage of c o s t s n o t a s s o c i a t e d w i t h c o v e r e d Medicare s e r v i c e s o r t o coverage of c a t a s t r o p h i c c o s t s f o r t h e p o p u l a t i o n a s a whole. On J u l y 22, 1987, t h e House passed t h e "Medicare C a t a s t r o p h i c P r o t e c t i o n Act o f 1987", H.R. 2470. For p e r s o n s v o l u n t a r y e n r o l l i n g i n P a r t B , t h e b i l l l i m i t s b e n e f i c i a r y c o s t - s h a r i n g f o r covered P a r t B s e r v i c e s . For a l l b e n e f i c i a r i e s , t h e b i l l removes c o i n s u r a n c e and d u r a t i o n a l l i m i t s f o r h o s p i t a l services; modifies the s k i l l e d nursing f a c i l i t y b e n e f i t ; and expands b e n e f i t s f o r h o s p i c e , home h e a l t h and o u t p a t i e n t mental h e a l t h c a r e . H.R. 2470 a l s o c r e a t e s a s e p a r a t e c a t a s t r o p h i c p r e s c r i p t i o n drug b e n e f i t f o r t h e aged. The b i l l would be f i n a n c e d t h r o u g h a combination of an income-related premium f o r t h o s e b e n e f i c i a r i e s w i t h t a x l i a b i l i t y and a n i n c r e a s e i n t h e P a r t B premium. On J u l y 27, 1987, t h e S e n a t e Finance Comnittee r e p o r t e d S. 1127 which provides c a t a s t r o p h i c protection f o r b e n e f i c i a r i e s v o l u n t a r i l y e n r o l l i n g i n P a r t B by l i m i t i n g b e n e f i c i a r y c o s t - s h a r i n g l i a b i l i t y , removing c o i n s u r a n c e and d u r a t i o n a l limits f o r covered h o s p i t a l s e r v i c e s and modifying t h e s k i l l e d n u r s i n g f a c i l i t y b e n e f i t . I t a l s o improves c o v e r a g e f o r home h e a l t h and h o s p i c e c a r e f o r a l l b e n e f i c i a r i e s . F i n a n c i n g would be t h r o u g h a combination of an income-related premium f o r t h o s e w i t h t a x (The c a l c u l a t i o n s d i f f e r l i a b i l i t y and an i n c r e a s e i n t h e P a r t B premium. c o n s i d e r a b l y from t h o s e i n H.R. 2470). ISSUE D E F I N I T I W C a t a s t r o p h i c medical c o s t s a r e b r o a d l y d e f i n e d a s l a r g e u n p r e d i c t a b l e h e a l t h c a r e e x p e n s e s ; t h e s e a r e u s u a l l y a s s o c i a t e d w i t h a major i l l n e s s o r s e r i o u s i n j u r y . Two methods a r e commonly employed t o d e t e r m i n e whether an i n d i v i d u a l ' s medical expenses a r e c a t a s t r o p h i c i n n a t u r e . The f i r s t s t a n d a r d measures, o v e r a s p e c i f i c p e r i o d of t i m e , t o t a l out-of-pocket e x p e n d i t u r e s ( i . e . , e x p e n d i t u r e s n o t met by i n s u r a n c e o r p u b l i c programs) and d e f i n e s a n y t h i n g o v e r a s p e c i f i e d amount, e.g. $2,000 o r $4,000, a s c a t a s t r o p h i c . The second s t a n d a r d i s based on out-of-pocket e x p e n d i t u r e s t h a t a r e l a r g e r e l a t i v e t o a n i n d i v i d u a l ' s income, e.g. expenses o v e r 5% o r 10% of a n n u a l income. The a b s e n c e of p r o t e c t i o n a g a i n s t c a t a s t r o p h i c h e a l t h c o s t s , p a r t i c u l a r l y f o r t h e e l d e r l y , h a s been t h e s u b j e c t of c o n g r e s s i o n a l concern f o r s e v e r a l y e a r s . A number of p r o p o s a l s have been o f f e r e d t h a t would p r o v i d e p r o t e c t i o n a g a i n s t a t l e a s t some of t h e s e c o s t s . I n c i d e n c e o f C a t a s t r o p h i c Expenses The Department of H e a l t h and Human S e r v i c e s (DHHS) has d e f i n e d c a t a s t r o p h i c expenses" u s i n g a combination of t h e s e methods. I t s p e c i f i e s a t h r e s h o l d amount below which no expense l e v e l i s c o n s i d e r e d c a t a s t r o p h i c r e g a r d l e s s of income; a p e r c e n t a g e of income f i g u r e i s t h e n added t o t h a t amount t o y i e l d t h e t h r e s h o l d above d i c h e x p e n d i t u r e s a r e c o n s i d e r e d c a t a s t r o p h i c . Using v a r y i n g t h r e s h o l d s and p e r c e n t a g e of income f i g u r e s , DHHS e s t i m a t e d t h e i n c i d e n c e o f c a t a s t r o p h i c out-of-pocket e x p e n d i t u r e s i n 1987 ( b a s e d on 1977 d a t a ) . For t h e p o p u l a t i o n under a g e 65 o r f a m i l i e s headed by a p e r s o n under age 65, t h e i n c i d e n c e r a n g e s from 2.4 m i l l i o n t o 6.2 m i l l i o n p e r s o n s , o r 1.2% t o 3.2% of t h i s p o p u l a t i o n group. For t h e aged o r f a m i l i e s headed by a person o v e r a g e 65, t h e r a n g e i s 0.9 t o 2.1 m i l l i o n p e r s o n s , o r 3.5% t o 8.1 p e r c e n t . 'I I n s u r a n c e Coverage f o r C a t a s t r o p h i c Expenses The c h a r a c t e r i s t i c s of h e a l t h i n s u r a n c e coverage f o r t h e o v e r a g e 65 p o p u l a t i o n d i f f e r s from t h a t f o r younger age groups. Almost t h e e n t i r e aged p o p u l a t i o n (between 95% and 96 p e r c e n t , o r 29 m i l l i o n p e r s o n s ) a r e covered under Medicare; i n a d d i t i o n , t h e program c o v e r s 3 m i l l i o n d i s a b l e d p e r s o n s . ~ e d i c a r e ' sb e n e f i t s , which a r e t h e same t h r o u g h o u t t h e c o u n t r y , a r e t a r g e t e d toward meeting t h e a c u t e h e a l t h c a r e needs of t h e e l d e r l y . Medicare p l a c e s no upper l i m i t on out-of-pocket c o s t s p a i d by b e n e f i c i a r i e s e i t h e r i n c o n n e c t i o n w i t h covered program s e r v i c e s o r f o r a l l out-of-pocket h e a l t h c a r e expenses. The Medicare program i t s e l f t h e r e f o r e c o n t a i n s no c a t a s t r o p h i c coverage p r o v i s i o n s . The combination of c o s t - s h a r i n g c h a r g e s f o r covered Medicare s e r v i c e s ( s e e TABLE 1) coupled w i t h t h e p o t e n t i a l f o r h i g h out-of-pocket payments f o r uncovered s e r v i c e s h a s l e d t h e m a j o r i t y of Medicare b e n e f i c i a r i e s t o p u r c h a s e p r i v a t e i n s u r a n c e coverage t o supplement t h e program's b e n e f i t package. T h i s p r o t e c t i o n , f r e q u e n t l y r e f e r r e d t o a s Medigap c o v e r a g e , i s The p r i n c i p a l purchased by a n e s t i m a t e d 65% of Medicare e n r o l l e e s . p r o t e c t i o n o f f e r e d by t h e m a j o r i t y of t h e s e p o l i c i e s i s coverage o f ~ e d i c a r e ' sd e d u c t i b l e s and c o i n s u r a n c e c h a r g e s . Some Medigap p o l i c i e s c o v e r a l i m i t e d number of a d d i t i o n a l s e r v i c e s n o t covered by Medicare such a s p r e s c r i p t i o n d r u g s . Few p o l i c i e s o f f e r p r o t e c t i o n a g a i n s t t h e c o s t s of p o t e n t i a l l y t h e most c o s t l y s e r v i c e item. long-term i n s t i t u t i o n a l c a r e -- I n 1980, l e g i s l a t i o n was e n a c t e d t h a t provided s t a n d a r d s f o r p o l i c i e s marketed a s Medigap i n s u r a n c e . The l e g i s l a t i o n i n c o r p o r a t e d by r e f e r e n c e t h e Medigap s t a n d a r d s c o n t a i n e d i n a model r e g u l a t o r y program developed by t h e N a t i o n a l A s s o c i a t i o n o f I n s u r a n c e Commissioners (NAIC). I f a S t a t e h a s a d o p t e d laws a n d / o r r e g u l a t i o n s a t l e a s t a s s t r i n g e n t a s t h o s e o f t h e NAIC, p o l i c i e s r e g u l a t e d by t h e S t a t e a r e deemed t o meet F e d e r a l r e q u i r e m e n t s . C u r r e n t l y 46 S t a t e s , t h e D i s t r i c t o f Columbia, and P u e r t o Rico meet t h e s e r e q u i r e m e n t s . Some l o r i n c o m e aged and d i s a b l e d Medicare b e n e f i c i a r i e s a r e a l s o ( T h i s program a l s o c o v e r s c o v e r e d by t h e F e d e r a l - S t a t e Medicaid program. o t h e r l o r i n c o m e p o p u l a t i o n groups i n c l u d i n g f a m i l i e s w i t h dependent c h i l d r e n ) . However, many aged b e n e f i c i a r i e s do n o t become e l i g i b l e f o r Medicaid b e n e f i t s u n t i l a f t e r t h e y become i n s t i t u t i o n a l i z e d and r e d u c e t h e i r incomes and r e s o u r c e s t o t h e Medicaid s t a n d a r d t h r o u g h t h e i r e x p e n d i t u r e s on h e a l t h c a r e . Persons covered by Medicaid a r e e f f e c t i v e l y p r o t e c t e d a g a i n s t t h e c o s t s a s s o c i a t e d w i t h covered program s e r v i c e s . Approximately 20% o f t h e Medicare p o p u l a t i o n h a s no o t h e r h e a l t h i n s u r a n c e coverage. According t o DHHS, t h i s f i g u r e i n c l u d e s o v e r 2 m i l l i o n poor and 6 m i l l i o n n e a r poor e l d e r l y n o t covered by Medicaid. C u r r e n t System I s s u e s Acute Care Focus o f Medicare - Coverage Gaps The o r i g i n a l Medicare program was d e s i g n e d t o meet t h e a c u t e h e a l t h c a r e needs o f t h e e l d e r l y . The a c u t e c a r e f o c u s i s evidenced i n t h e b e n e f i t d e s i g n o f t h e H o s p i t a l I n s u r a n c e ( P a r t A) program and Supplementary Medical I n s u r a n c e ( P a r t B) program. F a i r l y e x t e n s i v e coverage i s provided f o r s h o r t - t e r m h o s p i t a l s t a y s under P a r t A. Coverage f o r long-term h o s p i t a l s t a y s i s l e s s a d e q u a t e . These l o n g s t a y s a r e s u b j e c t t o s i g n i f i c a n t c o i n s u r a n c e c h a r g e s ; f u r t h e r , a b e n e f i c i a r y may p o t e n t i a l l y e x h a u s t a l l b e n e f i t s ( s e e TABLE 1). However, a v e r y small p e r c e n t a g e exceed 60 days of h o s p i t a l c a r e i n a s p e l l of i l l n e s s . (A s p e l l of i l l n e s s i s d e f i n e d a s b e g i n n i n g when a b e n e f i c i a r y e n t e r s a h o s p i t a l and ending when he o r s h e h a s n o t been a n i n p a t i e n t i n a h o s p i t a l o r SNF f o r 60 d a y s ) . An even s m a l l e r p e r c e n t a g e e x h a u s t t h e i r l i f e t i m e r e s e r v e days. B e n e f i c i a r i e s e n r o l l e d i n P a r t B pay a monthly premium ($17.90 a month i n 1987). They a r e a l s o l i a b l e f o r c e r t a i n c h a r g e s i n c o n n e c t i o n w i t h t h e i r u s e o f p h y s i c i a n s and o t h e r s e r v i c e s covered under t h e program ( s e e TABLE 1). A l l b e n e f i c i a r i e s a r e l i a b l e f o r t h e $75 d e d u c t i b l e and 20% c o i n s u r a n c e c h a r g e s . I n a d d i t i o n , where a p h y s i c i a n o r o t h e r p r o v i d e r does n o t a c c e p t "assignment" ( i . e . , a g r e e t o a c c e p t ~ e d i c a r e ' s d e t e r m i n a t i o n of t h e " r e a s o n a b l e charge" amount a s payment i n f u l l f o r covered s e r v i c e s ) , t h e b e n e f i c i a r y i s L i a b l e f o r t h e d i f f e r e n c e between ~ e d i c a r e ' sr e a s o n a b l e charge amount and t h e p h y s i c i a n ' s a c t u a l c h a r g e . ( T h i s i s sometimes r e f e r r e d t o a s t h e "balance b i l l e d " amount.) TABLE 1. Medicare: S u m a r y of B e n e f i t s and A s s o c i a t e d B e n e f i c i a r y Cost-Sharing Charges, 1987 Coverage B e n e f i c i a r y Payments Part A Inpatient Hospital Services P e r s p e l l of i l l n e s s : F i r s t 60 days 61st 9 0 t h day 60 l i f e t i m e r e s e r v e days - - --- a/ - $520 d e d u c t i b l e b_/ $130 d a i l y c o i n s u r a n c e b_/ $260 d a i l y c o i n s u r a n c e b/ P o s t - h o s p i t a l SNF s e r v i c e s F i r s t 20 days 21st 1 0 0 t h day None $65 d a i l y c o i n s u r a n c e Home h e a l t h s e r v i c e s None Hospice s e r v i c e s S u b j e c t t o d u r a t i o n a l l i m i t s and copayments f o r o u t p a t i e n t d r u g s and respite care Blood Cost of t h e f i r s t t h r e e p i n t s - - b/ Part B P h y s i c i a n s 1 s e r v i c e s and o t h e r medical s e r v i c e s a_/ 1 ) $75 d e d u c t i b l e 2) 20% c o i n s u r a n c e 3 ) Amounts i n e x c e s s of r e a s o n a b l e c h a r g e s on unassigned c l a i m s ( b a l a n c e billing) Blood Cost of t h e f i r s t t h r e e p i n t s a l S p e c i a l limits a p p l y w i t h r e s p e c t t o i n p a t i e n t s e r v i c e s i n a h o s p i t a l under P a r t A and o u t p a t i e n t p s y c h i a t r i c p h y s i c i a n ' s payments Limits a r e a l s o applied t o annual s e r v i c e s under P a r t B. f o r p h y s i c a l t h e r a p y s e r v i c e s provided by an independent p r a c t i t i o n e r . .p s -y c h i a t r i c b_/ P a r t A d e d u c t i b l e and c o i n s u r a n c e amounts a r e i n c r e a s e d a n n u a l