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Appendix 3


[From the Washington Post, Mar. 13, 1974]

(By John Saar)

Imprisoned by poverty and hounded by inflation, two elderly sisters are closing out their lives in a Massachusetts Avenue apartment in a constant state of anxiety and depression. Mary Smith, aged 82, and her younger and sicker sister Elsie Sager, 79, survive, and not much more. Rising prices have stolen even the smallest of life's material pleasures from them.

The sisters' lives provide a frightening case study of life in inflationary times for many of this city's 103,000 people over 60 years of age.

Too old to work, with no close relatives, the sisters depend on a Social Security income of $296.30 and a pinchpenny budget that allows them $2 a day for food.

Penury has forced an almost total divorce from the outside world upon the sisters. Only the buzz of traffic and their own suppressed longings remind them, they say, of a normal life. They have one another and all the comfort an antiquated and flickering television can bring.

In the course of a long interview, the suspicion of tears misted Mrs. Smith's spectacles just once as she was saying, "Sometimes I see women in this building all dressed up for a swell lunch at Woody's or Garfinckels and I almost burst out crying."

They lack sheets for their beds, shoes for their feet. Rising prices lay constant siege to their diminished diet, making one sacrifice after another-fresh fruit, then milk, then meat...

Stoic by nature, Mrs. Smith says their situation is "laughable." But she does not laugh. In fact the once jolly person whose pleasant face bears imprinted smile lines rarely laughs these days.

For the two sisters, the closing out of their lives is proving a bleak ordeal replete with depression, indignity and suffering by deprivation.

Inflation continually threatens their precarious existence on an already inadequate fixed income. And inflation, in a remorseless progression, has canceled the few pleasures from their lives. Mrs. Smith, for instance, “an avid reader" used to devour the morning paper cover to cover. She had to cancel it a while back.

The women worked a combined total of 39 years to earn their right to the monthly social security checks-Mrs. Sager as a beautician in Richmond, Mrs. Smith as timekeeper in a now defunct Washington laundry. They are single. Mrs. Smith was divorced in 1925 and her sister has been a widow for 44 years. "Every night." says Mrs. Smith, "I thank God for what we have, but it's mighty little." Her dress was a gift from the manager of the building. The print flowers have been laundered to a pallor, so that the dress matches her indoor complexion-notepaper-white. Her shoes are a work of artistry-15 years old, the many slits and holes carefully welded shut with glue.

"In the past year or so," she says in her usual firm and unself-pitying manner, "it looks like I'm really getting crushed. I shouldn't and I'm trying to get out of it."

But her sister Elsie is depressed most of the time-"what we've been through is enough to tear the heart out of anyone," Mrs. Smith explains.

Asked to comment on how the sisters' situation could be equated with that of thousands of other elderly people in the city, social workers with various (984)

voluntary agencies and a spokesman for the District government's services to the aged office agreed it was typical. "These people are almost among the affluent aging," said George Robey, acting chief of the social services division.

In 1973 food prices soared by 25 per cent, placing a specially heavy burden on the fixed income poor like the two sisters. In January this year, grocery prices in the Washington area went up another 3 per cent.

"Inflation has had a tremendous impact on the elderly here," said Geraldine Brittain, a social worker with the private Family and Child Service who has helped the sisters. "There are relatively few social workers and it's a big population of elderly. We just touch the tip of the poverty iceberg. I think there's lots of real suffering."

Defenders of the Social Security system are quick to point out the payments are intended to supplement, savings, pension or other retirement income. The two sisters were left with no savings when they retired due to ill-health in their early 60s-Mrs. Sager because from the small profits of her beauty shop she had to look after her mother and two nephews and Mrs. Smith because her $60-a-week salary permitted no savings.

Although the sisters are receiving their full entitlement, they are skeptical and disappointed: "All those years," says Mrs. Sager, "they kept telling me my social security was building up, building up, and then when I got where I couldn't work but half a day that's what they based it on."

