Law & Legal & Attorney Health Law

Medicare Catastrophic Coverage Act

    History

    • In 1986, the secretary of the Department of Health and Human Services was charged with creating a plan that would provide coverage for Americans receiving Medicare benefits in the event of "catastrophic" medical care expenses. The Secretary's proposal provided the framework for creating the Medicare Catastrophic Coverage Act of 1988.

    Features

    • The Medicare Catastrophic Coverage Act expanded coverage for inpatient hospital stays and included payment for inpatient prescription drugs, and intravenous therapy at home. This Act also increased the coverage to 150 days each year for skilled nursing facility care and unlimited days of hospice benefits, but put a cost limit in place.

    Types

    • This legislation provides coverage for hospital care and home care for Medicare patients. Medicare patients may stay in the hospital for as many days as their doctors deem necessary if they make one yearly deductible payment. Home healthcare benefits allow a maximum of 38 consecutive days of care by nursing and home health aides.

    Cost

    • In an effort to finance the Medicare Catastrophic Coverage Act of 1988, Congress mandated that Medicare enrollees make additional payments. Patients 65 years or older, who wish to enroll in the Hospital Insurance Program, must pay the part A premium. Enrollees also have to pay 20 percent of each day's costs for the first 8 days of care they receive after leaving the hospital. Eligible enrollees pay supplemental premiums, known as part B each year, based on their federal tax liability.

    Additional Coverage

    • Not all benefits provided in the Medicare Catastrophic Coverage Act began immediately. Catastrophic expenses coverage for immunosuppressive drugs after transplant surgery began in 1990, and for insulin and outpatient prescription drugs in 1991.

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