Tables 3 and 4 attempt to display the potential net effect of AHIP. Table 3 assumes that State and local governments realize 50% of the savings shown in Table 2. In most States, we would anticipate actual savings of at least 50%. Table 4 assumes that State and local governments achieve the full potential savings.

Tables 3 and 4 also show the per capita burden or savings within each Statei.e., the net fiscal effect divided by the State population-and the percent change relative to total current State expenditures for Medicaid, General Assistance, and direct hospital services. The per capita change is intended as a proxy for fiscal relief or burden. The per capita changes in Table 4 range between an increase in expenditures of $7.38 (Alaska) and a savings of $46.66 (District of Columbia). The percentage changes range between a 59% increase in West Virginia to a 66% savings in Maryland.

TABLE 1.-ESTIMATED STATE EXPENDITURES UNDER AHIP, EXCLUDING SAVINGS FROM
DIRECT HOSPITAL SERVICES, FISCAL YEAR 1975

TABLE 2.-EXPENDITURES FOR STATE AND LOCAL HOSPITAL SERVICES REIMBURSABLE UNDER CHIP, FISCAL

Fiscal

burden from

TABLE 3.-ESTIMATED STATE EXPENDITURES UNDER AHIP-FISCAL YEAR 1975
[Assumes savings of 50 percent in direct expenditures for State/local hospitals]

Assumed savings for

table 1,

direct hospital

col. 7

expenditures

(millions)

TABLE 3.-ESTIMATED STATE EXPENDITURES UNDER AHIP-FISCAL YEAR 1975-Continued

TABLE 4.-ESTIMATED STATE EXPENDITURES UNDER AHIP-FISCAL YEAR 1975

TABLE 4.-ESTIMATED STATE EXPENDITURES UNDER AHIP FISCAL YEAR 1975-Continued
[Assumes savings from direct expenditures for State/local hospitals]

Appendix 2

ITEM 1. STATEMENT BY THE AFL-CIO EXECUTIVE COUNCIL ON THE ADMINISTRATION HEALTH PROGRAM

BAL HARBOUR, FLA., February 19, 1974.

President Nixon's so-called national health insurance proposal would do little to solve this Nation's health care crisis.

He has designed a system to protect the financial well-being of doctors and insurance companies, not to meet the health needs of the American people. By ignoring the compelling need to reform the health care delivery system, President Nixon's proposal would be the threshhold for a further outrageous escalation of medical costs.

We believe the Nation must develop a national health insurance program based on the principle that quality health care is a right of all Americans.

That is why the AFL-CIO is supporting National Health Security-the Griffiths-Kennedy bill. It is the health consumers' program.

The Griffiths-Kennedy bill would help transform the present outmoded health care delivery system from one dedicated to the financial interests of doctors, hospitals and insurance companies to one dedicated to meeting the health needs of the American people.

The administration bill would perpetuate the present system. Wherever the Nixon administration was faced with a choice between the needs of the people and the selfish interests of the doctors and insurance companies, it came down on the side of the doctors and insurance companies.

Accompanying this statement is a detailed analysis of the administration bill. Briefly, we find these glaring differences between the Health Security program, which we support, and the Nixon program, which we oppose:

(1) Health Security would provide quality health care to all Americans as a right; the administration bill would not. Despite its claims, the Nixon program would leave many Americans unprotected against the high cost of medical care. The poor and near-poor, under the Assisted Health Insurance Plan, would have no guarantee of treatment by a physician. Additionally, the administration program would require costly and demeaning means tests.

(2) Health Security would provide strong quality and cost controls throughout, but the administration bill would not. Its quality controls are almost nonexistent. The administration relies on high deductibles and coinsurance paid by patients to control cost, despite evidence that financial barriers to health care only delay effective treatment of illness and, thus, ultimately increase costs.

(3) Health Security would provide full benefits to all Americans, including all necessary hospital and physician services with the exception of certain costs for mental health care. According to the administration's own estimates, at least three out of every four persons would receive no benefits under the Nixon program in any given year. These people would have to pay for all of their medical care out of their own pockets.

(4) Health Security provides for effective consumer representation at all levels to protect the patients' interests: the Nixon bill would provide none. The only role for consumers that we can find in the Nixon bill is to pay sizable premiums and high deductibles and coinsurance.

(5) Health Security would provide a single, comprehensive standard of benefits covering all Americans; the administration bill would not. It has proposed different plans for the employed, the poor and the elderly, with varying premiums, deductibles and coinsurance. This can only further fragment the health care system.

(6) Health Security would be financed by the proven and accepted method of Social Security taxes, matched by general revenue funds. with proper and