medical, hospital, nursing home, and home health service charges is necessary to meet these costs. Such an assumption is the basis of any OASDI-oriented program. The American people may accept Social Security in the form of a retirement cash income program, vaguely related to their tax contribution to the program, but they are unlikely to accept a federally-subsidized medical service program, bearing no relation between benefits and the amount the individual has contributed, unless they are convinced it serves a special need which cannot be met through any other mechanism.

Yet the program proposed by H.R. 4222, which assumes that all the aged need help to meet their medical expenses, would cover only those eligible for OASDI benefits; in other words, those who have been employed in "covered" occupations for a sufficient length of time to build up an insured status. In Old Age Assistance programs, the state is required to take into consideration the applicant's income and resources--although the major part of the Old Age Assistance load consists of those not eligible for OASDI benefits, those who, throughout their lives, have generally had less opportunity to save for their own old age.

Those over 65 on OASDI are automatically labelled "medically indigent" on the basis of their age alone; those over 65 not on OASDI must present evidence, depending on the individual state's requirements, of their need for help.

The controversy comes down to this: those supporting H.R. 4222 agree that there should be a means test to determine an individual's eligibility for tax-supported aid in meeting his medical bills-only they believe that the test should be based on age and OASDI insured status. We believe it should be based on the individual's resources and needs. In our opinion, the latter formula is far closer to American ideals of independence, self-sufficiency, and personal responsibility.

The so-called "degradation" of the means test is not inherent in the test itself, but in its administration, which is, in turn, dependent on local public feeling concerning the program. There has, for instance, been little outcry that the means test required for nonservice-connected care in Veterans Administration hospitals is "degrading", or that reducing or withholding payments under OASDI to beneficiaries who earn more than a specified amount each year creates a "stigma." Indeed, investigation of resources is commonplace in today's installment-payment culture.

If MAA is designed and administered, as the medical profession has recommended, as a support to the ordinarily self-sufficient person, to help preserve his independence, and if it is permitted to exist without constant attack as an attempt to "pauperize" the elderly and without constant allegations that this method of providing community

assistance is "demeaning," we believe that the program can successfully operate without lowering the individual's self-respect.

On the other hand, we believe that it is equally possible for a program to become demeaning and degrading in which every OASDI beneficiary is considered medically indigent; in which he becomes a ward of the Federal government for medical, hospital, nursing home, and home care and subject to Federal regulation as to which hospitals and homes will admit him; in which admission will be subject to scrutiny by utilization committees organized in accordance with Federal directives; and in which everyone over 65 is considered incapable of providing for his own needs.

In fact, we believe such a program to be even more demeaning because it is based on the assumption that the aged, as a group, cannot pay their own way, instead of on the more honorable belief that even the most provident person may, at times, be faced with health expenses beyond his ability to finance.

Flexibility vs. Conformity

Besides its merits in maintaining individual responsibility for personal health services, we believe that the MAA program has a further advantage in the great flexibility of action it allows, and which is inherently impossible in a Federal direct service plan such as proposed by H.R. 4222.

The pressure for some special medical care financing plan for the aged is, in terms of legislative history, a comparatively recent thing--the result of a complex of forces, including the increased proportion of the voting population over 65, the increasing difficulty of older people in obtaining employment, and major advances in the science of medicine. As a result, we do not believe that there is truly enough evidence for Congress to say, "Here--in a 90-day hospital program, plus limited nursing home care, plus home health services and help in paying for some medical and outpatient diagnostic care--lies relief from worry for the older citizen."

Yet it should be obvious that, if this bill is passed, a staggering and probably fatal blow may be dealt to any alternative approach. The economic pressure focused on these four facets of care for the aged will be so heavy that there will be little practical possibility of comparing its effectiveness with other methods. And past experience with Federal programs indicates that the tendency, when a program fails to meet the need for which it was established, is to expand it rather than to take a different direction.

The MAA program, on the other hand, allows each state to choose its own method of operation and its own scope of benefits. As for those covered, it may set its sights a little above the present

level for Old Age Assistance or it may include every resident over 65 meeting the states' definition of "medically indigent". Programs may be varied to suit the medical resources already available in the state, instead of promoting a forced growth of particular types of services not now generally available.

