President Reagan intends to propose a new initiative to provide insurance for the elderly against catastrophic illness, and White House officials are giving serious consideration to launching the idea Tuesday in the State of the Union address, officials said yesterday.
Details of such a plan are not complete, but the concept has strong support from Reagan and Health and Human Services Secretary Otis R. Bowen, the officials said.
Some aides, however, have objected to including the plan in Reagan's speech to Congress, which is being shortened this year and will not include the customary list of administration proposals.
Thus, the idea may be left for inclusion in a planned separate message on the president's legislative agenda, the officials said.
Reagan proposed a catastrophic health plan in 1983, but it was not approved by Congress.
Catastrophic insurance is designed to save people from financial ruin when a serious illness requires long hospitalization or costly treatment not covered by other insurance. Although such illnesses are rare -- the average Medicare hospital stay under the new prospective payment system is less than eight days -- the bills can mount to tens of thousands of dollars.
Meanwhile, Reagan told Senate Republicans at a breakfast meeting yesterday that he opposes including a business-transfer tax or an oil-import fee in the tax-revision plan that the Senate is to consider this year, according to administration and congressional officials. Details on Page A4.
Reagan said at a news conference Jan. 7 that he tried to establish a catastrophic insurance plan when he was California governor "and I couldn't get any public interest in it at all. I guess everyone has a feeling it'll never happen to them."
He added that the administration was "looking at . . . whether we can't find something to take care of catastrophic illnesses."
Administration officials said the details of a catastrophic health plan would be worked out later. What Reagan is considering is a "fairly specific promise" to produce a proposal.
Reagan's fiscal 1987 budget, to be submitted in two weeks, does not include such a plan, officials said.
They noted that while such plans are complex, one could be devised that would not increase or reduce the budget deficit.
Under current law, a patient pays $400 to cover the first day in the hospital, then stays as long as 60 days free. But a patient who stays longer has heavy out-of-pocket costs.
From the 61st to the 90th day, the patient must pay $100 daily, and for days after that, $200. After the 150th day, the patient pays the whole cost.
Under a catastrophic health plan, patients are generally asked to pay slightly higher premiums in exchange for protection against large hospital bills for longer stays. But many patients already pay for extra insurance protection that might not be needed under a comprehensive catastrophic plan.
Bowen, a former Indiana governor and professor of medicine, drafted a catastrophic health insurance plan for a hospital-industry magazine last summer, before he was nominated to the Cabinet, and is known to have put the issue high on his agenda as HHS secretary. The plan would cover hospital bills, doctor bills and nursing homes for the elderly.
It is not known whether the administration proposal would resemble Bowen's plan.