blanket policies should be included in part I unless reported in part II. Kindly indicate by footnote the part in which you have included your franchise and blanket coverages. Coverage under mass enrollment plans and conversions from group policies should also be shown in part I. 3. The following instructions apply with respect to benefit classifications: (a) Hospital expense.-Include all coverage which provides or pays hospital benefits for confinement due to both sickness and accident. (b) Surgical expense.-Include all coverage for surgical charges incurred due to both sickness and accident. (c) Regular medical expense.-Include coverage (except major medical expense) for any type of nonsurgical medical expense where the benefit is payable in event of both accident and illness without limitation as to the type of sickness or accident (i.e., exclude accident only, polio, etc.). This category is intended to include medical expense coverages that cover physicians' hospital calls only as well as those that cover hospital, home and office visits. Distribute this total in line 3, however, as between categories shown in lines (a) and (b). (d) Major medical expense, supplementary.-Include only the major medical expense or catastrophic coverage policies which may be superimposed on basic hospital, surgical, and/or medical coverages (whether the latter are written by your company or not) and which provide payments to cover essentially all types of expense, whether hospital, surgical or medical, and which are characterized by a high overall maximum on the amount payable and a deductible amount which is not covered. Policies with high maximum amounts and deductible provisions which cover only hospital expense should not be included under major medical expense, but rather under hospital expense. Do not include policies which cover only accidents or specified diseases (polio, etc.). (e) Major medical expense, comprehensive (no basic plans).—Include those major medical expense policies which meet the definition under (d) but are written on cases where no basic hospital, surgical, or medical coverages exist. In most instances, policies in this category are written with deductible amounts of $250 or less. 4. Include only policies written on a direct basis. Reinsurance assumed from other companies should be excluded, while reinsurance ceded to other companies should not be deducted. Do not include participation in State 65 association plans. Such data will be obtained direct from the association. 5. In the event that individuals are covered for hospital-surgical-medical expenses by rider to a loss of income policy, such persons should be included for purposes of this questionnaire. 6. Please note that persons with a policy providing hospital, surgical, and regular medical expense benefits should be entered in each of the appropriate lines of part I. PART I Number of people 65 years of age and older covered under individual and family health insurance policies, as of Dec. 31, 1962 Type of coverage 1. Hospital expenses, total__ 2. Surgical expenses, total_ 3. Regular medical expenses, total.. (a) In hospital only. (b) Home, office, and hospital__ 4. Major medical expenses, supplementary. 5. Major medical expenses, comprehensive.. INSTRUCTIONS FOR PART II. GROUP POLICIES Total 1. Information reported is to be based on actual analysis of group policies in force in the United States on December 31, 1962, and which provide hospital, surgical, medical, or major medical expense coverage. An actual analysis should be made and reported for all policies covering 500 or more employees. For smaller groups, analyze and report on all policies or use a sample by taking from either a numerical or alphabetical file (a) at least every 10th policy covering between 50 and 499 employees, and (b) at least every 20th policy (with a minimum sample of 100 policies) covering less than 50 employees. When a sample is used, the results entered in the tables should be the totals for your entire business as estimated from the sample. Other appropriate estimating procedures, where necessary, will be acceptable. Exclude special-risk blanket coverages (e.g., polio, limited accident, volunteer firemen, schoolchildren). Other franchise and blanket coverages should be excluded if reported in part I. 2. Include only coverages written on a direct basis-reinsurance accepted from other organizations should be excluded, while reinsurance ceded to other organizations should be included. For coverages jointly underwritten by your organization and one or more other organizations on a coinsurance basis, the figures included should be a fractional part of the individuals so underwritten, the fraction used being the proportion of the total coverage under such cases which is underwritten by your organization. Do not include participation in State 65 Association plans. Such data will be obtained direct from the association. 3. The following instructions apply with respect to benefit classifications: (a) Hospital expense.-Include all coverage which provides or pays hospital benefits for confinement due to both sickness and accident. Do not include, however, the extra hospitalization coverage provided in addition to weekly indemnity in policies issued under the California UCD law, if the benefit is only the minimum required by law ($12 for 20 days). (b) Surgical expense.-Include all coverage for surgical charges incurred due to both sickness and accident. (c) Regular medical expense. Include coverage (except major medical expense) for any type of nonsurgical medical expense where the benefit is payable in event of both accident and illness without limitation as to the type of sickness or accident (i.e., exclude accident only, polio, etc.). This category is intended to include medical expense coverages that cover physicians' hospital calls only as well as those that cover hospital, home, and office visits. (d) Major medical expense (supplementary to basic plans).—Include only the major medical expense or catastrophic coverage policies which are superimposed on basic hospital, surgical and/or medical coverages (whether the latter are written by your company or not) and which provide payments to cover essentially all types of expense, whether hospital, surgical, or medical, and which are characterized by a high overall maximum on the amount payable and a deductible amount which is not covered. Policies with high maximum amounts and deductible provisions which cover only hospital expense should not be included under major medical expense, but rather under hospital expense. Do not include policies which cover only accidents or specified diseases (polio, etc.). (e) Major medical expense, comprehensive (no basic plans).