Premiums for the aged are, as a group, prohibitively high. Under a guaranteed renewable for life policy, the relatively high cost ($215 annually from age 25) of providing a reasonable level of medical care benefits, for a family consisting of a man, his wife and two dependent children would seem to price this form of coverage out of the market for low-income families and many in the middle-income brackets. This problem is even more acute for an older couple who, for example, would have to pay $277 annually if they were in the market for the same policy at age 65. The inability of older people to meet such insurance costs is brought into sharp focus by relating the premiums of $277 with the fact that 63 percent of all heads of spending units in the United States, age 65 and over, have annual incomes (before taxes) as well as savings of less than $2,000 (pp. 121, 122).

The commercial insurance's inability to provide health security for the aged at a reasonable premium is also evident from the ratio of net premium earned to losses incurred, to insurance companies in hospital and medical insurance in 1959 in New York. According to 1959 loss and expense ratios published by the New York Insurance Department the stock companies in that year had incurred so-called losses of 44.6 percent, mutual companies 34.4 percent, and life and accident and health companies 44.9 percent.

In insurance terminology "losses incurred" means claims paid. So, in 1959 the stock companies paid out 44.6 percent of the money they collected in premiums for health benefits and the mutual companies and the life and accident companies paid out 44.6 and 44.9 percent, respectively. Where did the rest of the money go? The stock companies paid out 34.2 percent of all the money they collected for brokerage fees, commissions and advertising, the mutual companies 29.7 percent, and the life and accident companies 31.5 percent for these purposes. In view of these statistics, it is clear that commercial insurance, by its method of doing business, is unable to provide health security for the aged, most of whom are on reduced incomes. It also explains to a great extent why insurance vendors in this State paid only 13.7 percent of the hospital bill for the aged.

Neither can the Kerr-Mills Act be considered a substitute for a Federal insurance program as contemplated by H.R. 4222. It is a desirable, and indeed a necessary, supplement to such a program, but the problems the aged face in meeting medical costs can hardly be solved by this legislative measure alone.

The question whether the medical assistance for the aged under the KerrMills Act is becoming effective is not just a matter of whether the States have set up programs but also of the scope of the new programs.

New York State, for instance, initiated its program of medical assistance for the aged on April 1, 1961, but is in implementing the Federal legislation on many aspects overly restrictive:

(1) The number of persons defined as eligible to receive benefits was fewer than could have been authorized.

(2) The State provisions including the administrative requirements of the New York State Department of Social Welfare reduce the benefits authorized by the Federal Government.

(3) The law does not authorize provision for eyeglasses and other eye aids, dental services and dentures. Nor are laboratory services, except when provided

by a hospital or a physician, included.

(4) The law forces the localities to treat every potential recipient for medical assistance as a pauper. Thus every aged person who may be eligible for medical assistance must be subjected to the same type of investigation employed in evaluating public assistance applicants. In fact, a more frequent followup is required than for public assistance cases.

(5) Under the State law certain relatives are considered legally responsible for contributing to the medical care of aged relatives and therefore subjected to an intensive financial investigation. This provision, not required in the Federal law, must undoubtedly discourage many elderly parents from seeking medical assistance for fear of involving their children. In many cases, the time, effort, and cost that must go into the location and investigation of legally responsible relatives must outweigh in cost the amount of the contribution that can be obained from such relatives.

(6) The law provides for physical therapy services but not rehabilitative services, although physical therapy is only one relatively small part of the rehabilitative services needed by the disabled aged.

All these and similar statutory and administrative restrictions, intensive investigations, and complicated procedures will, unfortunately, discourage many

deserving aged people from seeking the benefits of the Kerr-Mills Act under which they are eligible. In the long run, this will hurt the program and deny vital services. Many elderly persons in need of medical care and assistance will not avail themselves of vital services.

When the State law of March 26, 1961, was put into effect, it was estimated that it established-in words of Governor Rockefeller's message approving the bill-"a program to supply institutional and noninstitutional medical benefits to 170,000 needy aged persons in New York annually, effective April 1. Of these men and women, 92,000 have not previously been covered by any public medical assistance, and many of the remaining number will become eligible for medical services not previously available at public expense."

