This paper considers the recent demise of the Medicare Catastrophic Coverage Act of 1988 in the context of the needs of the elderly and their families. Although the surtax imposed on middle and upper income elderly was the ostensible reason for the anger this Act generated among the elderly, other factors related to the concerns and needs of the elderly and of their families also prevented it from being supported. This article discusses the characteristics of the Catastrophic Coverage Act as a continuation of the historical bias of Medicare in favor of acute medical care and as an effort by Congress to restrain federal health care costs. Despite shifting socio-demographic realities which have increased the burden for many families of the elderly, the Catastrophic Act did little to meet their needs. The implications for future legislation to address these problems are also discussed.