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A white-haired and bespectacled man who looks like the traditional family doctor he once was, Otis Ray ("Doc") Bowen served as a general practitioner for more than a quarter of a century in Bremen, Ind. He knows about the ravages of long illness personally as well as professionally: his first wife Beth spent the last three months of her life in a hospital before she died of bone cancer in 1981. The experience was "devastating emotionally," Bowen recalls, adding, "We have all seen how devastating illness can destroy the financial security of a family."

This is important to the crisis swirling around Doc Bowen, the first physician to command the Department of Health and Human Services, for he is now prescribing Government action against the havoc caused by catastrophic illness. Specifically, Bowen has proposed that by charging Medicare beneficiaries an extra $4.92 each month, the Medicare program could pay all hospital and doctor bills above $2,000.

"This is a social problem that has been smoldering for years," says Bowen. At present, Medicare pays hospital bills minus deductibles for the first 60 days only; after that the patient has to pay $130 a day for the next month, then $260 a day for another two months, at which point he is on his own. Patients also have to pay at least 20% of their doctor bills, which often run into many thousands of dollars. About 800,000 of the 28 million Medicare patients every year face bills higher than Bowen's proposed cap of $2,000. Some of them have private "medigap" insurance, but it is often inadequate.

A two-term Governor of Indiana before getting the HHS post, Bowen is not without political acumen, and he thought he had President Reagan's support for his new campaign. Not only has Reagan expressed sympathy for families with crushing medical burdens, he has also seen some of the consequences. Press Secretary James Brady, shot down by would-be Presidential Assassin John Hinckley, still needs considerable medical care, and his wife calls the costs for such care a "national problem crying for a solution." In the State of the Union message last February, the President formally asked Bowen "to address the problems of affordable insurance for those whose life savings would otherwise be threatened when catastrophic illness strikes."

Bowen's plan, which combines outright aid for major medical costs with a series of tax incentives for broader private insurance coverage, is no more than a very modest step. Only about 2% of Medicare patients would actually require extended benefits, according to one estimate. Most important, the proposal would not underwrite nursing-home bills, which now cost 1.4 million Americans an average of $22,000 a year each, with only about 2% of that expense covered by private insurance. Other important costs that are not covered, says John Rother of the American Association of Retired Persons: "Outpatient prescription drugs that cost $7 billion a year, extra physicians' charges that total $2.6 billion, eyeglasses at $1 billion and dental costs at $2 billion." Robert Maxwell, vice president of A.A.R.P., told a Senate committee hearing earlier this month that the "Secretary's proposal . . . is a minimal one . . . It is misleading to suggest that the Bowen plan would provide older Americans with protection against catastrophic health-care costs."

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