Experience thus far raises questions as to whether anywhere near these figures will ever be reached. The monthly summary Social Statistics published by the New York State Department of Social Welfare shows that in April 1961 the number of persons aided under the new program of medical assistance for the aged was only 5,589, and in May 1961-the latest month for which figures are available the number of those persons was 16,337. These figures, however, do not mean that the new law made medical care available to as many as 16,337 aged persons who could not get needed medical assistance under the New York State's preexisting old-age assistance program. About 15,000 out of these 16,337 in May 1961 and almost all of those 5,589 in April 1961 were former old-age assistance recipients who were transferred to the new medical assistance for the aged program so the State could take advantage of the more favorable Federal grants available under the Kerr-Mills Act.

But even when the estimated figure of 170,000 persons eligible to receive medical assistance under the new program will be achieved and when to this figure will be added 66,000 men and women who are receiving comparable care under old-age assistance and 32,000 persons treated in mental health and other public institutions of the State, the medical needs of many aged in this State will be far from being met. For this total of 268,000 elderly persons receiving help in meeting their health needs must be measured against a total over-65 population in the State of over 1,600,000, only about 20 percent of whom have incomes over $2,000 a year, while 60 percent of those over 65 receive less than $1,000 a year including social security.

In penetrating editorials entitled "A Challenge That Can't Be Ducked” and "A Workable Approach to Medical Care," the April 16, 1960, and February 18, 1961, issues of Business Week magazine have pointed out that the problem basically is that the aged are high-cost, high-risk, low-income customers.

"The essential question, therefore, is whether the social security system is the best way of meeting costs that cannot be avoided, in any case. We see no better alternative to social security for doing the essential job: spreading the burdens of old age over the years when people are younger, are working, and have more adequate incomes."

A similar opinion in support of financing of health benefits through social security has been expressed on numerous occasions by Gov. Nelson A. Rockefeller. In a statement presented to the Governor's conference in Glacier National Park, Mont., on June 29, 1960, he said:

"The basic mechanism for achieving this (health insurance for the aged) should be the contributory social insurance system, supported by payroll taxes, which exists in the old-age survivors, and disability insurance system. A separate 'health benefit trust fund' should be established in this system to account for the taxes received and benefits paid.

"This well-administered system has proved to be effective and economical. Its contributory nature has been completely accepted and is, indeed, strongly sup‐ ported by employees as well as their employers."

Thus in view of the proven inability of the insurance industry and present programs of public assistance to satisfy the medical needs of the aged, paying for health care through the time-tested social security system is the only common-sense method of minimizing the tragedy that illness imposes on older people. On behalf of the New York State AFL-CIO and its more than 2 million members, I respectfully urge the House Committee on Ways and Means to endorse and favorably report to the Congress the Anderson-King bill, H.R. 4222. The time is long overdue when we must bring into national focus through the Congress of the United States the importance of a nationwide effort to meet the interests and needs of our aged population. This committee has now the opportunity to do this. You can count upon our organization and the entire labor movement of New York State for genuine support in carrying out your mission.

OHIO AFL-CIO,

Hon. WILBUR D. MILLS,

Chairman, House Ways and Means Committee,

U.S. House of Representatives,
Washington, D.C.

Columbus, Ohio, August 15, 1961.

DEAR REPRESENTATIVE MILLS: The Ohio AFL-CIO urges the adoption of House bill 4222 to provide medical care for the aged through social security.

The American Medical Association has claimed that the Kerr-Mills bill will meet the need, but when H.B. 21 was introduced in the Ohio House of Representatives to authorize Ohio's participation in the provisions of this act, not a single representative of the medical profession appeared in behalf of the bill and H.B. 21 was buried by indefinite postponement by the Ohio House of Representatives' Committee on Government Operations.

According to the last census, Ohio has 897,124 citizens past 65 years of age. The percentage runs from 131⁄2 to nearly 16 percent in Ohio's hill country where employment opportunities are few.

To get any help with hospital bills in Ohio, persons past 65 need to qualify for aid for the aged and give the State a lien on their homes if they own an equity in one. The Anderson-King bill makes good commonsense. It enables workers to prepay a portion of their medical care bills over the years when they are working to provide for the years when they can no longer work and when private insurance cannot cover their risks at costs which are practical. Most important of all it saves them from the indignity of having to declare themselves paupers to get their health care costs taken care of. The workers of Ohio want the Anderson-King bill. We urge favorable action. Sincerely,

ELMER F. COPE, Secretary-Treasurer.

