HEARING - U.S. Senate Special Committee on Aging

Consunmer
Unon
Pubtishcr of Consumer ReSors
116
Senator John Melcher, Chairman
<strong>Special</strong> <strong>Committee</strong> on Aging
United states <strong>Senate</strong>
Washington, D.C. 20510-6400
Dear Senator Melcher:
Item, 5
February 17, 1987
I appreciate your invitation to testify at the <strong>Special</strong>
<strong>Committee</strong> on Aging's January 26, 1987 hearing on catastrophic
health care costs. While my testimony of that date sets out
Consumers Union's overall position on catastrophic health
insurance, I would like to submit some additional comments in
response to the statement of the Health Insurance Association of
America (which was presented by Mr. Robert Shapland).
Consumers Union strongly disagrees with the HIAA portrayal
of medigap insurance as "a public/private sector success story"
and with the view that "the current combination of private and
public coverage is serving the public well." While it is true
that 70% of the elderly have purchased private health insurance
to supplement Medicare, this in itself is not indicative of a
healthy marketplace. Problems that remain in this market
include:
1. Dup lcivepolicies. Many Medicare-eligible
continue to be sold overlapping, duplicative
policies. Our San Francisco office identified a
79-year-old woman with five overlapping medicare
supplement policies, three nursing home policies and
one hospital indemnity policy, amounting to $6500 per
year in premiums. Other couples were found to have
$10,000 and $13,000 worth of overlapping medigap
policies.
2. Indqte information. The level of understanding
of just what Medicare and Medicare supplement
policies cover continues to be very low. For
example, 70 percent of the population over age 65
believes that Medicare would cover any long nursing
home stay, and half of those with medigap policies
believe that they are covered for long-term care
expenditures.
Washington Offi e
Suite 520. 2001 S Street. Norihwest -Washington. D C 20009 (202) 462-5262