The grim reality of the sisters' cheerless life is worsened by the contrast with their falsely optimistic anticipation of how "the golden years" would be. The absence of forethought to retirement is cited by experts as one of the contributory causes to distress in the aged. Arguing for more community concern in treatment of the vulnerable and powerless aged, they like to gently threaten that as a multitude advancing to through life. We should pay heed when distress falls on those in front.

Mrs. Sager, a stocky invalid figure in a white nightrobe had seen her retirement as a chance to go to the zoo, the Smithsonian, the Washington scenes she never got around to seeing while working. Now even those limited ambitions are beyond reach: "I was going to have myself a ball," she says in a voice huskily wistful with the memory.

"I thought when I got to be in my old age," remembers Mrs. Smith, "I'd have enough to eat, a place to sleep, plenty of time to read and nothing to worry about. And having a lunch out or something like that once in a while."

Her life now is, she says, "certainly nothing like that. We can't afford to buy a bus fare and if we got downtown we could not afford lunch. You couldn't do it for less than $1.50 or $2—we can manage for a day on that-it's out of the question for us."

In a splitting of financial responsibilities common among elderly roommates, Mrs. Sager uses her check to pay the $140-a-month rent on their two-room apartment and Mrs. Smith cashes hers to buy food and other essentials. Anxiety over making ends meet is a constant for them, incalculable to the outsider: "Afl the time you're figuring out 'can I buy this, or buy that' and you're scared to death something will happen and you won't have the money," says Mrs. Smith.

The telephone, for instance, is an oft-discussed but finally indispensable necessity that costs a precious $10.50 a month. The sisters seldom leave the dingywalled apartment-"if they whitewash it the rent goes up"-except for their once-monthly shopping trip.

The telephone is a link to the outside world, with richer friends who call from Florida, New York or California-and for two old women with fragile health, a protection. Several weeks ago Mary picked up the red handset and called a doctor when her sister had a 3 a.m. heart attack.

The episode put Mrs. Sager into George Washington Hospital for two weeks under the Medicaid program and emptied the sisters' slender cash reserve. Mrs. Sager was too sick to ride buses. Hiring a friendly car-owner to transport her cost $5 each way and then Mrs. Smith had to come up with $3 a day to visit her. They dug into their loose change and used the last nickel before the hospitalization was over.

Lunch would be a can of beans Mrs. Smith said. How long since they last ate any meat?

Mrs. Sager: "Four weeks."

Mrs. Smith: "No. it was about six weeks ago we had some hamburger. So far as buying lamb chops or a roast of beef, we never do it."

Their diet now consists of eggs, oatmeal, hominy grits, fruit juices, crackers and vegetables. They see no way of economizing further.

Outright hunger is not a problem said Mrs. Smith: "If I get hungry I go and eat a couple of crackers." Until a third sister died four years ago, Mrs. Smith and Mrs. Sager lived in relative prosperity and ate heartily because rent and overheads were shared three ways. "We used to eat a full-course meal then but we've been cutting down, cutting down, so now we're small eaters."

Asked if she was constantly aware of rising prices Mrs. Smith gave an outraged "Oh!" and snapped her head away. The prices have hounded them relentlessly, she said. When fresh milk went out of their price range they replaced it with condensed milk. A can of condensed milk that used to cost 18 cents, now costs 35, she said. "It seems to be getting worse all the time. Every time you buy something, it's so much more than it was before."

The two sisters are white. The significance of that is that in a city with an over-all population 71 percent black, whites are in a disproportionate majority among the elderly. Of 72,000 people over 65 in the District, 57 percent are white. The imbalance is attributed to the reluctance that settled whites of advanced age felt about joining the general white migration from the city in the 1950s and 1960s. Another critical factor is the shorter life expectancy of blacks usually believed to result from poorer health care in youth.

Nationally, life expectancy for a white female is 74 against 68 for a black female. In males the difference is even more striking with whites averaging 67.9 years and blacks 60.

The 103,000 people over 60 are distributed fairly evenly over the District's nine service areas with one striking exception. In the area west of Rock Creek Park, 26,411 are concentrated and 99 percent of them are white, according to David Brooks of the District's office for the aged.

Exact income figures are unavailable, but Brooks and other experts see thousands of aged whites caught between low limited incomes and rising prices with an abundance of hardship and psychological suffering.