—Include those major medical expense policies which meet the definition under (d) but are written on cases where no basic hospital, surgical, or medical coverages exist. In most instances, policies in this category are written with deductible amounts of $250 or less. 4. The following instructions apply with respect to the basis for reporting individuals: Include under each benefit classification the total number of individuals for whom such coverage is provided. Individuals with several kinds of coverage should be counted under each of the appropriate classifications. 5. It is recognized that some of the data for tables 1 and 2 may, in some instances, have to be obtained from your policyholders. The importance of this survey is such as to warrant such a procedure wherever possible. If such proves not to be practicable, qualified estimates will be acceptable. PART II TABLE 1.-Number of actively employed individuals and dependents 65 years of age and older insured under group health insurance policies, as of Dec. 31, 1962 Type of coverage 1. Hospital expenses, total. 2. Surgical expenses, total.. 3. Regular medical expenses, total. (a) In-hospital only. (b) Home, office, and hospital__ 4. Major medical expenses, supplementary. 5. Major medical expenses, comprehensive.. Total TABLE 2.-Number of retirees and retirees' dependents 65 years of age and older insured under group health insurance policies, as of Dec. 31, 1962 Type of coverage 1. Hospital expenses, total_ 2. Surgical expenses, total_. 3. Regular medical expenses, total_ (a) In-hospital only.. (b) Home, office, and hospital.. 4. Major medical expenses, supplementary. 5. Major medical expenses, comprehensive.. Total 3. THE EXTENT OF INSURANCE COMPANY COVERAGE FOR THE MEDICAL ExPENSES OF THE SENIOR CITIZEN AS OF JULY 1961 A Survey of Member Companies of the Health Insurance Association of America (1) As of July 1961, there were at least 220 member companies of the Health Insurance Association of America which offered health insurance coverage against the costs of medical care to the senior citizen (persons age 65 and older). This survey was conducted to determine the extent and quality of these coverages written by these companies. Of the 220 companies, 90 responded to the survey. The remainder were unable to provide data of the type requested. (2) The 90 companies reported a total in-force of 3.6 million persons 65 years of age or older with some form of medical expense insurance in mid-1961. Since the health insurance premium volume of these companies is about two-thirds of the total health insurance premium volume in the United States, it is estimated that, among all insurance companies in the United States, there were about 4% million senior citizens covered as of mid-1961. (3) A previous survey by the association indicated about 2.3 million aged with insurance company coverage at the end of 1958. Thus, in the last two and a half years, the number of aged persons covered by insurance companies is estimated to have more than doubled. (4) Of the aged covered, 47 percent were insured under group policies and 53 percent under individual and family policies. (5) Of the senior citizens with hospital expense coverage, 88 percent also had surgical expense insurance and 30 percent had coverage for regular medical expenses. Almost three-fourths of a million, 730,000 aged persons, were covered by major medical expenses insurance policies as of July 1961. Major medical policies provide coverage for all usual, customary, and necessary medical expenses in and out of the hospital including surgery, physicians services, prescribed drugs, nursing care, and appliances, subject to stated deductible, coinsurance, and maximum amounts. (6) Of the aged with hospital expense insurance almost one-third had policies with daily hospital room and board benefits of $15 a day or more. About a fifth (18 percent) had benefits of from $11 to $14 per day and the remainder (53 percent) were covered for $10 a day or less. (7) The nationwide average daily room and board charge in hospitals in 1960 was $17. Based on this average, almost one-third of the insureds would have the room and board portion of their hospital bill met in full or practically in full; 18 percent would have between 65 percent to 82 percent of the bill covered; and 53 percent would be covered for about half the room and board charge. (8) Twenty-seven percent of the aged with hospital expense coverage had ancillary hospital expense benefits of $500 or more and an additional 21 percent had benefits of between $200 and $499. The remaining 52 percent were covered for ancillary hospital expenses up to $200. This coverage provides benefits for such hospital expenses as the operating room, anesthesia, and drugs. (9) According to data developed by the Society of Actuaries, a $200 ancillary hospital expense benefit will provide full reimbursement of all hospital ancillary expenses in at least 80 percent of all confinements. (10) More than two-fifths of the insured aged had hospital expense benefits of over 70 days per year. About a quarter had coverage for from 32 to 70 days per year. The remaining third had policies providing for 31 days, and in a few instances, for less than 31 days per year. (11) According to U.S. National Health Survey data, two-fifths of the aged are discharged from hospital after a week or less; 70 percent after 2 weeks or less; and 91 percent after 30 days or less. Less than 10 percent of the aged spend 31 days or more in hospital. Based on these averages, all but a small proportion of the insureds would have sufficient benefit days to provide coverage for their entire hospital stay. (12) More than half of the aged with surgical expense insurance (53 percent) have maximum surgical benefits of over $200. The remainder have such benefits for $200 or less (most usually $200). (13) About a third of the aged with regular medical expense insurance have coverage for physicians visits in home, office, and hospital. The remaining twothirds have coverage for nonsurgical physicians visits while hospitalized. (14) As of mid-1961, several insurance