Catastrophic Acute and Long-Term Care Costs: Risks Faced by Disabled Elderly Persons


The repeal of many provisions of the 1988 Medicare Catastrophic Coverage Act was due to subjective impressions about the usefulness to many elderly persons of the services covered by the law and to the omission of long-term care services. In the wake of the repeal of the Act, many legislators have promised that the issue of catastrophic health care costs would be revisited and that long-term care costs as well as acute care costs would be considered in their deliberations. This paper presents an empirical analysis of the extent to which acute and long-term care cause disabled elderly persons to incur catastrophic costs. The authors found that the proportion of these people whose out-of-pocket costs exceed 20% of income rises from 20% when only acute care costs are measured to 30% when long-term care costs are included. [25 PDF pages]

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