Thus, the Federal government participates in the cost of the program within each individual state, but otherwise exercises little control. The relationship here is precisely of the sort spelled out in the clear language of the Tenth Amendment. As the distinguished members of this Committee know, this Amendment states that "the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

There is another advantage to the MAA program:

Its future growth would be based on the actual experience, of not one but of fifty plans; not of one administrative mechanism but of many; not of one fixed and limited schedule of benefits but of many and varied schedules.

Agreed, some of our aged population have difficulty financing medical care and a larger number are apprehensive over possible future difficulties. The best solution must be based on accurate information as to the extent and areas of need as they vary from state to state, with assistance programs scaled to meet problems. This is infinitely wiser than setting up a fixed national program, into which all these individual problems are to be forced, whether they fit or not.

SUMMARY

The American Medical Association vigorously opposes H.R. 4222, 87th Congress, for the following reasons:

(1) It Would Lower the Quality of Medical Care. As the bill now stands, it would introduce into our system of freely practiced medicine the elements of compulsion, regulation and control. A free system of medical care places emphasis on quality, whereas government-controlled medicine necessarily places its emphasis on the control of spending. The two systems cannot be combined without government domination of physicians and the purveyors of health services, and damage to the quality of medical care. This measure would affect a patient's freedom of choice, not only

of doctor but of hospital and nursing home.

It would cover upwards of 50,000 physicians.

It would lead to over-use and over-crowding of hospital and nursing home facilities.

It places undue emphasis on institutionalizing older patients who should be kept out of institutions whenever possible for reasons of good medical practice.

The basis for all good medical care is the intimate relationship between the doctor and his patient. This relationship would be weakened by passage of H.R. 4222 through the exercise of the regulatory powers given the Secretary of Health, Education, and Welfare.

What is true of H.R. 4222 immediately, would be equally true as it expanded. In its present form this measure proposes a limited program of compulsory national health insurance for the aged only. But it would quickly expand until it provided complete health services and covered people of all ages under a system of socialized medicine.

Our free system of providing health care has brought the United States to a position of medical pre-eminence throughout the world. That position would be jeopardized from the moment this program took effect; and it would be irretrievably lost as the program expanded into a government-run, government-administered, government-controlled health plan for everyone.

In this process, as foreign experience demonstrates, the patient is the ultimate sufferer.

(2) H.R. 4222 Is Unnecessary. Studies indicate that most of the aged are in reasonably good financial circumstances. Similarly, most are

in relatively good health.

To the extent that it exists, the problem of the aged in financing the costs of their health care is decreasing as time goes on. Thus, a permanent compulsory federal program is not required for solution of the problem.

It must also be stressed that this is a sociological problem and that it requires adjustments by society if it is to be solved. There is no quick, easy legislative answer.

Three mechanisms exist through which the aged can finance the health care they require: (a) voluntary health insurance and prepayment plans which now cover 132 million people and protect half the elderly; (b) the private efforts of individual citizens working together at the commu– nity level who contribute tremendously to the solution of the over-all problems affecting America's older people; and (c) the Kerr-Mills Medical Aid for the Aged Law, enacted only last year, which provides help to those of the aged who need it.

(3) H.R. 4222 Would Be Unpredictably But Staggeringly Expensive. No adequate data are yet available on which to estimate cost, but the expansive aspects of the bill--plus the probable over-use of the benefits it would provide--will drive costs sharply upward from the beginning. It is usual for the cost estimates of such programs to be far below their actual cost in operation even when programs of this sort are based upon sounder data and fewer political pressures. This measure would prove no exception to the rule, and as greater numbers of retired older people become eligible for benefits, costs would continue to soar.

(4) This Bill Would Endanger the Entire Social Security System. It departs radically from the "floor of protection" principle upon which the Social Security Act was based and it would also provide a service, not a cash benefit. The precedent thus set would open the way for increased use of the Social Security mechanism to provide widely diversified benefits foreign to the system's experience, intent or philosophy. There is a limit to the amount of debt that can be passed on to younger generations; and there is a limit to the amount of subsidization that younger generations can assume for the elderly. The power to tax is the power to destroy; the power to tax for purposes of Social Security could, if overused, destroy the system itself.

(5) H.R. 4222 Would Undermine Private Health Insurance and Other Prepayment Mechanisms. The measure would substitute a compulsory system of governmental health care financing for a private voluntary system that has shown phenomenal growth and an ability to provide a financial cushion against medical expenses for the vast majority of Americans. Those compelled by law to carry the cost of a national compulsory health plan would be neither able nor anxious to carry private health policies as well. The American Medical Association is convinced that private health insurance and