STATEMENT IN BEHALF OF OKLAHOMA STATE AFL-CIO,
BY SECRETARY J. J. CALDWELL

Mr. Chairman and members of the committee, knowing that you are always quite anxious ot alleviate problems that exist among our citizens and certain that you recognize there does exist a serious problem of adequate health care for our aged persons that should and can be remedied through proper and sufficient legislation and further recognizing that you can most aptly arrive at a realistic solution only after you have compiled and analyzed all the conditions that exist, we are pleased to have this opportunity to express our support of H.R. 4222 in behalf of the Oklahoma AFL-CIO.

Having attended a number of conferences in Oklahoma and the White House Conference on the Aging in Washington when the subject of medical care for the aged was given considerable study, we are thoroughly convinced that to more adequately meet this ever-increasing problem, we must have legislation providing for prepaid medical care through social security as was so ably stated by the Income Maintenance Section of the White House Conference last January which I shall not repeat here, as I am sure you are already familiary with it.

Those who have opposed such legislation have attempted to thoroughly confuse the public by injecting unfounded claims of "socialized medicine" and "individual freedom" when in fact neither of these are at issue in the bill being considered.

One member of the medical profession expressed to me that such legislation would seriously lower the quality of medical care, and when he was asked if he was indicating the profession would deliberately render lower quality care his answer was "No"; but that this would make medical care available to such great additional numbers of the aged that they simply would not have the staff and facilities to render quality treatment to this increased number. This can only be taken as a direct admission from the opponents of this act that there are many, many people now needing medical care that are not now receiving it under any of the several means in existence, giving further sound argument for the needs of H.R. 4222.

Regarding the “individual freedom" issue posed by the opposition, we simply say you cannot exercise individual freedom in a society of people but rather we should concern ourselves more with "individual responsibility" and that it is

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not only a privilege but a duty of our Government to impose rules that will require its citizens to accept individual responsibility when they fail to do so on their own.

We are convinced that it is an obligation of our Government to require an individual during his years of gainful employment, to make provisions for his needs of medical care during his later years of life to assure avoiding the possi bility that he will become an undue burden on the society, and we are further convinced this can only be done by adding a social security approach to the several other means that now exist.

I am in full agreement that we need and must continue to have the several methods now in existence for providing medical care for the aged and cannot afford to eliminate any one of them for they are all rendering a needed service insofar as they can, but the record plainly shows all of them combined are not adequate.

A few statistics from the records in Oklahoma certainly bear this out. For example, there are 249,000 persons aged 65 or over in Oklahoma. The latest figure of total employment of wage and salaried workers is 581,300 or slightly more than twice as many that are gainfully employed as is the number over 65. We cannot possibly conceive that the earnings of those gainfully employed are sufficient to provide adequate medical care out of their current income for the such high percentage of those over 65 in need of treatment.

Although the Kerr-Mills Act has been put in effect in Oklahoma, and we are quite grateful for the service it has made available to those in need, because of the norm established to qualify for assistance under this act, the latest figures available to us show that only 190 persons received assistance in the month of April 1961, with a total payment for recipients of $42,302 or an average of $222.64 per person. On an annual basis this would amount to approximately $507,000 or an average of about $2 per person for those over 65 years of age. When a single office call to the doctor costs $5, the average hospital charge for a bed in a semiprivate room is $11 per day and even the cost of a bottle of aspirin is as much as 75 cents, I think you will readily agree the funds provided in Oklahoma are not adequate.

When the Kerr-Mills bill was enacted it was publicized that this would make available some $8 mililon annually for treatment of the aged in need but due to the norm for eligibility and the pride that our elderly citizens rightfully retain that they do not want to go begging for charity, only approximately one sixteenth of this amount is being made available.

Another point on the inadequacy of Kerr-Mills or rather on the inequity is that because of the needs requirement and the norm adopted in Oklahoma as well as other States, a person with not more than $1,500 income can get payment for a $5 medical bill but one who may have a $1,600 income and a $2,000 medical bill cannot get payment for one cent of his medical costs.

Passage of H.R. 4222 will overcome this serious inequity of providing medical care for the aged and eliminate many other problems that now exist in this area. We therefore strongly urge favorable action and unrelenting support for enactment of H.R. 4222.

:STATEMENT OF JAMES T. MARR, EXECUTIVE SECRETARY OF THE OREGON AFL-CIO

In compliance with the invitation of your chief counsel the following information is submitted:

Our organization is on record in support of a health program for all citizens of the United States under the social security program.