l y ; c o i n s u r a n c e amounts a r e c a l c u l a t e d a s s p e c i f i e d p e r c e n t a g e s of d e d u c t i b l e . O v e r a l l , Medicare covered 48.8% of t h e a g e d ' s h e a l t h c a r e c o s t s i n 1984. The program's b e n e f i t package e x c l u d e s p r e s c r i p t i o n d r u g s , r o u t i n e e y e e x a m i n a t i o n s , e y e g l a s s e s , h e a r i n g a i d s , d e n t a l c a r e , d e n t u r e s , and most p r e v e n t i v e c a r e . The major gap i n t h e Medicare b e n e f i t package i s c o v e r a g e o f long-term c a r e s e r v i c e s . Nursing home coverage i s l i m i t e d t o s h o r t - t e r m p o s t - h o s p i t a l s t a y s i n s k i l l e d n u r s i n g f a c i l i t i e s (SNFs). As a result, Medicare covered o n l y 2.1% o f t h e n u r s i n g home c o s t s o f t h e aged i n 1984. Home h e a l t h c a r e i s covered o n l y when a b e n e f i c i a r y can be shown t o need i n t e r m i t t e n t s k i l l e d nursing c a r e o r physical o r speech therapy. Many c h r o n i c a l l y i l l p e r s o n s do n o t need s k i l l e d c a r e t o remain i n t h e i r homes b u t r a t h e r c u s t o d i a l c a r e and a s s i s t a n c e w i t h d a i l y r o u t i n e s ; home h e a l t h s e r v i c e s f o r t h e s e p e r s o n s a r e n o t covered by Medicare. Beneficiary L i a b i l i t y The C o n g r e s s i o n a l Budget O f f i c e e s t i m a t e s t h a t l i a b i l i t i e s f o r Medicare copayments w i l l a v e r a g e $456 i n 1987; an a d d i t i o n a l $105 r e p r e s e n t s a v e r a g e l i a b i l i t y f o r b a l a n c e b i l l i n g c h a r g e s by p h y s i c i a n s . Thus t o t a l p e r c a p i t a l i a b i l i t i e s i n c o n n e c t i o n w i t h covered s e r v i c e s a r e an e s t i m a t e d $561. However, t h e l i a b i l i t y f o r Medicare c o s t - s h a r i n g Copayment c h a r g e s i s n o t d i s t r i b u t e d e v e n l y throughout t h e p o p u l a t i o n . l i a b i l i t i e s a r e h i g h e s t f o r t h o s e w i t h i n p a t i e n t s t a y s and t h o s e w i t h renal disease. For t h o s e w i t h one i n p a t i e n t s t a y , t h e a v e r a g e l i a b i l i t y i s $1,335. I n a d d i t i o n t o Medicare-related l i a b i l i t i e s , b e n e f i c i a r i e s a r e l i a b l e f o r additional health care costs. I n 1984, t o t a l p e r c a p i t a s p e n d i n g by O f t h i s amount, $1,059 ( o r 25.2% o f t h e aged f o r h e a l t h c a r e was $4,202. t h e t o t a l ) r e p r e s e n t e d out-of-pocket payments by t h e e l d e r l y . These out-of-pocket f i g u r e s do n o t i n c l u d e t h e a d d i t i o n a l amounts s p e n t by t h e e l d e r l y f o r payment of P a r t B premiums o r p r i v a t e i n s u r a n c e premiums. These f i g u r e s a r e a v e r a g e s and may be h i g h e r o r lower f o r i n d i v i d u a l b e n e f i c i a r i e s depending on i n d i v i d u a l c i r c u m s t a n c e s such a s a g e , income l e v e l , i n c i d e n c e of a c u t e i l l n e s s , t h e p r e s e n c e of c h r o n i c c o n d i t i o n s , and o t h e r i n s u r a n c e coverage. Long-Term Care Medicare o f f e r s l i m i t e d p r o t e c t i o n f o r t h e c o s t s of n u r s i n g home c a r e and a l m o s t no p r o t e c t i o n f o r t h e c o s t s of c u s t o d i a l c a r e s e r v i c e s r e q u i r e d Nursing home by c h r o n i c a l l y i l l p e r s o n s o v e r an extended time p e r i o d . c a r e c o s t s a n e s t i m a t e d $22,000 p e r person p e r y e a r . I n 1984, 50% o f a l l n u r s i n g home e x p e n s e s f o r t h e e l d e r l y were p a i d out-of-pocket. The F e d e r a l - S t a t e Medicaid program picked up 42% w h i l e Medicare covered o n l y 2% of such expenses. S i x p e r c e n t came from a combination o f o t h e r A t the Government and p r i v a t e s o u r c e s w i t h 1% p a i d f o r by i n s u r a n c e . p r e s e n t time, few i n s u r a n c e companies ( s u r v e y s e s t i m a t e between 12 and 3 8 ) w r i t e more comprehensive long-term c a r e i n s u r a n c e p o l i c i e s . There a r e c o n s i d e r a b l e v a r i a t i o n s among t h e s e p o l i c i e s which c o v e r a n e s t i m a t e d 50,000 t o 150,000 p e r s o n s . S i n c e t h e r e i s l i m i t e d coverage of long-term c a r e s e r v i c e s under Medicare o r most p r i v a t e i n s u r a n c e p o l i c i e s , Medicaid h a s become t h e p r i m a r y s o u r c e o f t h i r d - p a r t y f i n a n c i n g of long-term c a r e s e r v i c e s . I n d i v i d u a l s c a n o n l y g a i n coverage under Medicaid a f t e r t h e y have reduced t h e i r incomes and r e s o u r c e s t o t h e S t a t e - e s t a b l i s h e d e l i g i b i l i t y l e v e l s . Many e l d e r l y a t r i s k of needing long-term c a r e s e r v i c e s f a c e t h e p r o s p e c t of i m p o v e r i s h i n g themselves t o t h e s e w e l f a r e l e v e l s . Types o f C a t a s t r o p h i c P r o p o s a l s G e n e r a l l y t h e p r o p o s a l s which have been o f f e r e d t o expand p r o t e c t i o n f o r t h e aged would b u i l d on t h e e x i s t i n g Medicare program. Most of t h e p r o p o s a l s which have been o f f e r e d would p l a c e a n upper l i m i t on b e n e f i c i a r y l i a b i l i t y f o r Medicare d e d u c t i b l e s and c o i n s u r a n c e ; t h e y would a l s o remove t h e l i m i t on covered i n p a t i e n t h o s p i t a l days. Some p r o p o s a l s would a l s o a t t e m p t t o p r o v i d e p r o t e c t i o n a g a i n s t some of t h e c o s t s c u r r e n t l y n o t covered under Medicare ( f o r example, p r e s c r i p t i o n d r u g s ) . Few of t h e p r o p o s a l s i n c l u d e long-term i n s t i t u t i o n a l c a r e e x p e n d i t u r e s i n t h e b e n e f i t package. Those who f a v o r o f f e r i n g c a t a s t r o p h i c i n s u r a n c e c o v e r a g e s u g g e s t t h a t t h e r e a r e gaps i n h e a l t h c a r e coverage of t h e e l d e r l y t h a t a r e n o t b e i n g met. T h i s i s p a r t i c u l a r l y s o f o r t h e 20% of t h e Medicare p o p u l a t i o n t h a t h a s no supplementary coverage; most of t h e s e p e r s o n s a r e poor and nearpoor e l d e r l y t h a t may be unable