HEARING - U.S. Senate Special Committee on Aging

96
to Secretary Bowen's proposals concerning the financing of
catastrophic illness.
There are three key points I will make in my testimony.
First, the private medicare supplement market ("medigap") has a
history of poor performance, and continues this tradition today,
despite piecemeal efforts at the state and federal level to
regulate it. Second, Consumers Union strongly supports
proposals that would expand Medicare coverage to include the
costs of catastrophic illness, and believes that sponsorship by
the federal government is warranted. Finally, Consumers Union
strongly urges you to consider the full range of options in an
effort to increase long-term care protection -- including both
voluntary long-term care coverage and mandatory long term care
coverage under Medicare.
Poor Performance of the Medigap Market
The experience with medigap is important to any discussion
of catastrophic health insurance. Its poor record argues in
favor of an expanded role for the federal government in
providing catastrophic illness expense protection. In addition,
reliance on the medigap model in developing proposals regarding
long-term care is misplaced.
In the late 1970's, abuses in the medicare supplement
insurance market were exposed by the House and <strong>Senate</strong> Select
<strong>Committee</strong>s on Aging, by the Federal Trade Commission, and by