The Short Life and Painful Death of the Medicare Catastrophic Coverage Act

The Medicare Catastrophic Coverage Act (CHI), signed into law in 1988, represented the greatest expansion of Medicare since the program's establishment in 1965. Although the nature and extent of the political fallout from these events is yet to be fully appreciated, the short life and painful death of CHI deserves attention. The Catastrophic Coverage Act, which in part reflects changing assumptions regarding reciprocal obligations as they apply to the elderly, provides an excellent case study of a policy development better understood through a combined political and moral economy framework. The structure of CHI taxation also violated moral economy notions of fairness in asking less than 6 percent of America's population to do what was expected of no one else: to pay a special tax for benefits for their age group. A political economy framework questions the basic assumptions of pluralism and overcomes many of its limitations.