STATEMENT OF HON. FERNAND J. ST. GERMAIN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF RHODE ISLAND

Mr. ST. GERMAIN. I am very grateful for the opportunity to present a statement to the committee in support of legislation to provide medical care for the aged under the social security program.

H.R. 4168, which I have introduced, is an updated version of the Forand bill. I would like to say that whatever legislation relating to medical care for the aged is approved, be it my own measure, the King bill (H.R. 4222), or any other, it will be a tribute to the Honorable Aime J. Forand, my predecessor, who fought so diligently to provide the means whereby our aged will receive the medical care they need under an equitable system, with all the dignity to which they are entitled.

At this time I shall not attempt to bombard your committee with facts, figures, and quotations. You have been informed in detail, I am sure, as to the economic status of the aged, and the need for legislation in the area with which we are concerned is obvious from that data; you have been informed as to the prohibitive costs of comprehensive private insurance plans-it is a fact that private insurance companies cannot remain economically in balance by providing comprehensive coverage at low premiums. You have been informed as to rising medical costs and as to the increased need of our senior citizens for the talents, facilities, and services of our doctors and hospitals. These have been documented and, I am sure, will continue to be brought to your attention as the hearings progress.

In my judgment, gentlemen, those who oppose this legislation are misinformed as to its purposes, its provisions, and its area of concern. A careful reading of the proposals and consideration of the objections will show an incongruence. The opponents have used labels and false reasoning and have avoided the issues at stake in this legislation. It has been stated that the number of doctors will decrease, service will be curtailed, and doctors and facilities will be overtaxed if the proposed legislation is approved. I have more faith in the men and women of America. Thousands of our young citizens are entering the medical profession each year. They do so not to find an easy existence, for we all know that the general practitioner and the specialist lead an unselfish and work-filled life. They do not enter into the profession to accumulate vast wealth, though such may be the rewards of their diligent efforts, but to serve their fellow men. We may find, rather than a decrease, an increase in the number of our citizens who will find fulfillment in the medical profession. This may be so because those dedicated to that profession will find that another segment of the population is enabled to receive the cure it needs, as the doctors find that the Nation is willing to sacrifice so that the aged will be able to receive the services of the medical profession.

The most frequent charge laid to this type of legislation is made with the same blind wording that has been hurled at all social legislation in the last few decades. This blind wording has labeled the social security program, Blue Cross, and Blue Shield, and attempts at public welfare legislation-public housing, Federal highway programs, and grants to educational institutions. This is not to say that there cannot be legitimate objection to these legislative programs.

The part that is most objectionable to me, gentlemen, is that far too often the blind wording of "socialism" has stamped a program, thereby shutting off all sane discussion of the merits and justification of the proposed programs.

Medical care for the aged has been so labeled. I shall not question the motives of those groups which have so tagged this much needed and equitable system for helping our aged meet their ever-rising medical costs. I shall only say that the sooner such organizations and associations stop applying labels and look at the facts, figures, needs, and place of responsibility, the sooner we shall see clearly discussed and enacted legislation which our senior citizens need.

There are many individual situations which bring into clear focus the circumstances surrounding the health needs of the aged. One such circumstance has been brought to my attention by a Rhode Island industrialist. The man involved had worked for 16 years and was supporting his family and his mother-in-law. He had for his family and himself few of the comforts to which they were entitled. Upon the illness of his mother-in-law, these few comforts were lost. He and his family had to sacrifice those few comforts they had earned in order to pay for the medical care which his mother-in-law needed. Can we not provide medical care for our aged without having our families lose the few comforts they have earned? Can we not provide medical care for the aged under an equitable plan which allows our citizens to live in dignity? Such can be done by enactment of the legislation which your committee is considering.

When Government sees its responsibilities in some phase of our national life and the Congress passes legislation to put into operation effectual Government aid, it is not socialism, it is not State control, nor Federal regulation. The Federal Government must exercise its responsibilities when there is an area in which it can provide the necessary funds or machinery which the individual, the local area, or the State cannot provide. The legislation your committee is presently considering is just such legislation. It is an area where the Federal Government has a responsibility, but it will not socialize medicine, it will not regulate medicine, nor will it control the medical profession.

It is my hope that the legislation passed by the Congress will provide medical care for the aged under the social security program; that it will provide coverage of surgical fees and hospital and nursing home fees as provided for in H.R. 4168; that it will cover all OASDI persons, including employed aged and younger dependents.

Enactment of the legislation before your committee will enable our aged to receive the care they need as their years progress under an equitable, just, and dignified system.

I thank your committee for the opportunity to state my views and support of the proposals before the committee. It is legislation that is needed and desired by our people, both the aged and those who have not yet reached that stage. I hope action will be taken by the Congress as soon as possible.

Mr. KING. Mr. Chairman, it is my privilege to request at this time that there be included in the record a statement of the Governor of my State of California, Hon. Edmund G. Brown, strongly urging the enactment of my bill, H.R. 4222, and setting forth detailed rea

sons for the position taken. In his characteristic fashion, Governor Brown has made an eloquent case for enactment of this legislation. I am very pleased to have the privilege to request that this be included in the record at the proper point.

