An American Health Planning Association (AHPA) survey

of hospital bed expansion projects (1980), projects a minimum of 3,000 additional beds per year and a maximum of 16,000 beds per year will be added to present hospital capacity if health planning is eliminated. In beds alone, this will cost the federal government $127 million a year (based on an intermediate estimate, assuming a 74 percent occupancy rate), a majority of which would come out of the Medicare trust fund. Total federal costs could go as high as $256 million per year. Again, this is for additional hospital beds only. It does

not include estimates for additional renovation, replacements, equipment, nursing homes and other elements of the certificateof-need process. When these additional elements are included,

the cost to the Medicare program, the U.S. Treasury, and the public will obviously be even greater.

The Association urges the Congress to maintain a viable local health planning presence and capability that will help reduce Medicare outlays in FY 1984 and beyond.

V. CONCLUSION

For the most part, the Administration's proposals to cut federal health care programs only further serve to exacerbate the elderly's out-of-pocket costs for health care, without controlling spiralling health care inflation in the future. The Administration; s proposals to substantially cut Medicare benefits through increased cost-sharing requirements are not justified particularly in light of prior year cuts and social security reductions slated for this

year.

We urge the Congress to look beyond Medicare and/or Medicaid specific approaches, but rather to across-the-board remedies. We urge the Congress to resist the temptation to simply continue the year by year hacking away at Medicare and Medicaid and instead focus on measures to restrain the inflation in the health

sector. The poor and the elderly should not be placed at a competitive disadvantage in accessing and paying for health

care services.

EFFORTS TO REDUCE MEDICARE BENEFITS RESISTED:

The interest of the Administration in cutting Medicare coverage was again demonstrated at the December 1982 and January 1983 meetings of the Advisory Council on Social Security. This Council has been asked to focus its studies and recommendations on what needs to be done in Medicare.

At the December meeting, Chairperson Dr. Otis Bowen listed four issues the Advisory Council needed to consider: 1) Should access to Medicare be automatic for those entitled to Social Security? 2) Should access to Medicare be limited to the financially needy? 3) Should access to Medicare be limited to those with conditions for whose treatment there are no other resources available? 4) Should Medicare be the primary payor?

Questions of improving protection for elderly and disabled recipients were not presented for consideration, nor was the Council asked by officials of this public body to look at ways of reducing economic barriers to health services.

The Council's January meeting focused on the Administration's new hospital prospective payment proposal Medicare. A representative from Health and Human Services (HHS) described this plan, submitted to Congress in December, under which rates would be set by diagnosis-related groups (DRGs). Questions were raised about inherent incentives for hospitals to increase numbers of admissions, HHS's plans to monitor the delivery of services, the likelihood that the system would lend itself to rate manipulation, and hence cost increases, possible harmful effects on health maintenance organizations, and the inability of the system adequately to compensate public hospitals.

PUBLIC HEARINGS: Public hearings were held in conjunction with each of the two Council sessions. At the December hearings, representatives of groups of the aged, the disabled, labor, health, and religious organizations, pointed out the consequences for the beneficiaries of further proposed cuts. With 25% of Medicare beneficiaries classified as poor or near-poor, and the average beneficiary spending 20% of income on health costs that Medicare does not cover, these groups opposed increased copayments, increased deductibles, and vouchers.

Mel Glasser of the Health Security Action Council (HSAC) doubted the reasonableness of making a beneficiary with a $5000 income, $1000 of which he already pays for health care. Cost-concious through increased cost-sharing. Bert Seidman of AFL-CIO in commenting on the Administration proposal to institute a 10% co-payment for the 2nd to 66th hospital day, estimated the average 10-day stay would cost the patient $600 minimum, or 2 months of an average widow's benefits. James Hacking of AARP questioned whether the health services foregone because of cost-sharing requirements would be excessive, unnecessary care, or needed preventive or early treatment services,

Several groups cited their opposition to limiting Medicare to only the financially needy. Hacking opposed any means test as a flagrant breach of contract. Henry Nicholas of the National Union of Hospital and Health Care Employees also strenously opposed any change in the social contract between the government and its citizens. Father Harvey of Catholic Charities pointed out that means-tested programs have been far more severely cut than social insurance programs.

Speaker after speaker cited the' inadequacy of present benefits and their concentration on expensive institutional care rather than on care for the predominant problems associated with chronicity and aging. Numerous witnesses called for coverage of drugs, eyeglasses, dental care and long term care.

Jacob Clayman, testifying for the Leadership Council of Aging Organizations, called for health-system-wide cost controls (public and private) as did Seidman of AFL-CIO and Glasser of HSAC. Medicare-specific cost containment, said Hacking of AARP, will not contain costs over the long run. Several groups called for system-wide prospective reimbursement, with assurances of accessibility and quality.

