HEARING - U.S. Senate Special Committee on Aging

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29), but fails to acknowledge that the market is, at best, only
marginally better now than it was in 1980. The General
Accounting Office recently reported that while the market had
improved somewhat, loss ratios of most policies were below the
section 1882 targets, and averaged 60.2% in 1984 (Medigap
Insurance: Law Has Increased Protection Against Substandard end
Overpriced Policies, Report to the Subcommittee on Health,
<strong>Committee</strong> on Ways and Means, October 1986]. Several companies
had loss ratios in the 20 to 40 percentile range; some were even
lower. Congressman Pepper held hearings on June 25, 1986 and
documented the continuing abuses and waste in this market
[Hearing on catastrophic Health Insurance: The Medigap crisis,
Subcommittee on Health and Long-Term Care, Select <strong>Committee</strong> on
Aging).
continued marketing abuses and average loss ratios of 60%
do not say much for the "value for money" being offered to
consumers in this market. We question why "value for money"
isn't a criterion used in the Report to evaluate the policy
alternatives.
(B) Inappropriate Options in the Report
With regard to long-term care protection, the Bowen Report
recommends (among other things):