t o a f f o r d Medigap i n s u r a n c e . Those who f a v o r expanding t h e F e d e r a l r o l e a l s o n o t e t h a t an a d m i n i s t r a t i v e s t r u c t u r e i s a l r e a d y i n p l a c e t o implement a n expanded b e n e f i t . Those who oppose expanding t h e F e d e r a l r o l e n o t e t h a t t h e m a j o r i t y of Medicare b e n e f i c i a r i e s have supplementary coverage, p r i m a r i l y t h r o u g h Medigap policies. They s u g g e s t t h a t e f f o r t s s h o u l d be made t o expand r a t h e r t h a n s u p p l a n t t h e r o l e of t h e p r i v a t e s e c t o r . One of t h e key concerns i n d e s i g n i n g a c a t a s t r o p h i c p l a n i s how t h e p l a n would b e f i n a n c e d . The A d m i n i s t r a t i o n p l a n , t h e House-passed b i l l and t h e b i l l r e p o r t e d by t h e S e n a t e Finance C o w i t t e e ( s e e below) a r e budget n e u t r a l , i.e. no a d d i t i o n a l g e n e r a l revenue i s r e q u i r e d f o r t h e p e r i o d f o r which t h e c o s t e s t i m a t e i s made. The A d m i n i s t r a t i o n b i l l would s p r e a d t h e a d d i t i o n a l c o s t a c r o s s a l l b e n e f i c i a r i e s i n t h e form of The b i l l s passed by t h e House and r e p o r t e d by i n c r e a s e d P a r t B premiums. t h e S e n a t e F i n a n c e Committee would o f f e r c e r t a i n e x p a n s i o n s i n b e n e f i t s i n a d d i t i o n c a t a s t r o p h i c coverage. Financing f o r t h e s e measures would be t h r o u g h a combination of a n i n c r e a s e i n t h e P a r t B premium and a n incomer e l a t e d premium f o r t h e e s t i m a t e d 40% of b e n e f i c i a r i e s w i t h t a x l i a b i l i t y . (The c a l c u l a t i o n s d i f f e r c o n s i d e r a b l y between t h e House and S e n a t e versions.) I f approved, t h i s would mark t h e f i r s t time t h a t b e n e f i c i a r y payments f o r s e r v i c e s would be t i e d t o income. Administration Actions I n h i s February 1986 S t a t e of t h e Union Message, t h e P r e s i d e n t a s k e d S e c r e t a r y O t i s Bowen of DHHS t o examine t h e i s s u e of c a t a s t r o p h i c p r o t e c t i o n f o r a l l age groups ( n o t j u s t f o r t h e Medicare p o p u l a t i o n ) and r e p o r t recommendations t o him by t h e end of t h e y e a r . S e c r e t a r y Bowen t r a n s m i t t e d t h e Department's Report t o t h e P r e s i d e n t , " C a t a s t r o p h i c I l l n e s s Expenses", i n November 1986. T h i s r e p o r t i d e n t i f i e d t h r e e major c o m p o n e n t s o f t h e c a t a s t r o p h i c c o v e r a g e p r o b l e m , namely, a c u t e c a t a s t r o p h i c p r o t e c t i o n f o r t h e e l d e r l y , long-term c a r e p r o t e c t i o n It a l t e r n a t i v e s ; and c a t a s t r o p h i c p r o t e c t i o n f o r t h e g e n e r a l p o p u l a t i o n . i d e n t i f i e d t h e p o l i c y o p t i o n s f o r e a c h component and p r e s e n t e d p r e f e r r e d alternatives. The r e p o r t recomnended p l a c i n g an annual l i m i t on e a c h Medicare b e n e f i c i a r y ' s out-of-pocket expenses f o r a l l P a r t A and P a r t B d e d u c t i b l e s and c o i n s u r a n c e . P a r t A c o i n s u r a n c e f o r i n p a t i e n t h o s p i t a l and c o v e r e d SNF d a y s would be e l i m i n a t e d and t h e maximum number o f h o s p i t a l d e d u c t i b l e s would be s e t a t two p e r y e a r . C a t a s t r o p h i c coverage w i t h a $2,000 a n n u a l l i m i t on d e d u c t i b l e s and c o i n s u r a n c e would r e q u i r e a n a d d i t i o n a l annual premium of $59. T h i s c o s t , i . e . , $4.92/month would b e The b e n e f i t would be f u l l y funded by t h e added t o t h e P a r t B premium. premium and be indexed a n n u a l l y . The S e c r e t a r y e s t i m a t e d t h a t 1.4 m i l l i o n p e r s o n s would i n c u r program-related expenses i n e x c e s s of $2,000 i n 1987. The P r e s i d e n t s u b m i t t e d t h e A d m i n i s t r a t i o n p r o p o s a l on Feb. 24, 1987 I t i n c o r p o r a t e d t h e Medicare ( i n t r o d u c e d a s H.R.1245 and S.592). It did c a t a s t r o p h i c c o v e r a g e p r o p o s a l r e c o w e n d e d i n t h e Bowen Report. n o t i n c l u d e any p r o v i s i o n s r e l a t i n g t o long-term c a r e o r c o v e r a g e of a c u t e c a t a s t r o p h i c expenses of t h e n o n - e l d e r l y p o p u l a t i o n . C o n g r e s s i o n a l Action House On J u l y 22, 1987, t h e House passed H.R. 2470, t h e Medicare C a t a s t r o p h i c P r o t e c t i o n Act of 1987. T h i s l e g i s l a t i o n was o r i g i n a l l y r e p o r t e d by t h e Ways and Means Committee. I t was amended by t h e Energy and C o m e r c e Committee which added a number of p r o v i s i o n s i n c l u d i n g a c a t a s t r o p h i c p r e s c r i p t i o n drug b e n e f i t . The Ways and Means Committee s u b s e q u e n t l y r e p o r t e d a d i f f e r e n t v e r s i o n of t h e c a t a s t r o p h i c drug A compromise package was i n t r o d u c e d a s H.R. 2941. The t e x t o f benefit. H.R. 2941 w a s s u b s t i t u t e d f o r t h e t e x t of H.R. 2470 and p a s s e d t h e House a s 8.8. 2470. The major p r o v i s i o n s of t h e b i l l a r e a s f o l l o w s : I n p a t i e n t Hospital Services. S p e c i f i e s a maximum of one h o s p i t a l d e d u c t i b l e p e r y e a r and e l i m i n a t e s t h e d u r a t i o n a l l i m i t s , c o i n s u r a n c e c h a r g e s , and s p e l l of i l l n e s s p r o v i s i o n s . S k i l l e d Mursing F a c i l i t y S e r v i c e s . R e q u i r e s d a i l y payments f o r t h e f i r s t seven days e q u a l t o t h e n a t i o n a l a v e r a g e Medicare r e a s o n a b l e c o s t f o r SNF c a r e ( e s t i m a t e d a t $24/day i n 1988); e l i m i n a t e s c o i n s u r a n c e f o r 21st-100th days; adds coverage f o r up t o 150 days and e l i m i n a t e s t h e p r i o r h o s p i t a l i z a t i o n r e q u i r e m e n t e f f e c t i v e J a n . 