When the Medicare Catastrophic Coverage Act was signed by President Reagan in a Rose Garden ceremony last year, the book on how to care for the elderly should acute catastrophic illness arise, was shut. Or so we thought.
Before the ink dried on the president's signature, senior citizens across the country, realizing they would be paying more money out of their own pockets for benefits the vast majority of the elderly already had and will probably never use, began voicing vehement outrage over the program.When Reagan proposed a Medicare catastrophic program, he wanted just two components: protection from long hospital stays and huge physician bills.
Congress then expanded on that plan. As one of the authors - and one of its supporters - I offered the amendment to repeal the plan and go back to the drawing board.
I did this because we went too far and created a program that duplicated existing coverage and turned out to be much more expensive than we had been told.
It is important to keep in mind that the initial proposal made by President Reagan was very narrow. Two benefits: unlimited hospital stays, and limits on liability for physician charges - all at a cost to beneficiaries of $4.90 per month.
Congress then added a skilled nursing facility benefit, prescription drug benefits, respite care, a drug benefit, home health expansion: The list goes on and on - and so did the cost.
Last year Congress was told by the Congressional Budget Office that the entire program was going to cost $30 billion. Today, the CBO has estimated the cost at more than $47 billion.
The prescription drug benefit, originally estimated at $6 billion and not scheduled to go into effect until 1991, doubled to $12 billion. And the skilled nursing home benefit, according to the CBO, skyrocketed 650 percent, or $2.5 billion to $12 billion.
These costs were not to be paid by us but by the elderly.
What Congress didn't see one year ago when this legislation passed were three fatal flaws that 32 million beneficiaries saw:
- The catastrophic program duplicates coverage most senior citizens already have. According to the Health Insurance Association of America, more than 70 percent of the senior citizens in this country have similar or better insurance coverage than what Congress was offering. Recently, The Wall Street Journal said the figure is closer to 85 percent.
- Senior citizens object to being forced into a system without any say on their health-care coverage. They want the same "freedom of choice" that other Americans have - and that they had - before enactment of the program.
- Senior citizens rightly object to paying for coverage they already have.
Before I came to the conclusion that repeal was the only logical direction to take, the House Ways and Means Committee tried to solve the problems, but we failed again after finding only three possible solutions.
The first was to transfer the cost of the program to the general population by increasing the payroll tax. Second, take away existing benefits from retirees that they earned during their working years. Third, allow everyone to "option out" if they had coverage from prior work or private insurance. If we had allowed the latter, the program would have collapsed from its own weight.
The fact is that we gave America's senior citizens benefits they didn't want or need and refused to give them what they have been repeatedly asking for all along: long-term, custodial care coverage.
The repeal of the catastrophic illness bill is not the end. It's the beginning - a beginning of a realization that we cannot deal with the health needs of Americans by putting patches over problems. It does not work. People are too sophisticated to allow it to happen.