And surveys bear this out. The Conference of Catholic Charities, in a study of three "lower middle" income parishes located in St. Louis, Cleveland, and Buffalo, presented this table to show the relative economic competence of those surveyed:

"

The report noted the studies reveal that "less than ten per cent regarded their financial situation as precarious. The report went on to say:

"When asked who would pay for hospitalization if it were necessary, between 80 to 90 per cent of all the aging in all studies said they had hospitalization insurance, savings or potential help from children and relatives. The Buffalo study, which had the only further analysis of this kind, found seven per cent who would turn to welfare organizations and five per cent who said they did not know what they would do."

I have gone into some detail on the subject of the financial resources of the aged because I believe it is pertinent to the Committee's deliberations to assess the relative need of the group for which legislation has been proposed.

The foregoing proves, I think, my earlier point: the aged cannot be considered to be a homogeneous group from the standpoint of financial need. Some are indigent or barely self-sustaining. They are being helped. But they are a minority, not a majority, of the nation's aged.

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FALSE PREMISE NUMBER FOUR THE PROBLEM OF THE AGED IN FINANCING
THEIR HEALTH COSTS WILL GET WORSE BEFORE IT GETS BETTER.
A PERMANENT PROGRAM IS ESSENTIAL TO ITS SOLUTION

Those who favor a national compulsory health plan for the aged not only argue that most of this group are unable to pay the costs of

their own health care, but they carry this fallacy one step further. They claim that whatever financial capabilities the aged may have to finance health costs are diminishing day by day and that this segment of our population is rapidly approaching a time of crisis. Thus, if something is not done right away the elderly will lose whatever precarious ability they may presently have to pay for health services.

Thus runs the argument. Here again, it is an emotional approach designed for maximum appeal to decent instincts, but serving to play down the inconveniently obtruding facts which contradict its thesis. The strategy is aimed, apparently, at the creation of a synthetic atmosphere charged with crisis in which Congress can be pressured into hasty, ill-conceived action.

Just what are the facts?

(1) Retirement plans, supported by private industries, are rapidly increasing the degree to which they help support the over 65 population. At present, total annual income to the elderly from this source is roughly $1 billion, according to the estimate of the planning committee for the White House Conference on Aging.

However, private pension plans have only been established in fairly recent years. As a consequence, many of the currently retired were either not included in such plans, or their period of contribution was too short to return them sizable benefits.

But this picture is changing rapidly. The Securities and Exchange Commission estimated total investments in pension plans of all types, public and private, at $74.2 billion at the end of 1956. of this total, $28.9 billion was in private funds. Thus it is clear that within the next couple of decades a much higher percentage of persons retiring at age 65 will have substantial income assistance from pension funds.

(2)

The planning committee for the White House Conference also estimated the total income of our over-65 population from all types of private investments at from $4.3 to $8.3 billion a year. This includes dividends, interest on savings, annuities, rents, royalties, and so forth. It does not include such non-income producing assets as homes occupied by the elderly, nor the value of businesses in which the over-65 group are still actively engaged. At a conservative estimate, therefore, older people appear to own between $75 and $150 billion worth of income producing assets.

There is every reason to believe that the numbers of older people with private investments will expand markedly within the years ahead. To support this assertion, home ownership has increased rapidly; bank savings have gone up; and the number of individual investors in corporate securities and income producing bonds has risen sharply.

We

have had twenty years or so of nearly uninterrupted prosperity, with almost full employment and constantly rising incomes; and these factors are reflected in the steadily increasing worth of private investments.

(3) In the years ahead, more and more people reaching retirement age will be covered by OASDI. More than 90 per cent of those now working are eligible for retirement benefits under Title II of the Social Security Act, as compared with fewer than seven per cent in 1940; 26 per cent in 1950; and 68.9 per cent in 1960. By the same token, the percentage of older people on Old Age Assistance has been decreasing steadily over the years--from 22.8 per cent in 1940; to 22.5 per cent in 1950; to 14.1 per cent in 1960.

(4) According to the Health Insurance Institute, nearly 132 million Americans, or 73 per cent of the civilian population had some form of health insurance through voluntary insurance organizations at the end of 1960.

The Institute estimates that half the aged had some form of health insurance in 1960 and that, by 1970, nine out of ten persons reaching age 65 who desire coverage will have it on a voluntary basis.

The Health Insurance Institute reports that seven out of every ten workers covered under group health insurance policies issued during 1960 have the right to retain their protection when they retire. The greater availability of coverages that continue into retirement is shown by contrasting the 1960 data with findings at the end of 1959.

