THIS was going to be the year the federal government finally did something to protect the elderly and their families from the financial ruin a major, long-term illness can cause. But unless Congress substantially alters the ``Medicare Catastrophic Protection Act'' that the House passed in July, older Americans will not get the benefits they are expecting from this bill. Despite its title, the bill the House approved does not cover the most common catastrophic expenses incurred by the elderly - those associated with long-term nursing home or home health care. Yet it is precisely the cost of such care that everyone fears the most, because it bankrupts all but the wealthiest: 63 percent of the unmarried elderly become impoverished after just 13 weeks in a nursing home, 83 percent within a year.
The bill does cover the exorbitant cost of a long-term hospital stay, but fewer than half of 1 percent of all medicare recipients are hospitalized long enough to use that benefit. It would also provide some additional help with physicians' fees, pay for part of the cost of prescription drugs, and extend a minor amount of coverage in a few other areas. Those benefits are really just marginal add-ons that would be used by only a small fraction of beneficiaries.
For the modest additional benefits provided in this legislation, medicare recipients would be charged an enormous amount. Along with the higher basic premiums that all beneficiaries would pay, millions would also have to pay a new ``supplemental'' premium. By 1992, a beneficiary with an adjusted gross income of just $15,000 would pay almost $1,400 in total medicare premiums, compared with $312 under current law. That is a lot more than anyone should have to pay for the small increase in benefits the bill provides.
At least one-third, and perhaps more than half, of the cost of the new program is due to the new prescription drug benefit. But pharmaceutical bills don't normally bankrupt the elderly. Moreover, the drug benefit is not cost-effective. A huge amount of paper work would be necessary to process tens of millions of prescriptions.
Worst of all, passage of this bill would only make it more difficult to achieve true catastrophic coverage. Having just approved a new package of benefits that will cost $10 billion a year by 1992 - and possibly $30 billion by 2005 - Congress is going to be reluctant to provide for the even more expensive coverage of nursing home and home health care. To do that will require either imposing even higher premiums on beneficiaries, raising taxes, or increasing the already intolerable federal budget deficit.
The Medicare Catastrophic Protection Act is an example of good intentions that went astray. We wanted to protect Americans from the financial devastation of catastrophic long-term illness, but ended up, instead, with a bill that would add billions of dollars' worth of marginal health care benefits, and which would help only one segment of the population, the elderly.
Congress needs to go back to Square 1. A better approach would be to create a true catastrophic insurance program for all Americans, young and old. As many as 40 million Americans under 65 have no health insurance, and many more have no catastrophic coverage. Although younger people have a much smaller incidence of long-term illness or disability, they too risk financial devastation if they lack insurance.
Congress should work to ensure that no American will be destroyed economically by the costs of a major long-term illness. A federally sponsored program covering truly catastrophic health care expenses and available to people of all ages would require very small premiums, because its cost would be spread among a much larger population that has a much lower incidence of need for such care. That kind of program would be far better than the expensive marginal benefits provided in the Medicare Catastrophic Protection Act.
US Rep. Anthony C. Beilenson is a Democrat from California.