APPENDIX II

Ribicoff, Secretary of H.E.W., testifying before the House Ways and Means Committee in 1961 on H.R. 4222, the King Bill providing for health insurance benefits in hospitals and other facilities.

HEALTH SERVICES FOR THE AGED UNDER THE SOCIAL SECURITY INSURANCE SYSTEM

ADVANTAGES OF SOCIAL INSURANCE APPROACH

"We have, then, in the social insurance approach these advantages: It is the only way in which people generally can pay during their working years toward meeting their health costs in retirement; it is sound and fiscally responsible; it makes possible provision of basic protection for the aged regardless of where they live; it preserves and increases freedom of choice of doctor and hospital; and it does all this in a way that is consistent with the dignity of the individual." Page 32.

"The cost of the President's proposal: When the administration bill was introduced in February, it provided for full financing of the estimated long-range cost of the program-0.60 percent of taxable payroll . . .” Page 32

"Since the introduction of the bill, the chief actuary of the Social Security Administration, in accordance with his usual procedure, has reevaluated the cost estimates. The estimate of the cost of the hospital services has been fully confirmed in this reevaluation. There is a great deal of information of hospital use under insurance programs, and our assumptions on use of hospitals under the President's proposal seem very safe." Page 32.

"Based on the new assumptions on use of services, the long-range cost of the program is now estimated by the chief actuary at 0.66 percent of payroll rather than 0.60 percent. In accordance with the long-established practice of fully covering the cost of and new benefits that are added to the program, I am recommending that the financing provisions of the proposal be changed so as to keep the program on a sound financial basis." Page 32

“... Although our most recent estimates indicate that, even with the previously recommended financing provisions, the income earmarked for health insurance benefits would have exceeded the outgo in every year until after 1980, we believe the prudent and advisable course is to make provisions now for the additional income that would be required over the very long run." Page 33 "... President Kennedy proposes a fiscally responsible method of financing hospital care and certain related health services for the aged in a way that protects the dignity of the individual . . . it would pay hospital bills without interfering with hospital operations." Page 33

". . . The only satisfactory way of providing the aged with adequate health insurance protection is through a system under which the cost of the health insurance will be paid by people during their working years, together with their employers." Page 37

"Under this bill... the doctors are specifically excluded from this bill." Page 181

This is not true, doctors are specifically included. See Ribicoff's own testimony on Pages 35 and 36 in which he says:

"Physicians' services would not be covered except for services in the fields of pathology, radiology, physical medicine, anesthesiology, and services rendered by interns and residents in training, and those services would be covered only when they are provided as part of the hospital's services. Hospitals enter into various kinds of arrangements with doctors specializing in pathology, radiology, physical medicine, and anesthesiology. Some hospitals employ these specialists as salaried staff members; others arrange for these services by contracting with individuals or partnerships. In order to provide payments for these services for beneficiaries wherever provided by the hospitals, the administration proposal would provide payments to a hospital for the services in question whether the specialist is on salary or provides services for the hospital under some other kind of arrangement. Service provided by the patient's private doctor would not be covered, nor would services furnished by mental, tuberculosis, and, in general, Federal hospitals."

"There is absolutely nothing in this bill that is socialization." Page 181.

"This bill has the saving grace and I am very serious when I say thisthat it is conservative. This bill is the most conservative approach, because under this bill, the beneficaries make the contributions, with their employers, to

pay for the benefits. They are paying for what they are getting, instead of having the general treasury of the State and the Nation under an open-end proposition make the payment." Page 182.

Mr. Byrnes to Mr. Ribicoff. "Mr. Secretary . . . I enjoyed your lecture on politics and what happens when something is controlled, basically, by the State legislature, when State legislatures are involved. I understand that it is your philosophy that in such cases it immediately goes to pot, but if it is at the Federal level, we can have great confidence that it is going to be administered soundly." Page 188

Ribicoff admits ". I believe it is true that very few, if any, who are absolutely in need or urgent care are turned away from our hospitals because of inability to pay." Page 29

66

"We know that hospital use by older people goes up when an assumed source of financing is provided on terms that older people find acceptable." Page 29 .. The Government is already involved in meeting the cost of personal medical care, for the aged as well as for other groups, and on a large scale." Page 29

"Moreover, the social insurance approach affords the best assurance of keeping program costs under control. . . ." Page 31

Mr. Byrnes. " . . . . I just hope that we are not going to be misled and that your facts and figures are more accurate than the case that was presented during the campaign by then Senator Kennedy. I remember a television show where Mr. McNamara, I believe his name is, down in Kentucky was pictured with the candidate for the Presidency and attention was called to his very difficult plight as a result of a broken hip, but no attention was called to the fact, of course, that over four-fifths of the cost had already been paid by Blue Cross and Blue Shield, even though the information that was developed later was that Mr. McNamara had told Senator Kennedy that he was covered by Blue Cross and Blue Shield, but it was suggested by Senator Kennedy that they better not go into that matter in the film. If we are talking about misleading and properly educating the public, I do not think we got off-to a very good start. At least, the administration did not in that particular instance." Page 189

Secretary Ribicoff: "I would say that there is absolutely no way in which this interferes with the doctor-patient relationsip." Page 190

Secretary Ribicoff. "I think there is no nation that has health service comparainterferes with the doctor-patient relationship." Page 193

Secretary Ribicoff. ". . . But I would like to make this clear for the record, that if and when Congress passes the plan for meeting health care costs for the aged under social security, I would not advocate the repeal of Kerr-Mills. The Kerr-Mills approach is a valuable instrument to supplement the social security approach. There could be cases where catastrophic illness would go far beyond the benefits that we advocate in the King bill. And I foresee the "necessity of an instrument like the Kerr-Mills plan coming in and taking up the difference. I would say that the Kerr-Mills plan has a place in our overall health." Page 195 Mr. Curtis. "The point I want to drive home is that I do not believe the KerrMills bill ever was written as a base for health care for the aged or any group in our society. As a mater of fact, my approach is that the basic program, health program, in our society is in the private sector. And that is what really disturbs me about the approach of your Department, coming in here, in my judgment, not having analyzed what our present health care program is in detail, so that you know where its strengths and weakneses are, but coming in and in effect substituting a basic plan in law, which I think is the social security approach for all people, and on a compulsory basis. There is no choice in the proposal which you present here, is there?" Page 195

Secretary Ribicoff. “No, there is not. My predecessor, Secretary Flemming, presented a study of the problem to this committee, even though his conclusions were different from mine, I also gave you a report today. The documents supplementing my testimony are a complete analysis of the problem." Page 196