Catastrophic-illness care: Senate proposals leave glaring gaps

Perched informally atop a table in a formal Senate hearing room, Sen. John Melcher quietly explains what's wrong with two proposals to expand medicare, the federal program to help the elderly pay medical costs. ``There are huge blank spots in both bills'' to provide assistance for some kinds of catastrophic illness, says the Montana Democrat, who chairs the Senate Aging Committee. ``Both of them leave out a lot of people and leave them very vulnerable as to how they're going to pay the bills for health-care costs.'' Most vulnerable, both the senator and a new report by the General Accounting Office (GAO) say, are the poor and near-poor.

Senator Melcher and a few other members of Congress are trying to fill in the blanks.

But they are running afoul of widespread concern, both in Congress and the Reagan administration, about costs. Even if costs should turn out to be affordable today, many wonder whether they will rise out of sight in the next few decades.

A report published Thursday by the GAO, on which Melcher in part based his view, contains a warning about costs. The experience of five states with catastrophic-illness plans is that ``high costs and rapid cost growth generally characterized'' their programs, it says.

Melcher said yesterday that when one of the bills comes before the Senate, probably in September, he will seek amendments to:

Pay 80 percent of the costs of prescription drugs for medicare patients, after a $200 deductible; a similar provision is in the House-passed bill.

Greatly increase the number of days the federal government will pay for skilled care, as distinct from custodial assistance, in nursing facilities or their own homes.

Melcher says his proposals would be financed by higher medicare fees paid by elderly Americans who would use the program; there would be no added cost to the average taxpayer.

Neither the Melcher proposals nor the two major bills before Congress - one approved by the House, the other not yet considered by the full Senate - would provide medicare payment of the cost of custodial nursing-home care, which can run well over $20,000 a year. The only federal program that provides such funds is medicaid, which generally requires that the afflicted person and spouse first must spend most of their assets, excluding house, ``resulting in the rapid impoverishment of beneficiaries and their spouses,'' the new GAO study says.

Medicare and private insurance plans ``do not cover the needs of typical long-term patients'' who require only custodial care, the GAO report finds. It adds that 70 percent of these patients are cared for in their own homes, most by family and friends.

The GAO's financial analysis of a wide-ranging proposal by Sen. James Sasser (D) of Tennessee points up the concern about the cost of long-term care. The Sasser proposal would have the federal government finance the full cost of long-term care, whether at home or in nursing facilities. The first-year cost for that provision would exceed $1 billion, the GAO concludes.

But many members of Congress note that in 1980 the elderly were 11 percent of the population; by 2020 they are expected to be 17 percent.

Over the past decade health costs have risen two to three times as fast as the cost of living; many experts say they will continue to rise at a similar pace.