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The Medicare Catastrophic Coverage Act of 1988 (MCCA)

What Is the Medicare Catastrophic Coverage Act of 1988?

The Medicare Catastrophic Coverage Act of 1988 (MCAA) was a authority 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 open out Medicare benefits to include outpatient drugs and limit enrollees’ copayments for covered services.

It was the first bill to significantly increase Medicare benefits since the program’s inception. Although the bill passed easily with initial support, the As a gift and Senate repealed it a year later in response to widespread criticism of the bill.

Key Takeaways

  • A year after enacting the Medicare Catastrophic Coverage Act of 1988, Congress was self-conscious to retract the legislation due to widespread criticism.
  • Some found the wording of the bill regarding payment structures to be confusing, and so they ahead against it.
  • Many people find it hard to support changes to Medicare taxation as they feel that since they are let out out-of-pocket for their premiums anyway, they shouldn’t be taxed an additional percentage.

Understanding the Medicare Catastrophic Coverage Act of 1988 (MCCA)

The MCCA was a supplemental stiff that individuals eligible for Medicare Part A paid to finance the expanded coverage because of high federal budget losses at the time. This supplemental premium was progressive, meaning that payments were gradual. For this reason, it was contemplated not to cause hardship for less wealthy enrollees. These two characteristics represented a departure from previous methods of business social insurance programs in the U.S.

One reason the bill failed was the lack of comprehensive information and clear communication in promoting this iteration in U.S. healthcare recover. The widespread misunderstanding of payment plans led to distrust and pushback against the bill.

MCCA and Medicare Wages

For 2020, the Medicare tax rate is 1.45% for the staff member and 1.45% for the employer, or 2.9% total. Employers are responsible for withholding the 0.9% Additional Medicare tax on an employee’s wages that outreach $200,000 in a calendar year, regardless of filing status. There’s no employer match for Additional Medicare Tax.

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