The sisters are luckier than most because their apartment, though taking half their income, is a bargain by current standards. "One of the most dramatic problems," according to Mrs. Brittain, the social work "is the inability to pay rent. Old apartment buildings are being turned into condominiums, the residential hotels are being torn down right and left and the problem of finding these people somewhere to live is very, very serious."

Brooks goes further. The waiting time for a subsidized apartment in National Capital Housing Authority projects is 2- to 4-years, with no emergency capability at all: "There is no housing available for the elderly," Brooks said flatly. As viewed by the sisters, their situation could scarcely be worse. Social Security is due to go up by 11 percent between now and July, but they expect a rent rise to more than take care of that. Whatever the increase is, they will have to pay it. The costs of moving, deposits, a month in advance are way beyond them, they say.

The experts do not agree on whether whites or blacks suffer most. Being black and old "is a double jeopardy," Mrs. Brittain belives. It makes for many more problems. They were usually in lower paid jobs so they rarely have as much income as whites and their health needs are more severe. The effects of discriminatory education and health care are really exaggerated as they grow older. On the basis that elderly blacks generally are paying lower rents and therefore have more money than aged whites, George Robey contends they may be better off. Besides, "people on the lower end of the scale manage better than those who are used to something better."

"The ones who seem to suffer the most are those numerous people-mostly women, who worked in government or business for years and years and retired with what seemed a good income. The little place on Massachusetts or Connecticut Avenue which might have cost them $60 in 1948 is $160 or $170 now. Everything else has gone up and they're still trying to hold on."

Holding on is what Mrs. Smith or Mrs. Sager have become very proficient at. With a ticking clock, paper flowers, fading photographs and a daguerro print of their father-a handsome man with stiff white collar and walrus moustachethe sisters pass their time in genteel poverty.

Just before Christmas the nephew Mrs. Sager brought up as her son died at 45. The funeral was in Richmond. They could not afford bus fare.

"Being, too proud to borrow from somebody," Mrs. Sager related, "we didn't go"

"Well you can't borrow if you can't pay it back," her sister interrupted. "Well, I'll tell you. It's a hard thing."

Of the two sisters Mrs. Smith is commanding, determined to exercise her responsibilities to the last. Her sister wants to make a trip to Richmond-"my mother and brother and everyone is buried there. She wants to go home so bad it's pathetic and by hook or crook I'm going to see she does it."

The inability to meet familial standards of respectability is a source of understated shame to the sisters. Mrs. Smith calls her derelict shoes "perfectly awful, embarrassing" and says she ceased going to church when she could no longer dress properly for the Methodist pews.

In the view of another social worker, Lillian Teitelbaum, indignities await those aged who seek help from District and federal agencies: “Sometimes they are treated miserably. Wherever they go there are roadblocks and if they are uneducated they passively retire."

David Brooks, supervisor of information for the District's services to the aged, agrees there is a problem. "When they reach me, most old people are very, very frustrated. They've been calling and not finding any agency which can help them."

The aged service is limited in function-it finances certain programs undertaken by voluntary organizations and makes referrals to other agencies. "Sometimes our agency can't help," says Brooks. "Either we don't have the clout or there is simply no mechanism."

The plight of the two sisters and unknown thousands of their 60-plus peers leaves social workers angrily helpless.

"In this day and age $300 a month for two people is obviously inadequate. They and others are being deprived of essential living needs."-Mrs. Teitelbaum. "I see them as having come to the ends of their lives and having to struggle. It's damn hard when you come this far and life doesn't offer any opportunity for enjoyment."-Mrs. Brittain.

With her ailing sister in the other room, the obvious question could be asked of Mrs. Smith. She stood still and delivered a bravely honest answer: "We've talked about it a lot. I just don't know what would happen to the one who was left."


[From the Washington Post, Mar. 10, 1974]



(By Rashi Fein 1)

President Nixon has sent Congress his blueprint for a national health insurance program that, if written into law, would represent a significant improvement in meeting the medical bills of many Americans. But that says more about the size of the problem than about the wisdom of the proposed solution. For the administration's system would be one of complexity, confusion, inefficiency and inequity.

