Dr. WHITE. The Council for Christian Social Action is grateful for this opportunity to present its views which is a generalization of many of the particulars discussed by Dr. Lee.

If there is no discussion of what has been read briefly, I should like to make a comment or two.

The CHAIRMAN. You may do so.

Dr. WHITE. Following the quartet of optimists who sat at this table this morning, I have to say as Mark Antony said to Brutus, "I am no orator as Brutus is," but as of now the aged, the poor, and all poor, do not have free choice of physicians. That is as matters stand now.

I shall list again briefly some of the things that have not been said, believe it or not, so far.

I have with me the excellent book, because the book agrees with both Dr. Lee and myself-that is one reason-but anyway it is a grand summary. The summaries emphasize that we are do we have to stop?

Mr. KING. If you will make yourself comfortable, this is a rollcall. Other members will return shortly. Mr. Curtis and I will be back shortly and we would like you to resume. I do not want you to be cut off.

Dr. WHITE. I am sure you mean it as well as you say it so I shall make myself comfortable.

Mr. KING. The fact that you are a good old friend of Mr. Curtis,

I want you to have your full say. We will retire for just the period

of time it takes to get some members back.

Mr. ULLMAN (presiding). You may continue with your testimony. Dr. WHITE. This statement in the book-by Herman and Anne Somers so well quoted by Dr. Lee is a very important point.

Progress toward an impasse. There was a sharp fall off as the aged progressed in years. Among those 65 to 74 years of age, 53 percent had some protection but the proportion fell to 32 percent for those 75 and over.

A point which has not been stressed is the fact that in 1980, our aged, that is really aged population over 75 will number about 9 million instead of the present 5 million.

No one contemplates 100 percent medical expense coverage but to prove meaningful, insurance must meet at least 75 percent of an aged person's health expenses leaving no more than 25 percent to be paid out of pocket.

So very often the term "coverage" as it has been used means about the coverage that a cold old man in the middle of the night would receive when he pulls the bedclothes all the way up to his bony knees, not more than that.

I am not here to attack the AMA. I will say that I was a member of the AMA until about 12 years ago. I have felt obliged to rename the AMA the American Mossback Association on account of their favorite surgical endeavor, which is "Operation Foot Drag." I have not gone along with them on matters of major policy. Now so much for the AMA.

I do wish that the AMA and others with them might use the term "social medicine" instead of the everlastingly repeated "socialized medicine."

So now we over 65, and that includes me, are not going to win or to lose any future war, but let us not hamstring the President's

home front program because of expenditures for the military. Let us pay attention to his home program, too.

Finally, brethren, I beg, be not the first to lay the old aside.
Thank you.

Mr. ULLMAN. Thank you, Dr. White.

The next witness is George M. Harrison.

We are very pleased to have you before the committee, Mr. Harrison. Please give your name for the record and proceed as you wish.

STATEMENT OF GEORGE M. HARRISON, CHAIRMAN, SOCIAL INSURANCE COMMITTEE, RAILWAY LABOR EXECUTIVES' ASSOCIATION

Mr. HARRISON. Thank you very much, Mr. Chairman.

My name is George M. Harrison. I am president of the Brotherhood of Railway & Steamship Clerks, Freight Handlers, Express & Station Employees, with offices at 1015 Vine Street, Cincinnati, Ohio. I appear here as chairman of the social insurance committee of the Railway Labor Executives' Association and I represent the 24 standard railway labor organizations comprising that association and having in membership substantially all railroad employees in the United States.

For the convenience of the committee, I list these railway labor organizations:

American Railway Supervisors' Association.
American Train Dispatchers' Association.

Brotherhood of Locomotive Engineers.

Brotherhood of Locomotive Firemen & Enginemen.

Brotherhood of Maintenance of Way Employees.

Brotherhood of Railroad Signalmen.

Brotherhood of Railroad Trainmen.

Brotherhood Railway Carmen of America.

Brotherhood of Railway & Steamship Clerks, Freight Handlers, Express & Station Employees.

Brotherhood of Sleeping Car Porters.

Hotel & Restaurant Employees & Bartenders International Union.

International Association of Machinists.