companies were making available coverages which specifically include the cost of skilled nursing home care. Although the survey did not obtain data with respect to the total number of aged covered for such care, it is known that the predominant coverage is $7.50 a day for 31 days and $5 a day for the next 90 days in nursing homes. (15) Four-fifths of the 730,000 aged persons with major medical insurance are covered by group policies. The remainder have individual and family coverage. Of those insured under group policies, 70 percent have the supplementary and 30 percent the comprehensive type of major medical coverage. These policies are written with maximum amounts up to $15,000, subject to deductibles and coinsurance. (16) More than four-fifths of the aged covered under individual and family policies for hospital and surgical expenses have policies which are either guaranteed renewable or under which the company has voluntarily relinquished its right to nonrenew the policy because of any change in the physical condition of the insured. (17) Upon retirement, more than one out of every two aged currently employed and insured under a group insurance policy have the right either to convert to an individual policy or to continue their coverage as a member of the group. (18) Since July 1961, there have been such developments as the Connecticut 65 plan, the Federal Government retiree plan, and others, which portend a further extension of the coverages held and available to the aged. II. BACKGROUND AND PURPOSE In December 1957, the board of directors of the Health Insurance Association of America appointed a special committee on continuance of coverage. In October 1958, that committee recommended a special meeting of the association to be held in New York City in December 1958. At that meeting, the following recommendations of the committee were adopted by the member companies of the Health Insurance Association of America: 1. Insurers offering individual and family coverage of the cost of health care under contracts which are renewable at the option of the insurer should continue to accelerate their progress in minimizing the refusal of renewal solely because of deterioration of health after issuance. 2. Every insurer offering health care coverages should, among the types of insurance contracts it offers, promptly make available to insurable adults policies which are guaranteed renewable for life. 3. Every insurer should develop sales programs designed to encourage the sale of permanent health care insurance where the need for this type of coverage exists. 4. Every insurer offering individual and family hospital, surgical, and medical care coverages should promptly take steps if it is not presently doing so to offer insurance coverage of persons now over age 65. 5. It is essential that adequate voluntary health insurance be available to broad classes of physically impaired people. Initial insurance underwiting standards essential to fulfilling the first two of these recommendations increase the need for insurance for the physically impaired. Otherwise, in the future, these people may be deprived of insurance coverage. It is recommended that each company carefully consider how to contribute to the achievement of this objective. 6. Every insurer writing coverage on a group basis should develop and aggressively promote soundly financed coverages that will continue after retirement. 7. Every insurer offering coverage on a group basis should encourage the inclusion in the group contract of the right to convert to an individual contract on termination of employment. It is the purpose of this survey to determine the extent and quality of coverages against the costs of medical care presently covering senior citizens and to measure the accomplishments of member companies as respects such coverages since the adoption of the aforecited recommendations. Specifically, the survey develops data on the extent and quality of insurance company coverage for the medical care expenditures of persons 65 years of age or older with measurement taken as of July 1, 1961. Along with this current measurement, there is presented an indication of the recent trend with respect to such data. III. SCOPE AND METHODOLOGY OF STUDY The survey was conducted by mail among the 282 member companies of the Health Insurance Association of America by means of a questionnaire (see appendix B). Survey forms were distributed in June with responses requested by the end of September 1961. Of the 282 members, at least 220 made medical expense coverage available to persons 65 years of age and older. As of the date of this analysis (December 1961), 152 member companies had responded. Among the 152 respondents, 43 were necessarily excluded from participation in the survey for one of the following reasons: the company did not write medical expense insurance for persons 65 or over (32 companies); the company wrote reinsurance only (4 companies); or the company did not write insurance in the United States (7 companies). There were, therefore, 109 member companies which reported writing medical expense insurance for the senior citizen on a direct basis in the United States. Of these 109, however, 19 could not supply data in sufficient detail to be usable for purposes of the study. The results of the study are based, therefore, upon statistics provided by 90 member companies of the Health Insurance Association of America. Since certain of these companies write group insurance only, or individual insurance only, the total respondents for various sections of the survey (see questionnaire in appendix B) differ. The adequacy of the response rate for the several sections may be adjudged from the data presented below. It will be noted that respondents to the survey write approximately two-thirds of the health insurance premiums in the United States. The sample, is therefore, deemed to be statistically valid and representative of the total U.S. business. IV. ANALYSIS OF RESULTS, JULY 1961 (A) Extent and type of coverage As of July 1, 1961, the 90 respondents to the survey reported 3.6 million persons 65 years of age or older with some form of medical expense insurance coverage. Since the health insurance premium volume of these companies is approximately two-thirds of the total health insurance premium volume in the United States, the complete extent of medical expense coverage by insurance companies, among |