Among persons age 65 and older, approximately 46 percent were covered by some form of hospital insurance; however, only 37.6 percent of those over 65 and unemployed were found to have hospital insurance coverage. A related finding was that although 14.9 percent of the total U.S. population had an annual family income of less than $2,000, only 7.4 percent of the persons with hospital insurance were in this income group.

An additional fact that must be weighed in considering voluntary health insurance is that coverage does not automatically mean that all of the person's medical costs nor even all hospital costs are met by insurance. Even though 37.6 percent of the retired aged have hospital insurance, this could mean that in many cases as much as 60 or 70 percent of the total medical bill in a crisis situation would have to be paid from other sources.

2. Retirement income.-Again there would be agreement that aged persons who have an adequate income even though they are retired should pay for their own medical care. However, the facts are such as to lead me to conclude that by far the majority of the retired aged do not have an income sufficient for this purpose. The fact that a greater number of retired aged do not carry health insurance policies must also be closely related to income statistics.

The most telling figures in this respect are those published in the Statistical Abstract of the United States, 1959. Table No. 415 shows that 54.4 percent of all persons 65 and over in the United States had no money income or less than $1,000 in 1957. Another 23.8 percent had a money income between $1,000 and $1,999 for that year. This means that almost 8 out of every 10 persons in the Nation over 65 had less than $167 per month income, and over half had less than $100 per month. It must be remembered that these figures include old-age assistance and social security, which in fact would be the primary sources of the income. As one indication of their adequacy or inadequacy, these figures may be compared with the budget costs for a retired elderly couple as prepared in 1959 by the Bureau of Labor Statistics. For a couple not in need of medical care, it was estimated that a modest but adequate level of living in Kansas City would require $3,034 per year, and in St. Louis $3,099.

3. Other resources.-Certainly the person who has savings, stocks or bonds, salable personal or real property other than his home, or other liquid assets should be expected to pay for his medical care. There are a number of aged persons in this position; again, their number would be difficult if not impossible to determine. In view of the income figures given above, it is difficult to see how there could be a great number in this favored position. Certainly after the person had been retired for 5 or 10 or 15 years there would be many whose position had changed completely from what it was at time of retirement.

Some persons have inferred that the individual should pay his own medical costs even though it means cashing in his only life insurance policy, or mortgaging or selling the home in which the person lives. While some aged persons do just that, I believe any policy which would require such action should be examined most carefully. It is true that the medical bill would be marked paid, but the community might eventually have to pay out a far greater amount in the form of assistance for shelter or other costs.

B. The immediate family and other relatives

Missouri has no compulsory relative responsibility law, other than that the husband or wife can be held responsible for the spouse, and the parent for a minor child. Many adult children are and have been paying on a voluntary basis part or all of the medical bill for their aged parents. This again is something to be encouraged and fostered. We have often seen children pay for a one-time medical bill even though it may be high, where they have convinced themselves that they are unable to assist their parents on a continuing monthby-month basis for the other necessities of life. We have also noted that it is often the adult child with apparently the least resources who is more willing to help his parents in such an emergency. In many cases a real sacrifice has been made.

The question of when an adult child with his own family is able to pay a sizable medical bill for an aged parent is most difficult to decide or determine. For example, should be pay a large hospital bill if doing so means a reduction in the amount of education which one of his children may obtain? In how many cases will the aged parent refrain from asking for help from the children, or even letting them know that medical care is needed, knowing the struggle the children are having with their own financial problems?

It must be remembered that at present the aged parent who has children who are poor, the aged parent who has children who are in moderate er well-to-do circumstances but who do not choose to or who believe they are unable to help their parent, and the aged person who has no children are in exactly the same circumstances; neither of them has a resource for paying medical bills.

C. The local community

The next rung of the ladder would involve other persons and organizations in the city or county in which the aged person lives. It would include the private or voluntary organizations as well as those supported by local tax funds. The major sources of help in meeting the cost of medical care for indigent persons would probably be the following, recognizing that even among these the variation from community to community might be the whole range from no help to full help for certain persons:

1. Churches, civic or charitable organizations, and United Funds.-If a general evaluation on a statewide basis can be made of such a diverse group, it would have to be that in most cases the payment for medical care, if any, is done on a very limited basis, and lacks much in covering total need even in the immediate community. Some churches help support their own denominational hospitals, and occasionally pay part or all of a medical bill for one of their own members. The Lions Clubs have a rather widely operating plan for the purchasing of eyeglasses, and numerous other organizations have plans for providing help in paying for some types of medical care. In some areas the Salvation Army and similar organizations have a limited budget for paying for medical care. Most of the United Funds make some allocation of funds to hospitals and to other medical care agencies, in a partial attempt at offsetting the cost of the free care given.

