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Medicare Catastrophic Coverage Act and Its Failure Case Study

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Updated: Dec 11th, 2020

Introduction

The Medicare Catastrophic Coverage Act (MCCA) was a bill that was enacted into law in 1988 to mitigate the weaknesses of the health care system. It was aimed at expanding catastrophic coverage for the beneficiaries of Medicare. The bill was expected to introduce significant changes that would transform the American health care system. However, it did not achieve this goal as it was repealed within a period of less than two years after its enactment.

Why Was the MCCA Passed?

As mentioned earlier, the MCCA was passed in order to improve the Medicare program and offer more services to its beneficiaries. The bill’s major goal was to address the problem of affordable insurance for people who were in danger of financial ruin in case they suffered a tragic illness (Nickitas, Middaugh, & Aries, 2016). It was passed in order to enhance acute care benefits for the elderly and the physically challenged, cap the beneficiaries’ costs of care, and introduce outpatient drug benefits (Novak, 2015). Moreover, it was designed to limit member copayments for covered services under the program (Stein & Chiplin, 2017). The bill was to be phased in the program progressively in a span of five years (between 1989 and 1993) in order to avoid causing hardships for poor enrollees.

Why Was the MCCA Repealed?

The MCCA was the first legislation to expand Medicare benefits in a meaningful way for enrollees since the inception of the program in 1966. The bill was passed easily as it was deemed a departure from previous methods of financing social insurance that were considered ineffective (Nickitas et al., 2016). However, it was repealed a year later by the House and Senate. The widespread criticism that the bill received from members of the public led to its annulment (Novak, 2015). Moreover, it could not be implemented successfully because its implications for the health care system were misunderstood. The MCCA imposed new costs that would affect the elderly, even though they were supposed to be the major beneficiaries (Allender, Rector, &Warner, 2014). The bill’s opponents argued that they were happy with their existing coverage. Therefore, they were unwilling to pay new taxes in order to facilitate the implementation of the MCCA. The legislation taxed wealthy Americans over the age of 65 years and raised Medicare premiums (Allender et al., 2014).

The Lessons Learned with the MCCA

The repealing of the MCCA highlighted major policy lessons that legislators should consider before passing new laws. First, it is inappropriate to pass a bill that charges varied premiums for different people in the same group and offers benefits to only a few individuals. The supplemental premium was the most controversial aspect of the MCCA (Novak, 2015). Second, a departure from regular means of insurance financing is a potential reason for rebellion. Many people are comfortable with their current methods of financing, and any change would be unwelcome. Third, it is important for the government to create awareness regarding each bill that is passed and its implications for the health care system. For instance, opponents of the MCCA focused on the new tax and higher premiums and ignored its innumerable benefits (Novak, 2015). The misunderstanding that ensued from the partial reading and misinterpretation of the bill led to its repealing.

Conclusion

The MCCA was passed to expand the Medicaid and offer more benefits to enrollees. However, it was repealed within a year after its inception because it treated some members of the Medicare program unfairly. It introduced a new tax and increased premiums in order to facilitate its implementation. The MCCA was a beneficial legislation. However, it was annulled because it would not benefit all the enrollees of Medicare.

References

Allender, J., Rector, C., & Warner, K. (2014). Community & public health nursing: Promoting the public’s health (8th ed.). New York, NY: Lippincott Williams & Wilkins.

Nickitas, D. M., Middaugh, D. J., & Aries, N. (2016).Policy and politics for nurses and other health professionals (2nd ed.). Burlington, MA: Jones & Bartlett Learning.

Novak, M. (2015). Issues in aging. New York, NY: Routledge.

Stein, J. A., & Chiplin, A. J. (Eds.). (2017). 2017 Medicare handbook. New York, NY: Wolters Kluwer.

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