HEARING - U.S. Senate Special Committee on Aging

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Mr. Chairman and Members of the <strong>Committee</strong>, I am Mary Nell Lehnhard, Vice President
of the Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield
Association, representing 78 Blue Cross and Blue Shield Plans, is pleased to comment on
the need for catastrophic coverage for the elderly. The Blue Cross and Blue Shield
Association and its Member Plans have been major participants In Medicare since its
beginning. Blue Cross and Blue Shield Plans also underwrite benefits to supplement
Medicare coverage for about nine and one-half million beneficiaries, approximately 45
percent of all beneficiaries who purchase Medigap coverage.
We applaud your concern about protecting the elderly from financially catastrophic
health costs. The elderly may incur catastrophic costs for acute health services not
covered by Medicare or for cost-sharing involving Medicare-covered care. In this
regard, we would like to comment on HHiS Secretary Bowen's recent proposal, and S.
210, the bill you are co-sponsoring with Senator Kennedy. Your bill would establish a
new government program of acute care expense protection available to all elderly and
disabled persons, and Is based on Secretary Bowen's recent recommendations.
We also would like to comment briefly on catastrophic expenses for long term care.
These expenses threaten the finances of more elderly than do acute-care expenses. We
will address the need for private long term care Insurance, because Medicare does not
cover expenses for long term care.
The Melcher-Kennedy bill, S. 210, would:
o Establish a new federal program of health expense coverage available to persons
who have attained age 65 or are disabled.
o Limit out-of-pocket expenses for Medicare deductibles and coinsurance to $2,000
annually.