2. The professional group.—We know that a great amount of free care is given by doctors and dentists. However, I have been unable to find reliable figures as to the extent of this donation of free time. A problem in trying to make such a determination has always been the "gray area" which occurs in trying to properly distinguish the "charity" case from the "bad debt" case. Whether free drugs and medicine are given in any sizable quantity also seems impossible of determination. Again there is no question but that some is given, particularly where the financial circumstances are known to the druggist. The lack of specific information again suggests that this probably is not being done on any widescale basis. Again there would surely be majority agreement that neither the practitioner nor the supplier of medical goods or services should be expected to bear a major part of the cost of medical care for the indigent.

3. The hospital.-Many persons appear to have the idea that since a hospital is organized on a nonprofit and tax-exempt basis, and that since most such hospitals have at least some income from United Fund, church groups, or gifts or donations, that the hospital should therefore be willing and able to furnish whatever free care the community needs. A close look at the annual reports and the financial statements of several of these institutions should be sufficient to quickly change such an opinion. There may have been a time in the past when this was possible, but with the changes in population, in length of life span, in attitude toward hospital care, and others, this day has long since vanished. The following are excerpts from various reports which I believe will show more nearly the actual situation:

(a) The very comprehensive study of "Public Health and Hospital in the St. Louis Area," done by the American Public Health Association in 1957, showed that inpatient free and part-pay care for patients in 17 hospitals in St. Louis and St. Louis County was estimated at $1,776,418 for the year 1955.

(b) One of the largest voluntary hospitals in St. Louis showed in its annual report for 1960 a figure of $352,000 for charity allowances and another $164,000 for bad debts and other deductions.

(c) Another large voluntary hospital in St. Louis reports almost 16,000 days of totally free care, plus another 2,600 days of care for which only partial pay was received during 1960.

(d) In a small sectarian hospital in outstate Missouri, the annual report shows that in 1960 1 out of every 12 patients admitted to the hospital was unable to pay the full cost of his care-9 percent of the patients were charity patients in whole or in part.

(e) In the month of March 1961, payments through the vendor plan were made to hospitals by the Missouri Division of Welfare for 827 oldage assistance recipients. The total billed cost for these patients was $257,306. The total of the vendor payments was $144,271, which was 56.1 percent of the billed charges. The hospitals received $28,583 as total payments from all other sources for these patients, or 11.1 percent of the billed charges. This left the hospitals with the task of absorbing from other income the unpaid balance of $84,452, almost one-third of the billed charges. (f) The following statements appeared in an editorial in Hospitals, the journal of the American Hospital Association, in the issue of April 16, 1960: "Philadelphia's Hahnemann Hospital, for example, found that despite payments by State and community chest agencies, charity service rendered during 1959 cost the hospital approximately $850,000 * * *. Voluntary hospitals in New York City are in the grip of a financial crisis brought on through providing charity services; the situation is so urgent that 15 hospitals have announced that they may shortly have to close their doors unless prompt and drastic action is taken. The annual deficit caused by this charitable activity exceeds $22 million."

(g) The March 1961 issue of the Bulletin of the Hospital Association of Pennsylvania carried this headline: "Hospital Crumbles Under Huge Charity Burden." The story concerned the closing to indigents of the Chester Hospital in Chester, Pa. "Credit exhausted, much of the endowment funds cashed in and $212,000 in debt, the board took a full-page newspaper advertisement to announce that it must on March 1 close 17 free clinics and cease accepting those who cannot pay."

It seems to me that these excerpts speak most ably for themselves. Frank Groner, presidnet of the American Hospital Association, summarized this seg ment of the hospital problem in this statement (Hospitals, Apr. 1, 1961): "Philosophically, every group in our society should pay its own way. But many hospitals are forced to make extra charges to patients with Blue Cross or commercial insurance or to those who pay their own bill to make up for free care given the indigent and medically indigent patient."

