Ronald Reagan picture

Remarks on Signing the Medicare Catastrophic Coverage Act of 1988

July 01, 1988

It was in my 1987 State of the Union Address—and by the way, one of the best parts of this job is that from time to time you get to quote yourself— [laughter] —but it was in my State of the Union Address that I said, "Let us remove a financial specter facing our older Americans: the fear of an illness so expensive that it can result in having to make an intolerable choice between bankruptcy and death." Well, our administration, I went on to say, would soon submit legislation "to help free the elderly from the fear of catastrophic illness."

Well, that initiative has produced an historic piece of legislation, and in a moment, I will sign the Medicare Catastrophic Coverage Act of 1988. This legislation will help remove a terrible threat from the lives of elderly and disabled Americans, the threat of an illness requiring acute care, one so devastating that it could wipe out the savings of an entire lifetime. The scene is only too easy to picture. An elderly couple, perhaps one has a very long stay in the hospital; the other forced to empty the savings account, to skimp on groceries. And even for those never actually forced into this situation, there's the gnawing worry, the fear, that someday it might just happen. This legislation will change that, replacing worry and fear with peace of mind.

I'm proud to be able to note that the legislation follows the same premise as all sound insurance programs. It will be paid for by those who are covered by its services. Even so, I must add a word of caution. Every administration since the Medicare program was passed has worried about the seemingly uncontrollable cost increases in our government health care programs. Whoever the President in office, program costs have exceeded the best congressional budget estimates. Unless we're careful, it's possible that aspects of this legislation will do the same.

In particular, the legislation provides many new benefits, benefits like respite care and prescription drugs. Since these have never been covered by Medicare, we have no real way of knowing how much these services will cost. So, if future administrations and Congresses aren't diligent, these new benefits could contribute to a program we can't afford. This could be more than a budget problem; it could be a tragedy. The program, after all, is to be paid for by the elderly themselves. So, we must control the costs of these new benefits, or we'll harm the very people we're trying to help. And yet, if administered with prudence, this program can, as I said, provide countless Americans with peace of mind.

Many people share the credit for this achievement. In fact, I feel a little like an Academy Award winner back in my old profession: No matter how many I thank, I'm afraid I'll leave somebody out. There were the hundreds who testified at the regional meetings. There was the public-private working group consisting of many of the Nation's leading health experts. There were the Senators and Representatives of both parties, like Dan Rostenkowski, chairman of the House Ways and Means Committee; Lloyd Bentsen, chairman of the Senate Finance Committee; John Dingell, chairman of the House Energy and Commerce Committee; Bill Gradison; Pete Stark; and many others, some of whom are on the dais with me today, who toiled, compromised, and sacrificed. There were the elderly and their organizations who agreed to pay for this new benefit rather than have it placed on the backs of their children. And there was our Secretary of Health and Human Services, Dr. Otis Bowen, working tirelessly to bring this achievement about.

On behalf of a grateful nation, I thank you all. And now let me sign this historic legislation, the Medicare Catastrophic Coverage Act of 1988.

Note: The President spoke at 10:31 a.m. in the Rose Garden at the White House. H.R. 2470, approved July 1, was assigned Public Law No. 100-360.

Ronald Reagan, Remarks on Signing the Medicare Catastrophic Coverage Act of 1988 Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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