ABSTRACT
The Medicare Catastrophic Coverage Act (MCCA) represents one of the shortest-lived pieces of social legislation in the United States. Unlike earlier additions to the Medicare legislation, such as the 1972 amendments that added disabled and end-stage renal patients, the Catastrophic Coverage Act was intended to be budget neutral, requiring beneficiaries themselves to fund the additions to benefits. The MCCA offers important political and economic lessons. The MCCA owed its initial political impetus to the Bowen Commission—a group headed by former Secretary of Health and Human Services Otis Bowen. A full understanding of the effects of the MCCA requires appreciation that average effects for an income group hide differences within the group. First, the effects of healthcare change differ by gender and race. Second, how much any individual in a group would benefit relative to others in the same income or demographic group depends on actual healthcare use.
