The Medicare Catastrophic Loss Prevention Act of 1987, a bill which would protect Medicare beneficiaries from catastrophic expenses associated with covered Medicare services is reported on in this document from the Senate Committee on Finance. The report opens with the Committee's recommendations that the bill pass as amended. The background and need for the legislation are discussed, noting that this legislation responds to the concern that Medicare which has no upper limit on cost-sharing charges does not offer protection against catastrophic hospital and physician expenses. The bill is explained section-by-section with a comparison of current law and provisions of the bill. Hearing dates, committee voting records, estimated costs of carrying out the bill, and regulatory impact are discussed. Viewpoints expressing concerns about the bill by Malcolm Wallop and William Armstrong are presented. Changes in existing law made by the bill are shown in Titles XI, XVII, and XIX of the Social Security Act, in the Internal Revenue Code of 1986, and in the Omnibus Budget Reconciliation Act of 1986. (ABL)