HEARING - U.S. Senate Special Committee on Aging

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pp. 69,70), while administrative costs, marketing costs and
retained proceeds for commercial medigap policies average about
40%. The private market has tried, and has been given more than
enough time to rise to the challenge of serving consumers. But
after years of abuses and ineffective regulation, we believe it
is time to try another approach.
The Bowen proposal for catastrophic illness protection
continues to leave a sizable market left unfilled. We urge you
to consider a medicare-sponsored policy which would fill in the
remaining gaps instead of leaving the holes to medigap. An
expanded Medicare would save substantial marketing and
administrative costs and deliver more health benefits per dollar
to consumers. Further, a public sponsored program could
alleviate the labyrinthian search process for high value,
comprehensive coverage.
Further options for Long-Term Care Protection
Secretary Bowen's recommendations with regard to long-term
care stress public education, tax benefits for personal savings,
and tax subsidies to encourage the purchase of private
insurance. We urge you to consider additional options. We fear
that the private market will do no better with regard to
long-term care than it has done with regard to medicare
supplement insurance. Two options that we believe warrant
consideration are first, a voluntary Medicare Part C to cover
long-term care needs, financed in part by a premium paid by