1, 1989. Home H e a l t h S e r v i c e s . T r a n s f e r s b e n e f i t t o P a r t B program w i t h no change i n reimbursement p o l i c i e s ; expands t h e " i n t e r m i t t e n t " s k i l l e d n u r s i n g c a r e d e f i n i t i o n s o t h a t " d a i l y " would be d e f i n e d a s up t o 7 days a week f o r 35 days i n any g i v e n p e r i o d ( i n s t e a d o f 5 days a week f o r up t o 2 o r 3 weeks). O u t p a t i e n t Mental H e a l t h S e r v i c e . from $250 t o $1,000 p e r y e a r . R a i s e s t h e maximum payment Provides a $1,043 L i m i t a t i o n on Out-of-Pocket P a r t B Expenses. c a t a s t r o p h i c l i m i t on P a r t B expenses i n 1989 t o be indexed by t h e COLA i n f u t u r e y e a r s ; s p e c i f i e s t h a t expenses c o u n t i n g toward t h e c a p a r e t h e P a r t B d e d u c t i b l e , P a r t B blood d e d u c t i b l e , $250 of r e i m b u r s a b l e mental h e a l t h e x p e n s e s , and t h e 20% P a r t B c o i n s u r a n c e . Respite Services. Covers up t o 80 h o u r s a y e a r of in-home b e n e f i t s f o r c h r o n i c a l l y dependent p e r s o n s a s a r e s p i t e f o r u n p a i d i n d i v i d u a l s who l i v e w i t h and c a r e f o r such p e r s o n s . B e n e f i t e x p i r e s 12/31/91. C a t a s t r o p h i c P r e s c r i p t i o n Drug B e n e f i t . Establishes a separate c a t a s t r o p h i c p r e s c r i p t i o n d r u g program which would pay 803 of t h e c o s t s of o u t p a t i e n t p r e s c r i p t i o n d r u g s a f t e r a b e n e f i c i a r y S e t s t h e d e d u c t i b l e a t $500 i n 1980; had m e t t h e d e d u c t i b l e . s e t s t h e i n c r e a s e f o r 1990 and 1991 e q u a l t o t h e medical c a r e component o f t h e consumer p r i c e index (CPI). S p e c i f i e s t h a t t h e i n c r e a s e i n f u t u r e y e a r s would be t i e d t o t h e i n c r e a s e i n t h e covered o u t p a t i e n t drug index developed by t h e S e c r e t a r y . Beginning i n 1991, t h e d e d u c t i b l e amount would be f u r t h e r i n c r e a s e d , i f n e c e s s a r y , t o a s s u r e no premium i n c r e a s e of g r e a t e r t h a n 20 p e r c e n t . Payment would e q u a l t h e a c t u a l c h a r g e s u b j e c t t o s p e c i f i e d l i m i t s w i t h no a d d i t i o n a l c o s t - s h a r i n g by the beneficiary. Financing. The a d d i t i o n a l b e n e f i t s would be f i n a n c e d t h r o u g h m o d i f i c a t i o n s t o t h e e x i s t i n g P a r t B premiums p l u s t h e a d d i t i o n of a supplemental premium. P a r t B Premium. Provides f o r t h e following a d d i t i o n s t o t h e oremium amount o t h e r v i s e c a l c u l a t e d : 1 ) - a n i n c r e a s e of' $1.00 i n 1991 and $1.30 i n 1992; 2 ) an a d d i t i o n a l premium amount f o r t h e p r e s c r i p t i o n drug b e n e f i t of $2.30 i n 1989; i n subsequent y e a r s t h e amount i s t o e q u a l 75% of c o s t s of t h e b e n e f i t e x c e p t t h a t i t may n o t exceed $3.40 i n 1990 n o r i n c r e a s e by more t h a n 20% i n subsequent y e a r s ; 3 ) a n a d d i t i o n a l premium f o r in-home c a r e b e n e f i t e q u a l t o 100% of t h e c o s t s ; i t may n o t exceed $0.30 i n 1989, $0.50 i n 1990, nor i n c r e a s e by more t h a n 20% i n t h e subsequent y e a r . A. B. Supplemental Premium. Imposes a supplement a 1 Medicare premium, a d m i n i s t e r e d t h r o u g h t h e income t a x system, on e a c h person e n t i t l e d t o Medicare P a r t A whose a d j u s t e d g r o s s income (AGI) i s o v e r a s p e c i f i e d amount. I n 1988, t h e premium i s imposed on p e r s o n s w i t h a n A G I o v e r $6,000. The maximum premium i n 1988 i s $580. I n f u t u r e y e a r s t h e amounts i n t h e income c a t e g o r i e s would be i n c r e a s e d by t h e c o s t of l i v i n g a d j u s t m e n t used t o a d j u s t t h e income t a x b r a c k e t s . The premium amounts would be a d j u s t e d e a c h y e a r by t h e i n c r e a s e i n t h e s u b s i d i z e d p o r t i o n of Medicare and t h e p r e s c r i p t i o n drug f a c t o r . Medicaid. R e q u i r e s Medicaid programs t o pay Medicare c o s t s h a r i n g c h a r g e s f o r a l l e l d e r l y and d i s a b l e d below 100% of poverty l i n e . I n a d d i t i o n , t h e b i l l would r e q u i r e S t a t e s t o a l l o w s p o u s e s of i n s t i t u t i o n a l i z e d persons t o r e t a i n more income and a s s e t s f o r t h e i r maintenance needs. Medigap P o l i c i e s . Requires the Secretary, taking i n t o c o n s i d e r a t i o n t h e recommendations of t h e N a t i o n a l A s s o c i a t i o n of I n s u r a n c e Commissioners and t h e new c a t a s t r o p h i c l e g i s l a t i o n , t o r e p o r t t o Congress w i t h i n 150 d a y s of e n a c t m e n t on recommendations f o r change i n Federal c e r t i f i c a t i o n requirements. Companies i s s u i n g Medigap p o l i c i e s would b e r e q u i r e d t o n o t i f y b e n e f i c i a r i e s of improved Medicare coverage. Jan. 1, 1988 f o r P a r t A b e n e f i t changes; E f f e c t i v e Dates. J a n . 1, 1989 f o r P a r t B b e n e f i t changes ( i n c l u d i n g c a t a s t r o p h i c l i m i t ) and t h e d r u g b e n e f i t ; and t a x a b l e y e a r s ending a f t e r Dec. 31, 1987 f o r supplemental premium t a x . Senate On J u l y 27, 1987, t h e S e n a t e Finance C o w i t t e e r e p o r t e d S. 1127, t h e " ~ e d i c a r e C a t a s t r o p h i c Loss P r e v e n t i o n Act of 1987." The f o l l o w i n g i s a s u m a r y of t h e major p r o v i s i o n s : C a t a s t r o p h i c Plan. A l l p e r s o n s e n r o l l i n g i n P a r t B a r e a u t o m a t i c a l l y e n r o l l e d i n t h e c a t a s t r o p h i c i n s u r a n c e program. An a n n u a l l i m i t of $1,700 i s p l a c e d on out-of-pocket expenses f o r P a r t A and P a r t B services; t h e c a p i s indexed by t h e COLA i n f u t u r e y e a r s . ( B e n e f i c i a r y e x p e n s e s f o r t h e f o l l o w i n g i t e m s , which a r e n o t c o v e r e d program s e r v i c e s , count toward t h e cap: iwunosuppressive drugs a f t e r t h e f i r s t y e a r a f t e r a t r a n s p l a n t and p e r i o d i c mammography and c o l o r e c t a l exams. ) H o s p i t a l and W F b e n e f i t s . For p e r s o n s e n r o l l e d i n P a r t B , t h e d u r a t i o n a l l i m i t s and c o i n s u r a n c e c h a r g e s a r e e l i m i n a t e d f o r h o s p i t a l