Medicare Catastrophic Amendments of 1989

Medicare Catastrophic Amendments of 1989 - Title I: Repeal of Certain Provisions in Medicare Catastrophic Coverage Act of 1988 - Repeals provisions of the Medicare Catastrophic Coverage Act of 1988 (the Act) establishing a Supplemental Medicare Premium and providing Medicare coverage (title XVIII of the Social Security Act) of prescription drugs and insulin, home intravenous drug therapy services, screening mammographies, and in-home care for chronically dependent individuals.

Amends the Medicare program to increase the limit on Medicare part B (Supplementary Medical Insurance) out-of-pocket expenses incurred by beneficiaries for 1990. Gears future adjustments of such limit to changes in expenses of the Medicare trust funds. Modifies the Act's premium financing mechanisms.

Amends title XIX (Medicaid) of the Social Security Act to require States to establish the family income eligibility level for Medicaid coverage of Medicare cost-sharing amounts at at least 85 percent of the Federal poverty level. (Currently, States must phase-in such coverage for all families whose income is below the Federal poverty level.)

Requires Medicaid coverage of prescription drugs for individuals who are at least 65 years old and whose income does not exceed 150 percent of the Federal poverty level.

Title II: Tax Provisions Related to Long-Term Care Insurance - Amends the Internal Revenue Code to treat certain long-term care insurance which the Secretary certifies is providing coverage to each covered person for at least one year for diagnostic, preventive, therapeutic, rehabilitation, maintenance, or personal care services provided in a setting other than the acute care unit of a hospital as noncancellable accident or health insurance when taxing issuers of such insurance (hereafter referred to as qualified long-term care insurance). Requires such policies which are issued after 1989 to be reinsured by the Federal National Long-Term Care Reinsurance Corporation if the Corporation is incorporated when such policy is issued.

Directs the Secretary of Health and Human Services to submit a study on long-term care insurance policies to the Congress by 1991 and report annually to the Congress regarding the certification of qualified long-term care insurance.

Provides that for the purpose of determining whether a tax exclusion applies to employer contributions to, or an employee's receipt of benefits from qualified long-term care insurance such contributions and benefits shall be considered to be for personal injury or sickness, and medical care. Excludes from taxation: (1) distributions or payments from individual retirement plans which are used during the year to pay the premiums for qualified long-term care coverage of individuals who are age 59 1/2 or older on the date of distribution or payment; and (2) amounts received, when an individual surrenders, cancels, or exchanges a life insurance contract, and used during such year to pay the premiums for qualified long-term care insurance.

Title III: Federal National Long-Term Care Reinsurance Corporation - Federal National Long-Term Care Reinsurance Corporation Act - Authorizes the Secretary to provide for the incorporation of the Federal National Long-Term Care Reinsurance Corporation (Corporation), which shall not be an agency or establishment of the U.S. Government. Requires the Corporation to confine its activities to reinsuring insurance companies for extraordinary loss in the issuance or payment of qualified long-term care insurance benefits.

Sets forth organizing and administrative provisions with respect to the Corporation. Exempts the Corporation from State regulation and taxation. Directs the Corporation to report annually to the President and the Congress regarding its activities.