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Staving Off Catastrophe

February 02, 1986

Reports from Washington say that President Reagan intends to season his State of the Union message with a proposal for catastrophic health insurance for Americans 65 and older. That would be a most constructive addition.

The contribution of Medicare has been eroded by inflation, reduced government funding, and restrictions written into the legislation so that less than half the health-care costs of senior citizens now are covered. It no longer is what it was intended to be--protection for older Americans from the fear of the cost of illness.

The most conspicuous and most devastating flaw is in the absence of protection for long-term hospitalization and long-term nursing-home care despite research that shows this long-term care to be the urgent need of 6.6 million Americans. This has meant that increasing numbers of older Americans, facing critical illnesses, have been forced to exhaust lifetime savings. When pauperized, they have qualified for the protection of Medicaid, called Medi-Cal in California--the safety-net program funded jointly with the states.

Many older Americans have bought so-called Medi-Gap insurance to try to cover the medical and hospital expenses not funded by Medicare. But most of these insurance programs fail to provide long-term care. For some there has also been the option of joining a pre-paid health-maintenance organization, but this is not an option that all Medicare subscribers want.

The value of catastrophic coverage by Medicare is that, by offering a universal program, it could provide protection for as little as $15 a month. That would be added to the $15.50 a month that Medicare recipients now pay for physician and outpatient services. The problem is how to make this available to low-income Medicare recipients who are unable to pay supplementary fees. The answer is that the federal government must assume that cost, as it already does for other elements of protection for low-income families. But that will not be an easy political decision at a time when the President and Congress are racing after budget cuts and shunning new programs.

There is simply no question about the inadequacy of the existing system.

Medicare this year raised the deductible that the patient must pay for each hospital admission to $492, an increase of 23%. After 60 days the hospital patient faces a co-payment of $123 a day for one additional month. If further hospitalization is required, the patient can draw on the 60-day lifetime reserve, but that requires a co-payment of $246 a day. Maximum coverage is 150 days. Skilled nursing-home care is also restricted; expenses are covered only for the first 20 days, requiring a co-payment of $61.50 a day for the next 80 days, with a limit of 100 days of care.

Those deductions and co-payments and time limitations force penury on senior citizens, even the most prudent, dashing their carefully laid plans for living out their lives in financial security. This inadequate protection is unworthy of the nation's commitment to fairness.

The state of the union's population will indeed benefit if the President succeeds in assuring long-term health care.

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