s e r v i c e s and SNF coverage i s extended t o 150 days. Only one i n p a t i e n t h o s p i t a l d e d u c t i b l e i s r e q u i r e d p e r y e a r ; t h e 3 day p r i o r h o s p i t a l i z a t i o n r e q u i r e m e n t i s e l i m i n a t e d f o r SNF s e r v i c e s , and c o i n s u r a n c e ( e q u a l t o 15% o f n a t i o n a l a v e r a g e c o s t p e r d a y ) i s c h a r g e d f o r d a y s 1-10 of SNF c a r e . C u r r e n t law p r o v i s i o n s r e l a t i n g t o c o v e r a g e of h o s p i t a l and SNF s e r v i c e s would a p p l y t o p e r s o n s n o t e n r o l l i n g i n P a r t B. Home h e a l t h and h o s p i c e c a r e . A l l b e n e f i c i a r i e s would be e n t i t l e d t o up 45 d a y s of d a i l y c a r e i f t h e y have r e c e n t l y been i n a h o s p i t a l o r SNF. C u r r e n t law i s c l a r i f i e d t o a s s u r e a l l b e n e f i c i a r i e s may r e c e i v e up t o 21 days of d a i l y c a r e . The 210 day l i m i t on h o s p i c e care i s eliminated f o r a l l beneficiaries. Drug Study. The I n s t i t u t e of Medicine i s t o s t u d y p o s s i b l e c o v e r a g e o r c a t a s t r o p h i c coverage of p r e s c r i p t i o n drugs. Financing. C a t a s t r o p h i c b e n e f i t s a r e f i n a n c e d t h r o u g h a combination o f a n i n c r e a s e o f $4.00 i n 1988 i n t h e P a r t B premium ( i n c r e a s e d i n f u t u r e y e a r s by t h e p e r c a p i t a i n c r e a s e i n a c t u a r i a l c o s t s ) and a n income-related supplemental premium f o r t h o s e w i t h income t a x l i a b i l i t y . The maximum premium would be $800 i n 1988. Medicaid. S t a t e s must u s e Medicaid s a v i n g s t o expand c o v e r a g e f o r low-income Medicare b e n e f i c i a r i e s o r s u p p o r t i n i t i a t i v e s d e a l i n g w i t h s p o u s a l impoverishment. Medigap. Changes t o model s t a n d a r d s made w i t h i n 90 days by N a t i o n a l A s s o c i a t i o n of I n s u r a n c e Commissioners would be adopted. I f changes n o t made w i t h i n 90 d a y s , t h e S e c r e t a r y would i s s u e r e v i s e d s t a n d a r d s t o be e f f e c t i v e one y e a r l a t e r . The S e c r e t a r y i s r e q u i r e d t p r o v i d e i n f o r m a t i o n t o consumers t h a t w i l l permit them t o a s s e s s t h e v a l u e of Medigap p o l i c i e s t o them and t h e r e l a t i o n s h i p of such p o l i c i e s t o Medicare coverage. H.R. 65 ( P e p p e r ) M e d i c a r e P a r t C: C a t a s t r o p h i c H e a l t h I n s u r a n c e Act o f 1987. E s t a b l i s h e s a program t o p r o v i d e comprehensive s e r v i c e s ( i n c l u d i n g long-term c a r e , p r e s c r i p t i o n d r u g s , and e l i m i n a t i o n of c u r r e n t copayment r e q u i r e m e n t s ) t o Medicare e l i g i b l e s through p r e p a i d h e a l t h p l a n s . Funds program t h r o u g h a combination of b e n e f i c i a r y premiums ( s u b j e c t t o a n income-related l i m i t ) and t r a n s f e r s of amounts which would o t h e r w i s e have been expended under Medicare. I n t r o d u c e d Jan. 6, 1987; r e f e r r e d t o Committees on Ways and Means, and Energy and Commerce. 200 (Roybal) H e a l t h Program Act. E s t a b l i s h e s U.S. H e a l t h program which p r o v i d e s c a t a s t r o p h i c and b a s i c h e a l t h p r o t e c t i o n f o r a l l Americans ( i n c l u d i n g c u r r e n t Medicare b e n e f i c i a r i e s ) r e g a r d l e s s of a g e o r income. P r o v i d e s f o r f u n d i n g from b e n e f i c i a r y c o i n s u r a n c e and copayments ( w i t h c a t a s t r o p h i c l i m i t s ) , e x t e n s i o n o f h o s p i t a l i n s u r a n c e t a x e s t o a l l wages, c o n t i n u a t i o n o f P a r t B premium, e x c i s e t a x e s o n wages, S t a t e c o n t r i b u t i o n s , i n c r e a s e d c i g a r e t t e t a x e s , and t a x s u r c h a r g e . Introduced Jan. 6 , 1987; r e f e r r e d t o Committees on Ways and Means, and Energy and Comnerce H.R. U.S. . H.R. 406 (Roe) E s t a b l i s h e s a n a t i o n a l c a t a s t r o p h i c i l l n e s s i n s u r a n c e program u n d e r which t h e F e d e r a l Government, a c t i n g i n c o o p e r a t i o n w i t h S t a t e i n s u r a n c e a u t h o r i t i e s and t h e p r i v a t e i n s u r a n c e i n d u s t r y , w i l l r e i n s u r e and o t h e r w i s e encourage t h e i s s u a n c e of p r i v a t e h e a l t h i n s u r a n c e p o l i c i e s which make a d e q u a t e p r o t e c t i o n a v a i l a b l e t o a l l Americans a t a r e a s o n a b l e cost. I n t r o d u c e d J a n . 6 , 1987; r e f e r r e d t o Cornnittee on Energy and Commerce. H.R. 678, H.R. 679, and B.R. 680 ( O a k a r ) H.R. 678 adds a n o p t i o n a l Medicare P a r t C, funded by a combination of b e n e f i c i a r y premiums and a p o r t i o n of tobacco e x c i s e t a x e s , p r o v i d i n g c o v e r a g e f o r c e r t a i n v i s i o n , h e a r i n g , and d e n t a l s e r v i c e s and p r e s c r i p t i o n drugs. H . R. 679 p r o v i d e s Medicare coverage f o r hospital-based H.R. 680 a u t h o r i z e s a v o l u n t a r y i n s u r a n c e comprehensive c a r e programs. o p t i o n , p a i d by b e n e f i c i a r y premiums, f o r coverage o f most Medicare c o s t - s h a r i n g c h a r g e s and one annual p r e v e n t i v e h e a l t h c a r e v i s i t . I n t r o d u c e d Jan. 21, 1987; r e f e r r e d t o Committees on Ways and Means, and Energy and Commerce. H.R. 784 (Bonker) Supplementary Medical I n s u r a n c e Improvements Act of 1987. Amends Medicare P a r t B t o p r o v i d e two v o l u n t a r y i n s u r a n c e o p t i o n s f o r Medicare b e n e f i c i a r i e s t o be p a i d f o r by b e n e f i c i a r y premiums. The f i r s t o p t i o n would c o v e r n e a r l y a l l c u r r e n t Medicare c o s t - s h a r i n g r e q u i r e m e n t s ; t h e second o p t i o n would c o v e r o u t p a t i e n t p r e s c r i p t i o n d r u g s f o r c h r o n i c illness. I n t r o d u c e d Jan. 28, 1987; r e f e r r e d t o Committees on Ways and Means, and Energy and Comnerce. H.R. 955 ( S l a u g h t e r ) H e a l t h Care Savings Account Act of 1987. Amends t h e I n t e r n a l Revenue Code t o a l l o w i n d i v i d u a l s a c r e d