At the January hearings, testimony by groups of insurors, providers, and others demonstrated the conflict and uncertainty about what needed to be done. The Health Insurance Association of America (HIAA) affirmed support of the extension of a hospital prospective payment plan to all payors, public and private (although not necessarily the DRG plan). The "Blues" stated their opposition to such extensions too regulatory. The Group Health Association of America (HMOs) reported the problems and increased costs they have experienced with the New Jersey DRG system.

Trustees of voluntary hospitals recommended increasing co-payments for people with gross incomes over $40,000. There was general discussion of means-testing, and the HHS staff was asked to look at alternative ways of means-testing for Medicare. NEXT PUBLIC HEARINGS: San Francisco 2/24/83, Chicago 3/9/83. For information, contact the Council at 200 Independence Ave., S.W., Washington, D.C. 20201 (202-7558670).

MEDICARE VOUCHERS AGAIN: Rejected by the Congress in December 1982, the Administration's plan to allow Medicare beneficiaries to opt out of Medicare and receive credits to buy a prepaid insurance plan, H.M.O., of preferred provider program has surfaced again. This is of grave concern because of its potentially adverse effect on beneficiaries and on the long term soundness of the basic Medicare structure.uage

A brochure, written for laymen, discussing Medicare vouchers, is available from the Health Security Action Council. 1-5 copies, no charge; 6-100 copies, 15¢ each; 100 or more, $14 per 100; 1000 or more, $130 per 1000.

HEALTH INSURANCE FOR THE UNEMPLOYED: Health Security Action Council Chairman Douglas Fraser called on Congress to provide health insurance for unemployed workers and their families. Testifying January 24th before the Energy and Commerce Committee of the House, Fraser, speaking also for the UAW and the AFL-CIO, estimated 25-30 million people lost health protection in 1982. With predictions of slow economic recovery and up to 5 more years of high unemployment rates, Fraser said: "This tragic. by-product of unemployment may .... cost the nation as much in damaged and lost lives as the unemployment itself".

Describing the impact of joblessness on the health of the unemployed and their families, Fraser said: "This intolerable situation would not have existed if Congress had enacted a universal, comprehensive national health insurance program we have however, a massive serious problem that calls for immediate attention". Fraser suggested possible approaches to needed protection: 1) Require private insurance to provide longer continuation after lay-off, and shorter delays before coverage at new job entry; 2) Liberalize Medicaid eligibility to provide for the unemployed; 3) Publicly finance continuation of the worker's company health plan for at least a year after lay-off; 4) provide an essential minimum package beginning when unemployment benefits start, and continuing for a year, or until new employer-provided benefits take effect.

Fraser's testimony was given added import by the release of a Food Research and Action Center study which reported that a century long decline in infant mortality rates had been reversed from 1980 to 1981 in eight states and several major urban centers. At least one state Health Director attributes increases in infant deaths in part to unemployment and decreased access to health services.

NEW JERSEY HEALTH SECURITY ACTION COUNCIL Chairman Milton Wilkotz spearheaded a letter-writing campaign to the New Jersey Congressional delegation to bring to their attention the urgency with which their constituents view the need for health insurance for the unemployed. They have also worked on the news media, with letters, news articles, and radio coverage. The New Jersey Council found it useful to have the staff of members of Congress in their congressional district join them in visits to the nearest unemployment offices, where the jobless have been able to help them understand what it really means for them and their families to be without health insurance. Said Wilkotz: "With the Administration's lack of concern.... the time has come when our elected officials must prove they deserve our votes by their votes in Congress",

PRICES, COSTS AND PREMIUMS: As the controversy about how to contain runaway health care costs escalates, the figures and the terms continue to confuse the issue. In late January the N.Y. Times reported "Health Care Costs up 11%, nearly triple overall rises". (Consumer Price Index for 1982 rose 3.9%). But it wasn't costs, it was prices that rose 11%. Costs are numbers of services times prices. The 1982 figures for costs are probably higher than an 11% increase, and are not out yet.

Of particular interest is the Bureau of Labor Statistics report that private health insurance premiums rose 15.9% in 1982 - more rapidly than the increases in hospital room rates or physicians fees. Health Insurance Association spokesmen attributed the premium increases to larger numbers of medical services used, and cost shifting from Federal payors. As Federal payments are increasingly limited, providers are inclined

to make up the difference by increasing charges to private insurance payors. ТАХ САР HEALTH INSURANCE: Rejected in 1982, the so-called "tax cap" "on health insurance premiums is again being proposed by the President. Above a certain ceiling, probably $2100 per year for a family plan, and $840 for a single plan, the amount an employer pays for worker health insurance would be added to the worker's taxable income. Group plans with good coverage cost more than this. Cost-shifting from public to private sector insurance is contributing further to runaway increases in private insurance premiums. Family coverage under the UAW-General Motors Michigan plan, for example, costs $3624 a year. The proposed tax cap would cost the average worker with such coverage several hundred dollars a year in added taxes.