International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers.

International Brotherhood of Electrical Workers.

International Brotherhood of Firemen & Oilers.

International Organization Masters, Mates & Pilots of America.
National Marine Engineers' Beneficial Association.

Order of Railway Conductors & Brakemen.

Railroad Yardmasters of America.

Railway Employees' Department, AFL-CIO.

Sheet Metal Workers' International Association.

Seafarers' International Union.

Switchmen's Union of North America.

The Order of Railroad Telegraphers.

These railway labor unions strongly favor bill H.R. 4222, title III of the bill relates specifically to railroad employees, and I shall discuss the provisions of this title very shortly.

The reasons that we support the bill as a whole may be very briefly summarized.

The problem of elderly people in paying for, or in insuring themselves against the costs of hospital and other related medical services is a very real problem that is growing in scope and magnitude day by day as these costs mount and the aged population increases. It is a

pressing problem and one which, as the events of the last year show, is not going to be answered with the kind of inadequate approach made by the Kerr-Mills Act.

The President in his message to Congress in February 1961 pointed out that less than half the aged population is covered by private hospital insurance, and much of this protection is woefully inadequate. Moreover, although the annual income of persons over 65 is only a fraction of that of younger persons, their annual medical bills are twice as large. One of every five couples drawing social security benefits must go to the hospital each year, and half of them get bills for more than $700.

We support the social security approach to providing medical benefits for the aged. The other approach-the Kerr-Mills Act of last year has already been shown to be inadequate and unsatisfactory. This is demonstrated clearly by the fact that less than half of the States have adopted plans under that act, and even in those States the benefits provided are lamentably inadequate. In the State of Kentucky, for instance, the maximum limit on hospital care under the Kerr-Mills program is 6 days. But even this is denied to anyone with a gross annual income in excess of $1,200 for a single person and $1,800 for a married couple.

The reasons that so many State legislatures have not adopted the necessary supplementary legislation under the Kerr-Mills Act may and probably do vary. Financial considerations are plainly involved for many States are facing serious financial problems aggravated by indequate revenue systems. But certainly had there been any substantial support for the Kerr-Mills approach at the State level, the progress of enabling legislation would have been far, far greater than anything we have seen.

A glaring fault with the Kerr-Mills law, of course, is the means test which requires that before an old person can receive benefits he must expose his privation to the public authorities and ask for what is essentially charity, a requirement that robs old age of its dignity and introduces shame into the sick room.

We believe that the sensible and characteristically American way to handle this problem-the problem that so many of our old people are unable to afford the costs of hospital and related medical careis through the same prepayment plan that has been employed so successfully in the social security system. There is nothing in the program of prepayment of health costs under the social security system which may properly be characterized as socialistic. The cry of socialism in connection with this bill is the same old cry that was made against social security in 1935. It is the same cry that was made against the addition of disability benefits in the social security system during the last administration. It is the same old cry that was made against Blue Shield and Blue Cross. And it is being made by the same people.

This weary old cry of socialism sounds out of an age that is past. Today the Government itself accepts the Blue Shield and the Blue Cross for its own employees. During the last administration, not noted for its radicalism, considerable progress was made in liberalizing the system, particularly in the field of disability benefits, and today it is clear that the social security system is accepted by both political parties alike.

Moreover, in this bill every effort has been made to allay the fears of these prophets of doom. The bill spells out, as clearly and explicitly as words can be used, that there will be no governmental supervision or control over the practice of medicine by any licensed doctor, or over the manner in which medical services are provided by any recognized hospital. The right of every person to choose his own doctor and hospital is made crystal clear. Many conservative organs of the public press whose immunity from socialistic association is beyond question have endorsed the social security approach to medical benefits for the aged.

This approach will meet the costs of the program through small increases in the contributions of both employers and employees. It is in essence a method by which people pay during their productive years for the protection against medical costs that will be afforded them under this bill when they become eligible. Since it is a new program, those who have already retired will be extended the benefit of the act's protection in accordance with long-established social security principles and precedents. In a nation which has sought to govern itself in accordance with the precepts of religion and morality a proper concern and respect for the problems of its aged persons is fundamental. We believe that the program offered by bill H.R. 4222 is in accordance with such precepts.