(The above-mentioned statement follows:)

STATEMENT OF EDMUND G. BROWN, GOVERNOR OF CALIFORNIA, ON H.R. 4222, HEALTH INSURANCE FOR THE AGED

I appreciate this opportunity to present my position on H.R. 4222, introduced in the House of Representatives at the request of the President by Representative Cecil R. King, of California. At the outset, I wish to declare my support and endorsement of H.R. 4222 and its companion measure in the Senate, S. 909, introduced by Senator Clinton Anderson, of New Mexico. The King-Anderson bill is an excellent beginning in providing for the vast majority of our Nation's aged persons the type of basic financial protection they so desperately need to offset the rising costs of medical care in a period of their lifetime when they are least able to meet such costs.

There are several reasons why the enactment by Congress of a national program of health insurance for aged persons, which is based upon the social insurance principles of the Social Security Act, is desirable and long overdue. The balance of this statement is devoted to these reasons which are separately identified below for the convenience of the members of the committee in your consideration of this important measure.

1. The inability to afford decent and proper health care is one of the major problems of the aged

We, in California, are acutely aware and genuinely concerned with the problems faced by our senior citizens. Today, in California, there are more than 1,400,000 aged persons representing about 8.5 percent of our total population. The number of aged persons in California is increasing at the rate of 40,000 persons each year.

We do not look upon our older persons as mere statistics. We recognize that as individuals they have problems which include, for many, a lack of suitable housing; income for adequate food; and funds for medical care to the actual degree needed; and an opportunity to continue to participate as respected and valued members of their family, their community, their State and Nation. I am sure that the members of this committee are familiar with the dimensions of these problems. They constitute foremost challenges for solutions by all governmental levels, by industry, by labor, and by the great voluntary and religious organizations of this country.

During the past year these concerns have received concentrated attention throughout the United States. The various local and State conferences on aging and the White House Conference on Aging brought the experience, intelligence, and deep concern of those most intimately to bear on the serious problems affecting older people. In California, the legislative program which we recommended to the legislature this year concerning our senior citizens came from the people themselves. Nearly all of the recommendations which we made to the members of the California Legislature were based upon positions taken during the Governor's Conference on Aging held in Sacramento last October. This is why the 1961 session of the California Legislature enacted a program for the aged that places California in a position second to none among the States. We are very proud of this outstanding program which includes measures to combat job discrimination because of age; recognize the need for retraining for older workers who need new skills to remain productive parts of our economy; to provide suitable low-cost housing; to increase the amount of income and health services of aged persons receiving assistance from our public aid program of oldage security; and to begin a pilot program of State matching grants to encourage and promote local community programs and services for our senior citizens. Another major measure enacted implements the provisions of the Mills-Kerr bill enacted by Congress last year for those aged persons not receiving assistance but who need help in meeting their medical expenses.

Yet, as real as these accomplishments are, much more needs to be done before we can say that as a nation we have met the basic needs of the aged. Certainly, one of their most basic requirements is adequate protection against the costs of medical care. For example, the 1960 census data showed 1,360,000 persons age

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65 and over, in California, including approximately 555,000 past the age of 75 and about 185,000 past 85. About two-thirds, or 869,000, had incomes of less than $2,000. Some 250,000 persons in this group receive assistance under the Federal-State public aid program of old-age assistance. The remaining 600,000 have barely enough to meet their day-to-day needs, much less to cover the costs of prolonged illness and hospitalization. California's aged are more fortunate than most States where the census shows a higher proportion of aged in this low-income category.

Additionally, studies conducted by the Federal Government and others in past years bear out the recognized fact that the need for health care increases with advancing age. I will avoid reference to the specific findings of these studies which include the National Health Survey; the 1959 Report to the Committee on Ways and Means on Hospitalization of OASDI Beneficiaries by the Department of Health, Education, and Welfare; the reports of the Rockefeller Foundation; the recent studies of the U.S. Senate Special Committee on Aging; and the Chart Book of the White House Conference on Aging, issued by the Federal Council on Aging under the chairmanship of Arthur S. Flemming, former Secretary of Health, Education, and Welfare.

These same studies and reports also show clearly that the problem is not met by either private health insurance or existing Federal and State legislation. As a nation, we are still without an administratively feasible and fiscally sound program that would afford the majority of our older citizens protection against such costs and, at the same time, guarantee that they receive health care under conditions which recognize their personal dignity and worth. While it is true that about 46 percent of the aged have some form of hospital insurance, it is often limited protection. The 1957 study of couples receiving social security who had hospital insurance showed that only one-fifth had as much as half of their total medical bills paid by their insurance. One-sixth reported none of their costs were met by their insurance.

The same reports showed that voluntary insurance cannot be relied upon as the major approach to this problem, especially with the known higher incidence of health care needs and limited incomes of the majority of our senior citizens. It is recognized that the costs of medical care and health care will continue to rise in the future at the rate of 5 percent annually according to most estimates. Under such conditions, it seems obvious that premium rates of voluntary health plans will have to be adjusted upward accordingly. It is doubtful that voluntary health insurance can expand to the point where it can be relied upon by the majority of the aged, either now or in the near future.