i t a g a i n s t income t a x f o r amounts c o n t r i b u t e d t o a h e a l t h c a r e s a v i n g s account and t o amend Medicare t o p r o v i d e f o r a h i g h d e d u c t i b l e and p r o t e c t i o n a g a i n s t c a t a s t r o p h i c m e d i c a l c a r e e x p e n s e s f o r i n d i v i d u a l s who have e s t a b l i s h e d s u c h a c c o u n t s . I n t r o d u c e d Feb. 4 , 1987; r e f e r r e d t o Committees on Ways and Means, and Energy and Commerce. H.R. 1182 (Regula and G a l l o ) H e a l t h S e r v i c e s Act of 1987. Amends t h e I n t e r n a l Revenue Code t o a l l o w i n d i v i d u a l s a d e d u c t i o n from g r o s s income f o r c o n t r i b u t i o n s t o a h e a l t h s e r v i c e s s a v i n g s account; amends Medicare t o e s t a b l i s h a l i m i t e d o p t i o n f o r c a t a s t r o p h i c c a r e ; and amends Medicaid t o e s t a b l i s h a p u b l i c f p r i v a t e program t o p r o v i d e h e a l t h s e r v i c e s t o t h e m e d i c a l l y uninsured. I n t r o d u c e d Feb. 19, 1987; r e f e r r e d t o Coamittees on Ways and Means and Energy and Commerce. H.R. 1245 ( H i t c h e l et a l . )IS. 592 (Dole e t al.) A d m i n i s t r a t i o n b i l l , Medicare C a t a s t r o p h i c I l l n e s s Coverage Act. Removes P a r t A c o i n s u r a n c e f o r i n p a t i e n t h o s p i t a l and covered SNF days and Places s e t s t h e maximum number of h o s p i t a l d e d u c t i b l e s a t two p e r y e a r . an a n n u a l l i m i t $2,000 i n 1988 on e a c h b e n e f i c i a r y ' s out-of-pocket e x p e n s e s f o r a l l P a r t A and P a r t B d e d u c t i b l e s and c o i n s u r a n c e . P r o v i d e s t h a t t h e f u l l c o s t o f t h e b e n e f i t would be added t o t h e P a r t B premium and - - indexed a n n u a l l y . H.R. 1245 i n t r o d u c e d Feb. 25, 1987; r e f e r r e d t o Comnittees on Energy and Commerce, and Ways and Means. S. 592 i n t r o d u c e d Feb. 26, 1987; r e f e r r e d t o Committee on Finance. H . R . 1760, H.R. 1761, and H.R. 1762 (Uaxman and S t a r k ) H.R. 1760 amends Medicaid t o r e q u i r e S t a t e s t o p r o v i d e f o r payment of Medicare premiums, d e d u c t i b l e s and c o s t - s h a r i n g f o r Medicare b e n e f i c i a r i e s H.R. 1761 would make such coverage o p t i o n a l w i t h incomes below poverty. f o r b e n e f i c i a r i e s below 150% of poverty. H.R. 1762 would permit S t a t e s t o c o v e r under Medicaid p r e s c r i p t i o n d r u g s f o r e l d e r l y p e r s o n s w i t h incomes up t o 150% o f poverty. I n t r o d u c e d Mar. 23, 1987; r e f e r r e d t o Committee on Energy and Commerce. 8.8. 1930 (Roybal and G a r c i a ) Medicare and Medicaid C a t a s t r o p h i c Acute and T r a n s i t i o n a l Care Act. P r o v i d e s f o r expanded a c u t e and t r a n s i t i o n a l coverage under a F e d e r a l Medigap I n s u r a n c e program; expands Medicaid p r o t e c t i o n ; and p r o v i d e s f o r f u n d i n g t h r o u g h a combination of a F e d e r a l e x c i s e t a x on c i g a r e t t e s , Introduced F e d e r a l t a x s u r c h a r g e , and a n add-on t o t h e P a r t B premium. Apr. 2 , 1987; r e f e r r e d t o Comnittees on Ways and Means and Energy and Commerce . H . R . 2470 ( S t a r k e t a l . ) Medicare C a t a s t r o p h i c P r o t e c t i o n Act of 1987. L i m i t s t h e i n p a t i e n t h o s p i t a l d e d u c t i b l e t o one p e r y e a r ; e l i m i n a t e s t h e d u r a t i o n a l l i m i t s on and c o i n s u r a n c e charges f o r i n p a t i e n t h o s p i t a l s e r v i c e s . Limits c o i n s u r a n c e c h a r g e s f o r p o s t - h o s p i t a l SNF s e r v i c e s t o t h e f i r s t 7 days; p r o v i d e s t h a t t h e c o i n s u r a n c e c h a r g e be s e t a t a l e v e l e q u a l t o 20% of t h e e s t i m a t e d n a t i o n a l a v e r a g e c o s t ; and p r o v i d e s f o r 150 days of p o s t - h o s p i t a l SNF b e n e f i t s p e r y e a r . E s t a b l i s h e s a n annual out-of-pocket l i m i t on b e n e f i c i a r y ' s payments f o r P a r t B d e d u c t i b l e s and c o i n s u r a n c e a t $1,043 i n 1989 w i t h annual u p d a t e s e q u a l t o t h e s o c i a l s e c u r i t y c o s t - o f l i v i n g adjustment. E s t a b l i s h e s a c a t a s t r o p h i c p r e s c r i p t i o n drug b e n e f i t . Clean b i l l i n t r o d u c e d May 1 9 , 1987; r e f e r r e d t o Committees on Ways and Means and Energy and Commerce. ( R e f l e c t s Ways and Means Committee markup of B.R. 1270 and H.R. 1271.) Reported by Ways and Means Committee May 22, 1987. Amended by Energy and Commerce C o r n i t t e e , June 17, 1987. Committee on Ways and Means approved f r e e - s t a n d i n g drug amendment June 24, 1987. Clean b i l l (H.R. 2941) i n t r o d u c e d J u l y 15, 1987. Text o f H.R. 2941 2470; passed House a s H.R. 2470 J u l y 22, s u b s t i t u t e d f o r t e x t of H.R. 1987. S. 210 (Kennedy) Amends t h e P u b l i c H e a l t h S e r v i c e Act t o p r o v i d e v o l u n t a r y c a t a s t r o p h i c h e a l t h i n s u r a n c e p r o t e c t i o n f o r aged and d i s a b l e d t o be f i n a n c e d by e n r o l l e e premiums. Payment would be made a f t e r an i n d i v i d u a l i n c u r r e d $2,000 i n out-of-pocket expenses f o r r e a s o n a b l e c o s t s o r c h a r g e s i n c o n n e c t i o n w i t h s p e c i f i e d s e r v i c e s (comparable t o t h e Medicare b e n e f i t package). I n t r o d u c e d Jan. 6 , 1987; r e f e r r e d t o Committee on Labor and Human Resources. S. 454 ( S a s s e r ) E s t a b l i s h e s a program t o p r o v i d e comprehensive s e r v i c e s ( i n c l u d i n g long-term c a r e and e l i m i n a t i o n o f c u r r e n t copayment r e q u i r e m e n t s ) t o Medicare e l i g i b l e s t h r o u g h p r e p a i d h e a l t h plans. Funds program t h r o u g h a combination o f b e n e f i c i a r y premiums ( s u b j e c t t o an income-related l i m i t ) and t r a n s f e r s of amounts which would o t h e r w i s e have been expended under Medicare. I n t r o d u c e d Feb. 4 , 1987; r e f e r r e d t o Comnittee on Finance. ole e t al.) S. 754 Medicare C a t a s t r o p h i c I l l n e s s Coverage Act. Provides, f o r persons $1,800 i n 1988 on e a c h e n r