HEARING - U.S. Senate Special Committee on Aging

104
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Consumers Union suV orts the recommendation to restructure
Medicare Part B to provide for catastrophic protection for the
elderly, financed by an additional premium. The proposal will
greatly benefit the elderly with the most severe medical
expenses, and is funded, appropriately we believe, by all
beneficiaries.
However, Consumers Union disagrees with several policies
contained in the Report. Section I of the following comments
describes the inappropriateness of using the private Medicare
supplement insurance market as a model for long-term care
insurance. In this section, we both explain why some of the
Report's recommended options are not desirable and identify
further options that should have been considered. Section II
takes issue with the Report's reliance on the tax system as a
mechanism to subsidize the savings plans and the purchase of
long-term care insurance policies. Section III describes why
the Report's treatment of the under age 65 population is
inadequate.
I. THE PRIVATE "MEDIGAP" MARKET HAS NOT WORKED WELL AND
SHOULD NOT SERVE AS A MODEL FOR THE LONG-TERM CARE
INSURANCE MARKET.
The Report attempts to form a "partnership" between the
private sector and the government, similar to the
medicare/medigap dichotomy, to facilitate access to long term
care insurance. In pursuing this partnership, the Report: (A)
fails to acknowledge or give adequate weight to the private
market's shortcomings; (B) recommends options that are destined