Citation

Hallman GV. J. Risk Insur. 1972; 39(1): 1-16.

Copyright

(Copyright © 1972, American Risk and Insurance Association, Publisher John Wiley and Sons)

DOI

10.2307/251646

PMID

unavailable

Abstract

Rising medical care costs combined with rapid advances in medical technology again have brought into sharp focus the problem of catastrophic medical expenses for the public. For those families exposed to medical costs that exceed even the limits of current major medical policies, the result often is financially ruinous. The "traditional" primary plans by which the public has been protected against catastrophic medical costs, including major medical coverage, have various limitations in meeting this risk. These limitations are explored in the article. Also, the excess medical expense coverage currently written as a part of personal umbrella policies has important weaknesses and very little other health insurance presently is written on an excess basis. Therefore, it is proposed that broad, excess type medical expense coverage be made widely available to the public to enable consumers to protect themselves against potentially catastrophic losses. Various criteria are suggested in the article for such catastrophe coverage, including: (1) no maximum limit, (2) a "stop-loss" limit on all cost sharing, and (3) broader coverage. The current debate over national health insurance may produce a plan covering catastrophic medical costs under either private or social insurance. The article analyzes the major national health insurance proposals in terms of how they would provide such catastrophe coverage.