DEFINITION of 'Medicare Catastrophic Coverage Act Of 1988 - MCCA'

A government bill designed to improve acute care benefits for the elderly and disabled, which was to be phased in from 1989 to 1993. The Medicare Catastrophic Coverage Act of 1988 was meant to expand Medicare benefits to include outpatient drugs and limit enrollees' copayments for covered services. It was the first bill to significantly expand Medicare benefits since the program's inception.

BREAKING DOWN 'Medicare Catastrophic Coverage Act Of 1988 - MCCA'

A supplemental premium paid by all individuals eligible for Medicare Part A was to finance the expanded coverage because of high federal budget deficits at the time, and the supplemental premium was progressive so that it would not cause hardship for poor enrollees. These two characteristics represented a departure from previous methods of financing social insurance programs in the United States. Although the bill passed easily with great support just a year and a half later, the House and Senate repealed it in response to elderly peoples' widespread misunderstanding and criticism of the bill.

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