Health: Rx for Catastrophe

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For at least some of the thousands of elderly Americans whose life savings are threatened by the astronomical cost of a catastrophic illness, the bill comes just in time. Last week House and Senate conferees approved the Catastrophic Loss Prevention Act, the largest expansion of Medicare since its creation 23 years ago. The new legislation is designed to prevent 31 million elderly and disabled Americans from being wiped out by the crippling cost of hospitalization. Among other things, the bill provides unlimited free hospital care after a $589 deductible is reached, a $1,400 annual limit on doctor's fees and a portion of outpatient drugs.

The expanded coverage is expected to cost $32 billion over the next five years, which will be paid by Medicare premiums of up to $800. Health and Human Services Secretary Otis R. Bowen has championed the bill, and the measure is expected to sail through the House and Senate.