With reference to title III of bill H.R. 4222, which relates specifically to railroad employees, the matters I wish to discuss are:

(1) The efforts which have been made by the railway employees and their labor unions to secure for retired railroad workers and their dependents needed hospitalization and other related benefits;

(2) The failure of these efforts to secure such benefits; and (3) how title III of bill H.R. 4222 would provide railroad workers and their dependents, age 65 or over, with needed hospitalization and other related benefits.

THE EFFORTS MADE BY THE RAILWAY EMPLOYEES AND THEIR LABOR UNIONS TO SECURE FOR RETIRED RAILROAD WORKERS AND THEIR DEPENDENTS NEEDED HOSPITALIZATION AND OTHER RELATED BENEFITS

First, let me state that as of the end of May 1961, the total number of beneficiaries, age 65 and over, on the rolls of the Railroad Retirement Board was 673,000 (348,000 retired employees, 144,000 wives, and 181,000 survivors), and the weighted average monthly annuity to all in this group was $99 ($134 to retired employees, $59 to wives, and $64 to survivors). Considering the health problems of persons in this age group, it is quite obvious that the monthly annuity is totally inadequate to meet both living expenses and the cost of medical care. In 1954 many of the labor unions, representing railroad employees, through collective bargaining, negotiated a nationwide plan for providing hospital, surgical, and medical benefits for active employees. Under this plan, on railroads where hospital associations were in existence the arrangements were adapted to provide the negotiated benefits. With respect to the nonhospital association railroads a single national insurance policy was negotiated to provide specified benefits at specified premiums. Under this policy the Travelers Insurance Co. was the primary insurer and reinsured varying per

centages of the risk with other qualifying companies desiring to participate.

Initially this plan was applicable only to the protection of employees on a 50-50 contributory basis and separate arrangements had to be made to make insurance for dependents available on a voluntary basis at the expense of the employees. Subsequently, however, renegotiations have provided for the employee and dependents benefits to be on a noncontributory basis and the dependents benefits for hospital association railroads and nonhospital association railroads are now included in the one insurance policy.

The arrangements above summarized deal exclusively with employees at work and their dependents. We have thus far not been able, through collective bargaining, to provide for the continuation of any such benefits for the employee or his dependents after retirement of the employee. This presented a most serious problem.

To meet this situation as best we could, the railway labor unions obtained a separate group insurance policy making available benefits on a voluntary individual application and premium payment basis for retired employees and their dependents. The opportunity was thus made available to all employees covered by the collectively bargained plan while in active service to secure protection upon retirement, on a reduced benefit basis, at their own expense. Where hospital associations are in operation, retired employees are generally permitted by making payments under varying arrangements to continue protection for themselves, though their dependents are generally not covered. In instances where retired employees on hospital association railroads do not have this opportunity, they are eligible upon retirement to be covered by the group insurance policy obtained by the labor unions for both employee and dependent benefits and all employees on such railroads are eligible to be covered for dependents benefits.

THE FAILURE OF THE EFFORTS OF THE RAILROAD EMPLOYEES AND THEIR UNIONS TO SECURE NEEDED HOSPITAL AND RELATED BENEFITS FOR RETIRED RAILROAD WORKERS AND THEIR DEPENDENTS

It is clear from our experience that the adverse circumstances inherent in the type of arrangement we now have made it impossible to achieve really satisfactory results by this approach. The administrative costs involved in handling individual applications, checking eligibility for participation and receiving and properly crediting individual monthly premium payments necessarily absorb a disproportionate share of the premium. Individual choice as to participation results in coverage of a very small segment of the group eligible to participate and probably involves a considerable degree of adverse selection.

The present premium rates under our policy for retired employees are $4.48 per month for employee benefits only $4.60 per month for dependents only, and $9.08 per month for employees and dependents benefits. The benefits are limited to an allowance of up to $8 per day for hospital room and board but not to exceed $480 for each period of disability which is inadequate to meet present-day costs. Benefits for hospital extras are restricted to a maximum of $80 for each period of disability. An allowance for ambulance service is