In 1959 only 55 per cent--or about five out of every ten workers--had the right either to continue or convert their coverage

upon retirement.

Having carried health insurance during their working lives, Americans have learned to value its protection and to continue that protection after retirement.

The phenomenal growth of health insurance will be discussed in detail later in my testimony, Mr. Chairman. It is enough to say here that some 290 voluntary health-insuring organizations are now issuing hospital or surgical policies to the elderly; and in rapidly expanding variety, policies are now available to everyone. Further, aware of the great potential of this 65-and-over market, aggressive companies are lowering premiums to levels which are within the reach of persons with low or modest incomes.

To sum up, then: by whatever yardstick we choose to measure the present needs of the elderly, we come up with the same answers. Some are in financial difficulties, most are not; some are in very poor health, the vast majority are not.

Finally, in the years ahead the problem--to the extent that a problem presently exists--will decrease in magnitude. Scientific advances in medicine will enable us to safeguard the health of the elderly with increasing efficiency. The financial status of the aged-now relatively favorable for the majority--will continue to improve.

No permanent, irreversible Federal governmental program, of the sort proposed in H.R. 4222, is therefore needed to solve a temporary problem affecting a minority of the aged. And H.R. 4222, if enacted into law, would be both permanent and irreversible: not only because this is the nature of such programs, but because its very passage would destroy the resources now available for doing the job.

With voluntary effort discouraged at the community level,

with the growth of privately purchased health insurance inhibited or halted, with the Kerr-Mills Law thrown into the discard without a fair trial, the nation would unfortunately be left--by default--with H.R. 4222. We are convinced, Mr. Chairman, that it would provide a dangerous, costly, and thoroughly inadequate substitute.

FALSE PREMISE NUMBER FIVE

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VOLUNTARY HEALTH INSURANCE AND
PREPAYMENT PLANS, PRIVATE EFFORT, AND EXISTING
LAW WILL NOT DO THE JOB THAT NEEDS DOING

Mr. Chairman, later in this testimony I should like to discuss, in some detail, the mechanisms on which we now depend to enable the aged to obtain the health care they require. These mechanisms are three in number:

(1) Voluntary Health Insurance and Prepayment Plans, which
have made phenomenal advances, now cover 132 million
people and protect half the elderly.

(2)

The Private Efforts of Individual Citizens, working together at the community level, contribute tremendously

to the solution of the overall problems affecting America's older people.

(3) The Kerr-Mills Law, enacted only last year, is being implemented by the individual states with unusual speed; and it provides help to those of the aged who need it.

Together, these mechanisms can do the job that needs to be done.

I believe the record, as we shall recite it, will establish the validity of this conviction, and refute any claim made by the supporters of H.R. 4222 to the contrary.

SECTION IV

PHILOSOPHICAL ARGUMENTS AGAINST THE BILL

In the process of establishing the false premises on which H.R. 4222 is based we have also discussed the converse of those premises. Let me review now the facts which have emerged from the foregoing discussion; for the decision of Congress to legislate or refuse to legislate must ultimately be based upon the need to legislate.

It is our conviction that the need to legislate does not exist; that our present methods of helping the aged finance their health care are adequate; that the problems of the elderly have been misstated or exaggerated.

(1) There is a very real problem in our society in terms of the increasing millions of the aged and their relationship to the entire American population. The problem is complex in nature and sociological in character. It involves segregation of the aged from the mainstream of living; arbitrary retirement on a chronological basis; a waste--for which all of society is responsible--of human talents, energies, assets, lives. We have increased life expectancy for millions while failing to adjust to the phenomenon economically, socially or culturally. This is the total problem. It is not susceptible to legislative solution.

(2) Most of the aged are in reasonably good health. The

minority are not.

(3) As a group, the aged are in a relatively favorable financial position. Some of the aged are indigent. Most are not. Most of them, in fact, are self-sufficient financially and therefore capable of paying the costs of their own health care.

(4) In the years ahead, the financial resources of the aged will increase--not decrease. Thus the problem--to the extent that it exists--is working itself out.

(5) Our present mechanisms for financing health care costs meet what need exists. The Kerr-Mills Law helps those who need help. Welfare programs take care of the indigent. Privately purchased health insurance and other prepaid benefits, savings, liquid assets, pensions, Social Security benefits, annuities--these constitute the resources of the vast majority of older people faced with hospital or medical bills. And with these resources, the vast majority are self-sustaining.

Our objections to this bill are manifold. We disagree with its basic philosophy. We oppose its method. We are deeply concerned with its effects upon the nation's standards of health care. We object to it on practical grounds and for specific reasons.