Under the administration's plan, millions of Americans would remain without protection. And even for those covered, medical care would continue to be rationed on the basis of income.

This is so because of a series of policy decisions made for ideological reasons. Faced with public concern over rapidly rising health costs, the President chose to stress voluntary enrollment, largely private financing (with funds flowing from employers and employees to private insurance companies), a minimal impact on the federal budget, and supervision by state rather than federal officials.

The administration's plan has three major components:

First, under the Employee Health Insurance Plan, employers would be required to offer their employees a health insurance plan with a federally defined

The writer is professor of the economics of medicine at the Harvard Medical School and a faculty member at the Kennedy School of Government.

set of covered services (the basic plan), coinsurance, deductibles and maximum liability provisions. If the employee elects to be covered, 75 per cent of the premium costs would be paid by the employer.

Second, under the Assisted Health Insurance Plan, states would contract with carriers to offer the basic plan of covered services to persons who are not working, who fall below defined income levels, or who are high medical risks (for instance, the disabled now covered by Medicare). Individual premium payments, out-of-pocket expenditures for medical care and annual maximum liability would vary with income. Program costs would be met by contributions from employers (where applicable), those insured, and state and federal funds. This plan would replace most of the exisitng Medicaid program.

Third, the Federal Health Care Benefits program would replace Medicare. The services covered would be identical to those provided in the basic employee plan. Premiums, out-of-pocket costs and maximum liability, again, would vary with income.

Americans would sort themselves (or be sorted) into one of the three programs and move between them as their socio-economic and demographic characteristics changed. In recognition of "voluntarism," each of the plans would provide "the opportunity . . . to obtain coverage" rather than the coverage itself. In recognition of "pluralism," each of us might face a different insurer as we changed employers or moved from one state to another.


First, consider the Employee Health Insurance Plan. This part of the program would require that employers offer those employees who qualify, based on hours and weeks of work, a defined health insurance plan, and that, usually beginning about two months after the onset of employment, the employer contributing 75 per cent (65 per cent in the first three years of the program) of the premium expense for the covered employees. The employee would pay the rest. The administration estimates that the benefit package defined in the plan would require a total premium of approximately $600 for a family and $240 for an individual. Recognizing that the $450 employer contribution to the premium might significantly increase payroll expenses, the plan provides for a federal subsidy (declining over a five-year period) to employers for a portion of the premium costs in excess of 3 per cent of total cash wages.

What might all this mean to the employer, to the employee, to the labor market? Some general answers are clear. Small, marginal and low-wage employers would find that, if the employee has a family and elects to be covered, the mandated premium expense would lead to a significant increase in costs. Even with the maximum subsidy, an employer whose employees elected coverage for themselves and their families and who had average annual wages $7,500 would find the wage bill increased by over 3.5 per cent in the first year. By the sixth year, with the decline in federal assistance and the increase in employer's contribution rate, premium costs would add a full 6 per cent to payroll expenses. While these percentages are reduced if the average annual wage is higher, there surely can be little doubt what kinds of workers employers would prefer: employees who elect to do without coverage, ineligible part-time rather than full-time workers, single individuals rather than heads of families, and temporary rather than permanent help.

Whether any of these factors would have a significant impact on, say the Ford Motor Co.'s hiring policy is not the point. The program the President offers is not really addressed to UAW members (whose coverage, in a number of respects, is already better) but to employees not now protected by an adequate health insurance program-people who are now and, in many cases would remain, in difficulty. It would make it more difficult for low-income heads of families to obtain regular, full-time employment.

Of course, it can be argued-and with considerable merit-that the impacts on employees are in part illusory; that premium would be shifted from employer to employee through the wage determination process (and to the consumer through inflation). But if that be the argument, we can question whether premiums of $600 permit us to say, as the President does. that the program "will cost no American more than he can afford to pay." This is surely not the case for those with low income.

Regrettably, too, the program has regressive characteristics: A premium that is a fixed dollar amount is a higher percentage of low incomes than of high.

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