HEARING - U.S. Senate Special Committee on Aging

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non-group subscribers of reporting Plans paid $20 or less per month, 40 percent paid $30
or less and 75 percent paid under $43. Blue Cross and Blue Shield Medigap coverage is
available in every state.
The Major Catastrophic Acute Care Coverage Ga2: Low-Income Elderly wt
Sunolemental Coverage
While we believe that the Medigap programs offered by Blue Cross and Blue Plans
represent a "good buy' for most beneficiaries, there are those who cannot afford any
private coverage that meets the minimum standards of the Baucus Amendment.
According to a study funded by the Health Care Financing Administration, about half of
the beneficiaries without supplemental protection said they simply could not afford it.
This finding is confirmed by a Congressional Budget Office (CBO) analysis showing that
low-income beneficiaries are the ones most likely to lack supplemental coverage.
According to CBO, nearly 30 percent of the elderly with incomes under $9,000 lack both
Medigap and Medicaid, versus only 10 percent of those above $25,000. CBO also found
that Medicaid covers only 28 percent of the elderly with incomes under $5,000.
Thus the major Issue facing Congress is not a problem of coverage avallabillit but of
afJQdabtiJy to those with limited resources. Accordingly, we believe any new
government program should be targeted to those who cannot afford existing private
coverage, and will suggest a number of options to accomplish this. We also believe that
the availability of government coverage - whether voluntary or mandatory - will not
solve the affordability problem. Comprehensive coverage Is not inexpensive, whether
provided by government or the private sector. Conversely, providing only a minimum
level of catastrophic protection still would leave the low-income elderly exposed to
substantial out-of-pocket expenses.
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