o l l e d i n P a r t B , f o r : a n annual l i m i t b e n e f i c i a r y ' s out-of-pocket expenses f o r P a r t A and B d e d u c t i b l e s and c o i n s u r a n c e , f o r e l i m i n a t i o n of i n p a t i e n t h o s p i t a l and SNF copayments, e l i m i n a t i o n of l i f e t i m e l i m i t s on i n p a t i e n t h o s p i t a l d a y s , and o n l y one h o s p i t a l d e d u c t i b l e i n any one y e a r . Provides t h a t reasonable charges f o r inmunosuppressive d r u g s f o r t r a n s p l a n t p a t i e n t s can count toward t h e c a p b e g i n n i n g i n t h e second y e a r . Finances program t h r o u g h a c t u a r i a l l y Expands t h e home h e a l t h b e n e f i t t o 21 d a y s of sound P a r t B premium. c o n t i n u o u s c a r e . R e q u i r e s t h e S e c r e t a r y t o r e q u e s t from t h e I n s t i t u t e o f Medicine a s t u d y t o i d e n t i f y o t h e r p r e s c r i p t i o n d r u g s which might c o u n t toward t h e cap. I n t r o d u c e d Mar. 17, 1987; r e f e r r e d t o Committee on Finance. - - S, 1127 (Bentsen e t a l e ) Medicare C a t a s t r o p h i c Loss P r e v e n t i o n Act. Provides, f o r persons $1,700 i n 1988 on e a c h e n r o l l e d i n P a r t B , f o r : a n annual l i m i t b e n e f i c i a r y ' s out-of-pocket expenses f o r t h e P a r t A d e d u c t i b l e and c o i n s u r a n c e ; e l i m i n a t i o n o f i n p a t i e n t h o s p i t a l c o i n s u r a n c e and d u r a t i o n a l l i m i t s ; a maximum of one i n p a t i e n t h o s p i t a l d e d u c t i b l e p e r y e a r ; 150 d a y s of SNF c a r e p e r y e a r ; SNF c o i n s u r a n c e c h a r g e s on f i r s t 10 days of c a r e ( b u t no more t h a n 10 days a y e a r ) ; and r e v i s e d c a l c u l a t i o n of SNF c o i n s u r a n c e changes. Finances coverage through: a ) a $4 monthly i n c r e a s e ( i n d e x e d a n n u a l l y ) i n t h e P a r t B premium; and b ) a n income-related s u p p l e m e n t a l premium f o r p e r s o n s w i t h income t a x l i a b i l i t y . Expands home h e a l t h and h o s p i c e coverage f o r a l l b e n e f i c i a r i e s . I n t r o d u c e d May 5 , 1987; r e f e r r e d t o Conmittee on Finance. Reported J u l y 27, 1987. -- U.S. -- Congress. House. Committee on Ways and Means. Background m a t e r i a l s on h e a l t h c a r e coverage and expenses of t h e Medicare i n c l u d i n g H.R. 12801H.R. 1 2 8 1 , t h e Medicare population C a t a s t r o p h i c P r o t e c t i o n Acts o f 1987 a s approved by t h e Subcommittee on H e a l t h , Committee on Ways and Means. 1 0 0 t h Congress, 1st s e s s i o n . May 5 , 1987. Washington, U.S. Govt. P r i n t . O f f . , 1987. Committee p r i n t WMCP: 100-10 -- ----- C a t a s t r o p h i c i l l n e s s expenses. Hearings, s e s s i o n . J a n . 29, 1987. ( u n p u b l i s h e d ) 1 0 0 t h Congress, 1st Medicare c a t a s t r o p h i c p r o p o s a l s . H e a r i n g s , 1 0 0 t h Congress, s e s s i o n . Mar. 3, 4 , 10, and 30, 1987. ( u n p u b l i s h e d ) 1st ----U.S. Congress. House. S e l e c t Conmittee on Aging. Subcommittee on Long Term Care. Paying f o r c a t a s t r o p h i c h e a l t h c a r e . Hearings, 100th Congress, 1 s t s e s s i o n . Ian. 28, 1987. ( u n p u b l i s h e d ) - 1687106 CRS 14 09-01-87 U.S. Congress. House. Select Committee on Aging; and Senate, Special Committee on Aging. Catastrophic health care costs. Joint Hearings, 100th Congress, 1st session. Jan. 28, 1987. (unpublished) U.S. Congress. Senate. Committee on Finance. Catastrophic health insurance. Hearings, 100th Congress, 1st session. Jan. 28, and Mar. 19, 1987. (unpublished) U.S. Congress. Special Committee on Aging. Catastrophic health care costs. Hearings, 100th Congress, 1st session. Jan. 26, 1987. (unpublished) U.S. Congress. House. Committee on Energy and Commerce. Medicare Catastrophic Protection Act of 1987. Report to Accompany H.R. 2470, July 1, 1987. Washington, U.S. Govt. Print. Off., 1987. (100th Congress, 1st session. House Report no. 100-105, part 11). U.S. Congress. House. Committee on Ways and Means. Medicare Catastrophic Protection Act of 1987. Report to Accompany H.R. 2470, May 22, 1987. Washington, U.S. Govt. Print. Off., 1987. (100th Congress, 1st session. House Report no. 100-105, part I). U.S. Congress. Senate. Comnittee Loss Prevention Act of 1987. July 27, 1987. Washington, (100th Congress, 1st session. - on Finance. Medicare Catastrophic Report to Accompany S. 1127, U.S. Govt. Print., Off., 1987. Senate Report no. 100-1261. CHR0W)rn 07/27/87 --- Senate Finance Committee ordered reported S. 1127. 07/22/87 --- House passed H.R. --11/00/86 --- 02/24/87 2470. President submitted Message to Congress. Secretary Bowen submitted report to the President. FOR ADDITIONAL READING U.S. Congress. Committee on Ways and Means. Background Materials on Health Care Coverage and Expenses of the Medicare Population-the Medicare Catastrophic Protection Including ~.R.1280/H.R.1281, Acts of 1987 as Approved by the Subcomnittee on Health, Committee o n Ways and Means. Comnittee Print WMCP:100-10, 100th Cong. 1st session. Washington U.S. Gov. Print. Off., May 5, 1987. U.S. Congress. Message from the President of the United States. Proposed Legislation "Medicare Catastrophic Illness Coverage Act". 100th Congress, 1st session. Feb. 24, 1987. House Document 100-36 - U.S. G e n e r a l Accounting O f f i c e . Medigap i n s u r a n c e : Law h a s i n c r e a s e d p r o t e c t i o n a g a i n s t s u b s t a n d a r d and o v e r p r i c e d p o l i c i e s . Report t o t h e Subcommittee on H e a l t h of t h e Committee on Ways and Means. O c t o b e r 1986. ~AO/mD-87-8 U.S. Department of H e a l t h and Human S e r v i c e s . Report t o t h e P r e s i d e n t . C a t a s t r o p h i c i l l n e s s expenses. November 1986. U.S. L i b r a r y of Congress. C o n g r e s s i o n a l Research S e r v i c e . F i n a n c i n g and d e l i v e r y of long-term c a r e s e r v i c e s f o r t h e e l d e r l y , by C a r o l OIShaughnessy, Richard P r i c e , and Jeanne G r i f f i t h . [Washington] Feb. 24, 1987. CRS Report 87-143 EPW ----- H e a l t h i n s u r a n c e : p r o p o s a l s i n t h e 9 9 t h Congress [ b y ] Anne C. S t e w a r t and J a n e t P e r n i c e Lundy. [Washington] 1987. (Updated regularly) CRS I s s u e B r i e f 84067