For the period 1/89 through 12/89, the Medicare program was changed by the Medicare
Catastrophic Coverage Act of 1988 from an acute care program into a catastrophic care
The additional long-term hospital benefits (effective 1989), drug benefits (in full
effect 1991),and yearly cap on Part B expenses (effective 1990) were to be funded
by an income tax-based premium for:
all who were eligible for Part A of Medicare on a non-premium basis,
had at least $150 income tax liability for 1989,
did not meet the exclusion relating to long-term residents of foreign countries.
Along with this funding, a specific add-on to the Part B premium was enacted.