In the same editorial, Mr. Groner highlights another major hospital problem when he states: "Hospital wages are becoming more comparable to those of industry; they have instituted benefit programs similar to those of business." However, the wages, at least for the aids, attendants, dietary helpers, laundry and maintenance workers, and others are apparently not entirely comparable to industry, since the same issue records the fact that nonprofit hospitals were specifically excluded from the administration's minimum wage bill. I believe it would be safe to say that in Missouri there are few hospitals, outside of some in the urban areas, whose lowest paid full-time employees receive as much as $1 per hour. Wages of 75 and 80 cents an hour seem to be fairly common. As long as that condition holds, it would appear that the hospital employees are being expected to bear too great an individual burden of contributing to the care of the medically indigent.

4. City governments.-St. Louis City, St. Louis County, Kansas City, and Springfield have city operated and financed hospitals and clinics for medically indigent residents of those cities. St. Joseph has an arrangement whereby hospital care is purchased from the voluntary hospitals. Each of the major eities, therefore, has a far more comprehensive plan for giving medical treatment to the indigent than any other areas of the State (with possibly one or two exceptions). Yet even in these urban areas it is not possible to state that all the medically indigent receive all needed medical care. This is reflected time after time in the case records and the experiences of the social workers and the visiting nurses. It is reflected also in the letters we frequently receive from recipients of public assistance in those cities when they are under pressure to pay a medical bill they have incurred. That the hospitals and clinics are not able to give all the care they know is needed also seems to be reflected in the budget discussions before the city governing boards. So long as the city governments continue to meet the increasing costs of these institutions, these five communities have at least minimum adequate provisions for hospital and some clinic care for the very poorest segment of their population. Very few other cities in the State are attempting to underwrite medical care costs. There are some cities which employ a city physician, and some who pay a limited number of bills for medicine, hospital care, and physician services.

5. County governments.--With the exception of Pettis and Clay Counties, and possibly one or two others, there is no county which finances a comprehensive

medical care program. Even where the county court is making a relatively large effort in this direction, the payments are often on a cut-rate basis. There are perhaps 10 or 12 out of 109 rural counties which levy a tax for hospital purposes, and the income is used by the county hospital. Generally this money is supposed to be used for building, equipment, or maintenance purposes, but in some cases it is used to underwrite the unpaid patient bills.

State law provides that a county is to support poor persons in the county, and that "sick persons who are unable to support themselves, and when there are no other persons required by law and able to maintain them, shall be deemed poor persons." As a matter of historical interest, this law was originally contained in territorial laws dated January 2, 1815, and is still in effect. There are a number of counties whose tax revenue is so low that they are unable to finance anything like an adequate medical care program. There are other counties in which a real effort is made within limited finances. A very few counties will spend as much as $30,000 per year for this purpose. While the situation has probably improved slightly, the survey published in 1955 by the Missouri Health Council is still the most authentic survey of the rural situation. The study of 27 counties painted a rather bleak picture insofar as establishing the rural county as a financial resource for the medically indigent.

D. The State and Federal Government

I have taken considerable time in arriving at this rung of the ladder, primarily for the benefit of those who are saying that there is no problem, there is no need for any change, that "necessary medical care is available to all, regardless of income." Apparently a very sizable number of persons are not aware of the actual situation, or else are not willing to face it. After all, this would be the easy way out because then we would not have to worry about paying increased taxes for this purpose-and this can be a most attractive argument. Even though I have spent considerable time on it, it is still a very sketchy review of this tremendously large and complex problem. I hope most of you will be able to agree that it has been a fairly objective review, and that it shows without question that there is a large problem and that something must be done about it.

I am also grouping the State and Federal Government together in this section, and would like to explain the reason for this. The history of the State-operated medical care program goes back to at least the 1930's and in a few cases probably earlier. During that time about 15 or 16 States (Illinois, Kansas, Minnesota, North Dakota, and a number of Eastern States) established a program of adequate medical care of all kinds for the persons on assistance rolls, and paid by far the bulk of the costs (which in some States were very large) out of State funds. For example, Pennsylvania has had such a program since 1938, and it was directly due to the efforts of the Medical Society of the State of Pennsylvania that the plan was presented to their State legislature.

This situation was not true in Missouri. Federal matching for medical care first became available in 1956. Missouri's vendor plan for hospital care became effective in September 1959, after the State law was amended to enable Missouri to participate in the Federal plan. Federal dollars have paid more than half of the costs of our hospital care vendor program since that time.

