HEARING - U.S. Senate Special Committee on Aging

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be a fair distribution of the losses of those pools. That would require
an act of Congress to change that.
Senator WILSON. OK. I gather from the comments you have
made that you and your industry are not a supporter of the Bowen
proposal and that you feel that insofar as it supplements existing
gaps in Medicare, that it is not going to do the job, and yet I understood-perhaps
this is your personal view that you were expressing
earlier-you said there is need for some tax dollars to be spent to
take care of people who have problems of the kinds we heard described
this morning.
Is it your industry position that more coverage needs to be afforded
by additional Medigap coverage from the private sector?
Mr. SHAPLAND. Let me first of all correct a possible misunderstanding
about Bowen and the health insurance industry's position.
Bowen has many proposals. He had one on expanding Medigap.
We say that is unnecessary because the people already have the
coverage, and he is only making it available on an optional basis,
and whoever wanted to buy insurance has already bought it so it is
not going to do anything; it is not attacking the real areas of
need-long-term care, drug care, and so on. His proposal does not
hit that. And that is why we say that that proposal is not a very
good one.
But Bowen has many other proposals to fill gaps-employers who
cannot afford group insurance on their own without some help;
lower-income people who cannot afford the full cost of insurance,
and so on.
Senator WILSON. And who do not qualify for Medicaid, either?
Mr. SHAPLAND. Right; they fall between being able to buy private
insurance and Medicaid. And those things, we support; I mean, he
is on target, that where people cannot afford to buy private insurance,
maybe the Government needs to help subsidize insurance,
subsidize long-term care insurance and so on to cover that missing
ground, some of those loopholes.
Senator WILSON. All right. On page 3 of your statement you have
indicated that some 70 percent of Medicare beneficiaries use private
supplemental insurance; that another 10 percent of the remaining
uncovered 30 actually fall under Medicaid. So that leaves
only 20 percent of those over 65 without protection against gaps in
Medicare.
Mr. SHAPLAND. Right.
Senator WILSON. What I think I heard you saying is that the industry
supports the provision of long-term care and is looking to
the private sector to provide that care.
Mr. SHAPLAND. The long-term care has nothing to do with what
you just mentioned. It has nothing to do with Baucus or Medicare
or Medigap. It is a completely different area of insurance. I just
-want to make sure you understand that.
Senator WILSON. All right. Let us focus on the long-term care.
How does the industry see that need being filled?
Mr. SHAPLAND. OK. We see, as I think almost everybody seesand
I do not know if there is much disagreement on this, even in
discussions privately with various Congressmen and so on-the cost
of providing needed coverage for long-term care is almost beyond