2. The King-Anderson bill is the most fiscally sound, administratively feasible, and humane solution to this problem

H.R. 4222 is based upon the utilization of the proven contributory social insurance principle. This same principle over the years has been used successfully to provide for a basic income upon retirement in old age to protect against the risks of permanent disability, and to provide against the loss of income to the family, caused by the death of the breadwinner. The extension of this same principle to pay for much of the health care costs of old age is eminently sound. It would mean that individuals could build up a prepaid system of health coverage for the period of retirement while they are working and able to pay. The program would be administered under the present social security and railroad retirement programs in the Social Security Act which have a record of providing maximum benefits at a minimum administrative expense. Most important, enactment of H.R. 4222 would avoid the continued pauperization of many aged citizens who, after lengthy periods as wage earners and contributors must virtually exhaust their personal and family resources in order to qualify for help in a medical crisis from either public or private sources. That this condition should exist in a country as rich and as enlightened as the United States borders on the indefensible.

3. H.R. 4222 has been described as a broad but modest proposal

Principally, it is designed to provide a way of paying the costs of hospital care, nursing home care, certain outpatient diagnostic services, and some allied services in the home, such as visiting nurse and homemaker services within certain limits as set forth in the bill. Since it excludes payment of such services as private physicians and dental services, drugs, and other forms of health care, many persons will want and need to purchase through available health plans coverage against such costs. Their ability to do so would be

facilitated if they had the form of protection that H.R. 4222 would provide. The insurance industry would then be able to pioneer in flexible and supplementary coverage which could result in comprehensive coverage, or most costs of medical care, available to all but a fraction of the total group of the aged. The argument is heard that enactment of H.R. 4222 would be detrimental to voluntary health insurance as well as undermine individual incentive to plan and save for their retirement years. The same argument was raised early in the history of the social security program. That the dire predictions of the thirties never came to pass is clear as a review of the volume of private life and pension insurance now held in this country will reveal. This particular argument has a tired sound, and I hope these hearings will put it to rest. 4. H.R. 4222 is not socialized medicine. It has been carefully developed so that the private patient-physician relationship will be maintained

Critics of the bill have charged, or implied, that its provisions are "socialized medicine." This is fallacious. The bill provides a sound method of financing certain health-care costs only. It does not place the Federal Government in the position of operating and manning a program of health services. The physician remains absolutely free to prescribe and carry out the treatment indicated. The choice of hospital or physicians remains with the patient, except that the hospital must have agreed to participate in the proposed program. The standards for the various services to be provided are consistent with those adhered to by the recognized health professions and would follow the same standards now already practiced by such groups. Their purpose is to guarantee a certain quality of care and it is only reasonable that they be included.

The passage of H.R. 4222 should, in fact, strengthen, not weaken, the relationship between a doctor and his aged patient. The anxiety that most persons have at a time when hospitalization and surgery is pending should be lessened, especially if both the doctor and the patient know that no barriers to the care indicated exist. Elimination of this fundamental worry over the economic costs of care would expedite, in most instances, the recommendations made by the physician, particularly when hospital care is necessary. On this score, I doubt whether any surveys or studies have adequately plumbed the depths of feelings of desperation that many aged persons have when they are confronted with a long-term illness requiring surgery, hospitalization, and a period of convalescent and aftercare services. I hope there will be some testimony during these hearings on this point, which most practicing physicians recognize.

5. The Kerr-Mills bill is not the answer

As mentioned, California enacted legislation this year which implemented the medical assistance to the aged provisions of the Kerr-Mills bill. While I did not like its provisions requiring a means tests for aged people not receiving old-age assistance, I recognized that some of our older citizens would benefit from the somewhat complicated terms of the act.

Accordingly, the program which was recommended to and enacted by the legislature is designed to assist the chronically ill aged person who requires a lengthy period of hospital or nursing-home care. California Senate bill 325, as enacted, provides for the payment of such medical expenses after the first 30 days for persons in hospitals, nursing homes, or receiving care in their own homes. For fiscal reasons, it was necessary to limit eligibility to persons age 65 and over, whose average monthly income over the next 12 months is not expected to exceed the maximum State old-age assistance grant plus the cost of medical care.

Our State department of social welfare estimates that in fiscal year 1962-63, the first full year of operation, some 60,000 persons will receive help under this program. The total cost for the same year is estimated at $79.5 million, including $39.8 million in Federal funds, $20.3 million in State funds, and $19.4 million from county funds.

Despite these large initial expenditures, it is recognized that the program which we have established in California has limitations. Under it, priority is given to serving the chronically ill aged, a group whose resources are often wiped out when catastrophic, long-term illness strikes. In order to qualify, most heretofore financially independent aged persons will have to use their limited resources until they reach an assistance level. Then, on an individual basis, their claims for aid will need to be investigated by our county departments of social welfare.

We would have preferred a broader and more comprehensive program, one that would have covered short-term hospital care, related surgical expenses,