The same statement regarding joint financing also applies to the money payments made to old-age assistance recipients. Since the beginning of that program in Missouri in 1935, the cost of necessary medical care has been one of the budgeted items in each case. The actual spending of the check has been and is the responsibility of the recipient, and many medical bills have been paid through the years by those recipients. On the other hand, the State law has always included a maximum payment limit, beginning with $30 in 1935 and now set at $65. In many, many cases it has not been possible for the recipient to pay for his food, shelter, and utilities, and still have money enough to pay the druggist, the doctor, or the hospital. No one will ever know how many of them, because of fear of the costs, postponed getting medical and hospital care until the need was overwhelming.

1. The Kerr-Mills laws.-The approval of Public Law 86-778 on September 13, 1960, marked another major improvement in the legislation affecting the provision of medical care for the indigent persons in this Nation. There were two major parts to this bill, but one of them seems to be getting much more public attention than the other.

The less dramatic change is the one which increases Federal funds to the States for medical services for the 2.4 million aged in the Nation who are on old-age assistance. The matching formula was changed, in effect raising the

matchable average from $65 to $77 per recipient, provided that not more than $12 of the average expended per recipient is for some type of medical care and giving the States an extra 15 percent above the regular matching formula on the amount expended each month (within the $12 average) in the form of vendor medical payments. The purpose of this change was to encourage the States either to initiate or to expand their medical care programs for that group of aged persons which receives old-age assistance.

The other change effected by Kerr-Mills is that any State wishing to do so may now establish a new program known as medical assistance for the aged (MAA). In brief, the State may establish a medical care program for its needy citizens over 65 who are not on old-age assistance, and the Federal Government's share in the total amount expended by the States for medical assistance for the aged will range from 50 to 80 percent, under a formula based primarily on per capita income. In Missouri the cost would be split almost dollar

for dollar (the Federal share would be about 52 percent, and the State's share about 48 percent). The State defines who will be considered as a needy person under this law, setting upper limits on property and income. An investigation would then be made in each case by the county welfare office, to determine that the applicant's resources were within the limits prescribed by the law. The State would also define the extent of services to be paid for under such a law, and could choose two or more services from the following list (so long as one is institutional the other is a noninstitutional type of care) or include them all: inpatient hospital services; hospital and clinic services to outpatients: nursing home, private nursing, and home health-care services; physicians and dentists services; physical therapy and related services; prescribed drugs, eyeglasses, dentures, and prosthetic devices; diagnostic screening; preventive services; and other medical and remedial care recognized under State law.

As of January 1961, only five States (Massachusetts, Michigan, Oklahoma, Washington, and West Virginia) had any payments under this new program. This fact highlights one of the major problems in adopting the Kerr-Mills program in full: the tremendous increase in State general revenue funds which would be required to put the full program into effect. For example, in January 1961 Missouri spent a total of $140,960 for hospital care in behalf of its old-age assistance recipients. In contrast, Illinois, with a full-scale program covering all medical services, spent $2,441,744 in the same month in behalf of its old-age assistance recipients. Applying the Illinois average amount spent per recipient ($34.19) to the Missouri old-age assistance caseload would result in an annual program cost of $46,361,000 of which about $35 million would have to be State funds. This is a very rough comparison with the 1959-61 Missouri appropriation from State funds which was for a little more than $1 million per year. Assuming that there might be as many medically indigent needing medical care among the aged population not on old-age assistance, the above figure would. of course, be greatly increased, requiring perhaps as much as $50 or $60 million per year from State funds in order to give full effect to both parts of the KerrMills bill.

My personal conviction is in full agreement with the statement made by the Income Maintenance Section of the White House Conference on Aging, which said: "The States are urged to take full advantage of this (Kerr-Mills) legislation." However, I can certainly not agree with those who say that the KerrMills bill will do the whole job, and that other measures are unnecessary. My support of the bill stems from the fact that it is needed to bridge the gap during a transition period, until such time as all retired aged persons would be covered by social security, and would also be entitled to medical services in addition to this monthly benefit check. Kerr-Mills is an excellent beginning step toward that end. Instituting the program along with the social security program, we could expect the same eventual decrease in cases and costs for the Kerr-Mills part of the total program, similar to the continued decrease in the number of oldage assistance cases mentioned at the beginning of this paper.

2. Financing medical care for the aged through social security.-The official policy statement of the 1961 White House Conference on Aging includes this major recommendation: "The problem of furnishing an adequate level of high quality health care for the aged is so large and so complex that its solution will require the use of a variety of approaches, including individual and family resources, voluntary health insurance, industrial programs, social security, public assistance, and a variety of other programs. *** The majority of the delegates of section 2 (by a vote of 170 to 99) believe that the social security mechanism should be the basic means of financing health care for the aged."