HEARING - U.S. Senate Special Committee on Aging

50
- 2 -
I am Robert Shapland, Vice President and Actuary for the Mutual of Omaha.
Today I also represent the Health Insurance Association of America. The HLOA
is a trade association, representing sane 335 insurance companies. Our
inmbers write over 85 percent of the private health insurance provided by
iVsuance companies in this country. Many of these comrpanies, includi my
own, also design and underwrite private insurance plans that coordinate with
the Medicare Program. Mutual of Onaha has many years of experience in that
particular business.
The HIAA appreciates this opportunity to conent on proposals for
financing catastrophic health care under Medicare. We conmend you, Senator
Velcher, and this comnittee for exploring this issue, however, we encourage
you to look beyond mechanisms for financing acute hospital and medical care.
Acute hospital/medical care expenses are not the predominant cause of
catastrophic expenses among the aged. In fact, approximately 70 percent of
Medicare eligibles have catastrophic private Medicare Supplement coverage.
The elderly are most at risk for chronic long term care and outpatient drug
expenses - items not covered by Medicare. Specifically, 42 percent of the
elderly's total out-of-pocket expenses are for nursing home care. Long tern
care is a complex health policy issue reqiring thoughtful and balanced debate.
If I could summarize for you the prevailing conclusion frum our industry's
assessments of Medicare and its present condition, I would have to say that we
see no cuzpeling need to begin a major overhaul of this program. In our
opinion, the current cumnination of private and public coverage is serving the
public well. So, since the system obviously is not -broken', a major *fix"
hardly seems warranted.