The Medicare Catastrophic Coverage Act was a short-lived piece of legislation that President Ronald Reagan signed into law in 1988. It was repealed the following year amid widespread public dissatisfaction with it.
Purpose
The central purpose of the legislation was to protect the elderly from overwhelming financial hardship due to a major illness that required expensive medical care, according to a 1994 article in the Journal of Health Politics, Policy and Law. The legislation eliminated daily co-payments for stays in the hospital that exceeded 60 days and capped payments for co-payments for doctor care.
Potential
The prescription drug benefit portion of the Medicare Catastrophic Coverage Act was never enacted. It was written to be phased in starting in 1991, beginning with a set coinsurance rate on drug payments of 50 percent that would be lowered to 20 percent over the course of the subsequent two years.
Controversy
The law proved unpopular partly because the elderly, who were the main beneficiaries, did not want to pay the increased taxes that were needed to help fund the new benefits. There was also a belief that the legislation included insufficient long-term care benefits, according to a 1990 Health Affairs article.
Tags: Catastrophic Coverage, Medicare Catastrophic, Medicare Catastrophic Coverage