Catastrophic Insurance Bill

There has been much confusion about the recently enacted federal Medicare Catastrophic Act of 1988, a new law that significantly expands Medicare benefits. Many of our elderly are under the impression that this new law will cover all their medical needs and that supplemental health insurance is no longer necessary. Unfortunately, that just isn’t true.

The new law will do much to help seniors pay for hospital stays and medical services. But it will not cover everything. For example, Medicare beneficiaries will still have to pay as much as $2,000 out of their own pockets before receiving full coverage for Medicare-allowed charges. Even then, Medicare pays for only “reasonable” charges, and its definition of reasonable is less than what most doctors actually charge. The difference, which patients must pay themselves, can quickly add up. A $43,000 coronary bypass operation, for instance, could cost a Medicare patient over $6,000.

And long-term custodial care, which typically costs $22,000 a year, has never been covered by Medicare. It will not be covered under the new law either.

An estimated 70% of Medicare benefits have some type of supplemental insurance coverage. It would be premature and unwise for these consumers to drop their policies now or in the near future without knowing the facts and without considering the risks. Many of the new Medicare benefits don’t even go into effect until 1990, for example.

JERE MURRAY

President

Greater South Bay Assn.

of Life & Health Underwriters Inc.