The need for a national health program of this type is no better exemplified than in the following comparison of the present medicare program as outlined for Oregon and the Health Insurance Benefits Act of 1961 (H.R. 4222).

Of the 184,000 persons in Oregon 65 years and older, the medicare program for this State will probably provide for 55,000.

The Oregon Legislature this year set up a $9-per-recipient-per-month average limit on medical assistance under the program to those over 65 with incomes of $1,400 annually, single, or $2,000 for couples, and other limited income or insurance.

The Oregon State Welfare Commission charged with working out the actual program has determined that hospital care will be provided for 9 days a year with an initial $65 deductible.

Medical care would be provided for eight visits a year after two visits are paid for by the recipient, with full surgical coverage.

However, although this program is not to go into effect until November of this year, the chairman of the welfare commission has already suggested that the commission consider revision of this program to provide that hospital care be changed from the 9 days a year with an initial $65 deductible to 60 days a year subject to $10 a day deductible for the first 10 days.

Medical care would be changed from eight visits a year, following two visits paid by the recipient, with full surgical coverage, to a maximum of $500 a year for medical and surgical care, with the patient paying the first $50.

Under H.R. 4222, 169,000 persons aged 65 and over in Oregon would be entitled to receive health benefits. The amount that would be paid in the first year of this program in Oregon, it is estimated, would be $15,200,000. (The amount available under the present medicare program in Oregon will be less than $6 million a year.

With the average hospital charge for bed and board of $21 a day in a semiprivate room and $19 if six or more adults are in one room, in the interests of the thousands of persons over 65 in the State of Oregon we have no other recourse than to support H.R. 4222.

The many who are excluded under the present medicare program, its high cost to the individual should he be able to use it, are serious deterrents to the all-important point that persons in need of medical assistance seek it early. Again, we say, upon the basis of comparison between medicare as we know it in Oregon and the Anderson-King bill (H.R. 4222), we urge your committee to act favorably upon H.R. 4222.

STATEMENT OF PENNSYLVANIA AFL-CIO, BY HARRY BLOCK, SECRETARY

This is an ardent plea on behalf of the Pennsylvania AFL-CIO's almost 2 million members for favorable consideration by the House Ways and Means Committee and early adoption by the Congress of the Anderson-King bill, H.R. 4222, to insure adequate health care for our aging citizens through payments into the social security system.

The opinions and suggestions contained herein are not merely those of the officers of the Pennsylvania AFL-CIO. They represent the unanimous thinking and desires of the rank and file membership.

Our official position on this vital matter was set forth on May 24, 1961, in resolution No. 10 unanimously adopted at the second annual convention of this organization at Hotel Sheraton, Philadelphia, copy of which is attached.

The fundamental and unequivocal views expressed in that resolution are identical with those voiced down through the years by delegates to the conventions of the Pennsylvania Federation of Labor and the Pennsylvania CIO Council prior to their merger in June 1960 at the first convention at Pittsburgh. The inadequate, stopgap proposal to meet the health needs of our aging fellow citizens passed by the 86th Congress, known as the Kerr-Mills bill, has not yet become applicable to Pennsylvania. Only recently, on July 26, 1961, was the necessary enabling act No. 379 signed by Governor David L. Lawrence after the House and Senate at Harrisburg passed house bill 1595.

Governor Lawrence voiced the sincere belief of the Pennsylvania AFL-CIO members when he told the press on the day he signed the act that he was affixing his signature "reluctantly." He termed the measure "A poor and inadequate substitute for a social-security-based program of medical aid to the aged."

Governor Lawrence on that occasion also pinpointed the Pennsylvania AFLCIO principal objection to the existing Kerr-Mills proposal-the requirement that aged applicants must subscribe to a pauper's oath by submitting to a “means test."

“Our Governor said in support of President Kennedy's program and the Anderson-King bill, "If this is accomplished by Congress, our older citizens will have a clear-cut right to medical care without asking for public assistance."

Pennsylvania AFL-CIO members and officers feel it is an affront to human dignity to depend upon the existing Kerr-Mills technique to provide our senior citizens with adequate medical care only by having them subscribe to the humiliating announcement to their neighbors that they are "medically indigent."

Our high welfare department caseload in Pennsylvania, the worst hit State in the Nation from the standpoint of depressed areas and total number of unemployed, clearly indicates how vital it is that H.R. 4222 be adopted and put into force.